It supports more complicated subtitles and menuing, more codec support (like a LOT more) lossless support, mode audio formats.

It’s like they took MP4 and added in all the stuff that you needed to replicate a BluRay, then added in lossless audio.

If you just want a movie with basic subtitles and audio, MP4 is fine. If you want to replicate newer stuff, MKV supports it.

The real hot part of this is if you have a collection of high-quality video/audio and you’re streaming it to firefox, you’ll natively be able to do so without transcoding.