It's safe to say that Microsoft's recent announcement regarding (the lack of) native DVD playback in Windows 8 upset a lot of people. At the very least, it had many of us evangelizing VLC media player as our go-to solution for video playback. Microsoft's decision was all down to licensing fees, so how can VideoLAN give away its "play anything" software for free? According to ZDNet's Ed Bott, as VideoLAN is based in France, which doesn't recognize software as patentable, it's not required to pay for the license. VLC uses custom codecs and libraries to enable playback, and while its legality may be questionable, the fact VideoLAN is a non-profit organization makes it an unlikely target for litigation. You can read a full and detailed explanation of how VLC circumvents the legal issues surrounding DVD playback at the source link below.
DVD playback: how VLC does what Windows 8 can't
DVD playback: how VLC does what Windows 8 can't/
ZDNet's Ed Bott explains how VideoLAN can give away DVD playback software, while Microsoft is forced to pay licensing fees.