You know, I didn’t even think about that. I’ve got licenses for all my old Pi’s from back when they were used as XBMC boxes. I’ll have to dig thru some old emails and pull the keys and see if it makes a difference.
For what it’s worth, I did not have to purchase an mpeg license to get good performance. I didn’t even know such a process existed.
I think your first two suspicions are sound. It’s the speed of the SD card or the Speed of the Model 1 hardware, I’d bet.
Do you know if your SD card is class 10 or 6 or less?
I wonder what you’d see if you replaced that m2v with a heavily downsampled version of the same video.