README: Convert to markdown, clarify licensing

Part-of: <https://gitlab.freedesktop.org/gstreamer/gst-libav/-/merge_requests/68>

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-gst-ffmpeg
-
-This module contains a GStreamer plugin for FFmpeg.
-
-PLUG-IN DEPENDENCIES AND LICENSES
----------------------------------
-
-GStreamer is developed under the terms of the LGPL (see LICENSE file for
-details). Some of our plug-ins however rely on libraries which are available
-under other licenses. This means that if you are distributing an application
-which has a non-GPL compatible license (for instance a closed-source
-application) with GStreamer, you have to make sure not to distribute GPL-linked
-plug-ins.
-
-When using GPL-linked plug-ins, GStreamer is for all practical reasons
-under the GPL itself.

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+# gst-libav
+
+This module contains a GStreamer plugin for using the encoders, decoders,
+muxers, and demuxers provided by FFmpeg. It is called gst-libav for historical
+reasons.
+
+# Plugin Dependencies and Licenses
+
+GStreamer is developed under the terms of the LGPL-2.1 (see COPYING file for
+details), and that includes the code in this repository.
+
+However, this repository depends on FFmpeg, which can be built in the following
+modes using various `./configure` switches: LGPL-2.1, LGPL-3, GPL, or non-free.
+
+This can mean, for example, that if you are distributing an application which
+has a non-GPL compatible license (like a closed-source application) with
+GStreamer, you have to make sure not to build FFmpeg with GPL code enabled.
+
+Overall, when using plugins that link to GPL libraries, GStreamer is for all
+practical reasons under the GPL itself.
+
+The above recommendations are not legal advice, and you are responsible for
+ensuring that you meet your licensing obligations.