Steve Jobs recently made strong comments about Adobe's Flash application framework, stating that the future is the upcoming next generation HTML specification HTML5. Let there be no doubt, at Premonvision we are firm supporters of open standards and industry standards. Without open standards the web as we know it today would not exist, and a range of disruptive services and business models would never seen the day light.
However, it is not often that Apple makes these types of comments, and it is rather unique to have one of the most proprietary and closed successful consumer technology companies praising open standards such as HTML5 while at the same time going after the technology that powers allegedly 75% of video content on the Internet. It may be a surprise that a company that invests significant resources in ensuring that the walled gardens around its products, applications and services remain intact champions open standards so publicly. After all, Mac OS can only be installed on hardware purchased from Apple and Apple restricts Itunes to only work with Apple products and Itunes store to mention a few examples.
However, Flash is one of the most viable competitors to Apple's digital content and applications eco-systems. Application developers that develop Flash applications (and therefore might also have purchased Adobe's Creative Suite) create value for the Flash eco-system, and Apple wants these developers to support HTML solutions instead. By using HTML Apple can sway developers to develop apps for Apple products instead of developing Flash applications (that can run on a much wider range of devices). So, on one hand this is about developers.
On the other hand this is also about shifting the competition towards areas where Apple is strong. If the web tomorrow replaced Flash with HTML technologies the winners in the market are those that can integrate HTML5 services with account management, transaction systems and device SDK; all of which are key strengths of Apple. With Flash's strong position today it is much more difficult for Apple to dominate the Internet video market when video providers such as Google/Youtube, BBC Iplayer, Reuters, and Hulu use Flash. It is not without reason that web video providers choose Flash. Flash is relatively easy to deploy, it can run on a very wide range of devices, and provides manageability and security.
Let's bring the focus over to HTML5. HTML5 is developed by the W3C, where Apple, Google, Mozilla and Opera Software, play crucial roles in the specification development. An important aspect driving the development of HTML5 is the inclusion media rich applications. The developers have therefore had to discuss standards for audio and video. On one hand Mozilla and Opera Software have supported the open standards Ogg for audio and video, which Apple and Google have opposed due to lack of efficiency in the Ogg codecs and also in fear that there might be hidden patents to the otherwise patent free Ogg specifications. Instead, Apple and Google promote patented H.264 (which there may also be hidden patent holders to). Including patented and licensed technologies in the HTML specifications runs somewhat contrary to the open web. If Apple (and Google) wants HTML5 to rule the web perhaps they should help improve Ogg and donate any Ogg-related patents to e.g. the Open Innovation Network (OIN), as parts of OIN's patent protection scheme?
Let there be no doubt; Adobe's de-facto standards position for web video delivery is under pressure from HTML5, and would be even more so if open standards-based A/V codecs were included. The web favors open standards, not only because they are free but also because interoperability is easier to achieve. In perhaps a recognition of this, Adobe in 2008 initiated the 'Open Screens' project to lower licensing costs and to make Flash players more readily available. To maintain its position Adobe may need to open source Flash and work closely with video providers to ensure that their needs are met.
The future of web video delivery could change with introduction of HTML5 or by Adobe opening up Flash, however, as this Industry Comment highlights there is a lot more to Mr. Jobs' remarks than what meets the eye.
