> There are clear non-royalty based incentives for large companies to develop new compression algorithms and drive the industry forward. Both Google and Facebook have active data compression teams, lead by some of the world's top experts in the field.
Google and Facebook can afford to spend money on R&D because they throw off gobs of money from near-monopolies in important economic sectors. This is one of the archetypal models for R&D, and has a lot of precedent: AT&T Bell Labs (bankrolled by AT&T's telephone monopoly) and Xerox PARC (bankrolled by the copier monopoly built on Xerox's patents). Much of the really fundamental technologies underlying computing were developed this way.
But MPEG is thirty years old now, and the MPEG-1 standard is 25 years old. Until recently, the MPEG standard has been pushed forward not by a single giant corporation that can afford to bankroll everything, but a consortium of companies using patents and licensing to recover their investment into the R&D. This is one of the other archetypal models for R&D. Many of the other fundamental technologies underlying computing were developed this way.
(The third archetypal model is the government-funded project, e.g. TCP/IP, which is also an example of a monopoly bankrolling R&D.)
The "benevolent monopoly" model obviously has advantages for open source--because the company bankrolls R&D by monetizing something else, it can afford to release the results of the research for everyone to use. But it's not sustainable without the sponsor (and we know this, because open source has been around for a long time, and there is little precedent for a high-performance video codec designed by an independent group of open source developers).[1]
I see people demonizing MPEG and espousing reliance on Google and FB as the way forward, but it's not clear to me that everyone fully understands the implications of that approach.
[1] Query whether Theora counts--it was based on an originally proprietary, patented codec.