I first met the original group of VLC developers at the Solutions GNU/Linux conference in 2001. I had been an employee of FSF for about a year at the time, and I recall they were excited to tell the FSF about the project, and very proud that they'd used FSF's premier and preferred license (at the time): GPLv2-or-later.
What a difference a decade makes. I'm admittedly sad that VLC has (mostly) finished its process of relicensing some of its code under LGPLv2.1-or-later. While I have occasionally supported relicensing from GPL to LGPL, every situation is different and I think it should be analyzed carefully. In this case, I don't support VideoLan's decision to relicense the libVLC code.
The main reason to use the LGPL, as RMS put eloquently long ago, is for situations where there are many competitors and developers would face serious difficulty gaining adoption of a strong-copylefted solution. Another more recent reason that I've discovered to move to weaker licenses (and this was the case with Qt) is to normalize away some of the problems of proprietary relicensing. However, neither reason applies to libVLC.
VLC is the most popular media player for desktop computers. I know many proprietary operating system users who love VLC and it's the first application they download to a new computer. It is the standard for desktop video viewing, and does a wonderful job advocating the value of software freedom to people who live in a primarily proprietary software world.
Meanwhile, the VideoLan Organization's press statements have
been quite vague on
their reasons for changing, saying only that this change was
motivated to match the evolution of the video industry and to spread the
VLC engine as a multi-platform open-source multimedia engine and
library
. The only argument that I've seen discussed heavily in
public for relicensing is ostensibly to address the widely publicized
incompatibility of copyleft licensing with various App Store agreements.
Yet, those incompatibilities still exist with the LGPL
or, indeed, any true copyleft license. The incompatibilities of Apple's
terms are so strict that they make it absolutely impossible to comply
simultaneously with any copyleft and Apple's terms at the same time.
Other similar terms aren't much better, even with Google's Play Store
(— its terms are incompatible with any copyleft license if the
project has many copyright holders)0.
So, I'm left baffled: does the VLC community actually believes the LGPL would solve that problem? (To be clear, I haven't seen any official statement where the VideoLAN Organization claims that relicensing will solve that issue, but others speculate that it's the reason.) Regardless, I don't think it's a problem worth solving. The specters of “Application Store” terms and conditions are something to fight against wholly in an uncompromising way. The copyleft licensing incompatibilities with such terms are actually a signaling mechanism to show us that these stores are working against software freedom actively. I hope developers will reject deployment to these application stores entirely.
Therefore, I'm left wondering what VLC seeks to do here. Do they want proprietary application interfaces that use their core libraries? If so, I'm left wondering why: VLC is already so popular that they could pull adopters toward software freedom by using the strong copyleft of GPL on libVLC. It seems to me they're making a bad trade-off to get only marginally more popular by allowing some proprietary derivatives. OTOH, I guess I should cut my losses on this point and be glad they stuck with any copyleft at all and didn't go all the way to a permissive license.
Finally, I do think there's one valuable outcome shown by this relicensing effort (which Gerv pointed out first): it is possible to relicense a multi-copyright-held code based. It's a lot of work, but it can be done. It appears to me that VLC did a responsible and reasonable job on that part, even if I disagree strongly with the need for such a job here in the first place.
Update (2012-11-30): It's been pointed out to me that VLC has relegated certain code from VLC into a library called libVLC, and that's the code that's been relicensed. I've made today changes to the post above to clarify that issue.
0 If you want to hear more about my views and analysis of application store terms and conditions, please listen to the Application Stores Panel that I was on at FOSDEM 2012, which was broadcast on the audcast, Free as in Freedom.