Theora

Kate is an overlay codec, originally designed for karaoke and text, that can be multiplixed in Ogg.

ffmpeg2theora -o video-with-subtitles.ogg --subtitles subtitles.srt video-without-subtitles.avi

http://wiki.xiph.org/Kate#Text_movie_subtitles

в vlc есть поддержка субтиров в OGG
 * Ogg/Kate subtitles support

Конвертация Mp4 в теора ffmpeg2theora Glider\ aerobatics\ Georgij\ Kaminski.mp4 -v 10 -a 10