While Adobe’s tiff with Microsoft over Adobe’s Portable Document Format has gotten a lot of press lately, Dan Frommer at Forbes describes another format battle between the two:
Lip-synching teens on YouTube. Last night’s episode of Lost on ABC’s Web site. Cooking tips from Emeril. At long last, Web video is finally taking off. Last year, Internet users streamed 18 billion videos, and everyone from the broadcast networks to camcorder-wielding high school kids wants a piece of the pie. But one of the biggest winners could be Adobe Systems, whose newly acquired animation and site-design software, Flash, has become the hottest tool for Web video.
When Adobe Chief Executive Bruce Chizen picked up Flash developer Macromedia for $3.4 billion in stock last year, its latest version–Flash 8–was just launching. The update pledged much-higher-quality video than previous editions, thanks to a new movie-compression method from a small company called On2. What followed was a deluge of interest, pushing Flash ahead of video-streaming pioneers RealNetworks and QuickTime-developer Apple Computer.
“Probably six months after that new [compression technology] came out, adoption started going through the roof,” says Chris Hock, group product manager of Adobe’s media platform. Microsoft’s Windows Media format still dominated the market with a 60% share of all video streams last year. But Flash has quickly jumped into second place with a 19% market share, up from nothing two years ago, and will grow substantially this year, according to Accustream research director Paul Palumbo.
Much more by following the link, but there’s a key reason for Flash’s success:
Simplicity is another boon for Adobe. Unlike competing offerings from Microsoft and RealNetworks, industry observers say, Flash is just Flash–no pop-up windows, music stores or other confusion. And as content companies aim to eventually make money from Web movies–IDC estimates revenue from online video will jump to $1.7 billion in 2010 from $230 million last year–marketers’ and developers’ familiarity with Flash is also a plus for Adobe–it’s already the standard for interactive Web advertisements.
Adobe is making money off tools and premium content server licenses while content-delivery specialists like Akamai love that video bandwidth usage.