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The market is rather unhappy. E.g. Win10 doesn't ship an H265 codec because it's too expensive.

> Win10 doesn't ship an H265 codec

Very few Win10 users would want a CPU-targeted HEVC codec.

Intel, nVidia and AMD have that codec in their hardware. They are probably paying for a license to use these patents, they ship Win10 drivers for their hardware, and Microsoft publishes that drivers on Windows update.

At 99 cents for the add on, the decision to charge users smells more like a political decision than an economic one. The cost to Microsoft is undoubtedly far less than that. 99 cents is basically the bare minimum you can charge when you accept credit cards as a method of payment.

https://en.wikipedia.org/wiki/High_Efficiency_Video_Coding#P...

$0.20 for MPEG-LA, $0.40 for HEVC Advance, and "call us" for Technicolor and Velos Media. $0.99 doesn't sound far off.

That's 1% of the cost of windows, for a video codec when there's already dozens of free alternatives

There’s a fixed cap on the royalty rate, so even if we assume Microsoft paid for a license for each copy of Windows sold to customers, on a per-copy basis it would be much less than 1%.

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