I don't think that's out of line.

I was working on networked audio/video devices back in ~2005 when that space was pretty new. We had a line-item BOM cost for encoder/decoder licenses that was not chump-change, which got passed on to customers.

I can only imagine costs have gotten much worse since then. When you take into account all the electronics your average connected person owns: phone, tablet, TV, AppleTV/GoogleTV/Roku, computer OS, etc., it really starts to add up.

Even if the parent poster is overstating and it's on the order of $50 per person, that's a ton of wasted money when you consider the total cost.

MPEG-2 used to cost $2.50 per device. MPEG-4 is another 25 cents or so. Add another $2.00 for HVEC. MP3 was $0.75-$5.00 per unit. Each video you stream from Netflix or Hulu costs a few cents royalty. Royalties for such things used to be even higher before the threat of unpatented codecs dropped prices (eg, h.264 becoming free to compete with vp9).

Consider all the electronics you've owned over the past 20-25 years. You undoubtedly paid a dollar or two for less complex ones and much more for more complex devices.