It's The Old Open Technology Trick, Chief
The Open Screen Project is supported by technology leaders, including Adobe, ARM, Chunghwa Telecom, Cisco, Intel, LG Electronics Inc., Marvell, Motorola, Nokia, NTT DoCoMo, Qualcomm, Samsung Electronics Co., Sony Ericsson, Toshiba and Verizon Wireless, and leading content providers, including BBC, MTV Networks, and NBC Universal, who want to deliver rich Web and video experiences, live and on-demand across a variety of devices.
So, a bunch of the Usual Suspects have decided to partner up with Adobe in an attempt to (depending on how you look at it) keep Flash/SWF/FLV dominant in the web video market or help make Flash/SWF/FLV relevant again in the web video market.
We're Number One!
If you look at what format most of the video on the web is in, it's WMV (or ASX or AVI or whatever -- Microsoft's video container format du jour). This is because most of the folks online use Windows and have no clue how to encode it so that other people can watch it conveniently.
If you look at the video format that most people on the web watch, it's FLV (Adobe's video container format, which is Flash's video container format). FLV is used for YouTube, Hulu, and abc.com. It's very popular because, frankly, Flash provides the best options for providing custom web players and is solidly cross-platform (if it plays on a Mac it plays on Windows and vice versa).
If you look at the video format people actually pay to watch, it's QuickTime (i.e. MOV, Apple's video container format). Aside from that fact that Apple is selling a buttload of QuickTime, while other folks are merely giving away stuff, there's a nice little twist in this.
QuickTime is not only the oldest digital video container format, it's also by far the most flexible, general-purpose, and well-engineered. Unlike the others it was designed from day one as capture, edit, and delivery format, and to handle arbitrary numbers and kinds of media tracks. A QuickTime MOV can contain multiple video tracks (e.g. for different bandwidths or resolutions), audio tracks (e.g. languages, directors' commentaries), text tracks (e.g. subtitles or index markup), interactive tracks (e.g. custom interfaces), and -- well -- anything else you can think of. And it's been this way since day one.
Recognizing this, after developing two complete generations of delivery-only video formats (MPEG, and MPEG2/3) that weren't flexible and didn't even include proper time-synchronization, the Motion Picture Expert Group went to Apple and asked to license QuickTime. The MPEG4 video container is, in fact, QuickTime. So H264 videos (which constitute a large number of WMV and FLV videos) are in fact QuickTime videos in disguise. Another consequence of this is that the QuickTime container format is, effectively, open and has been since Apple essentially handed it over to the MPEG folks.
Now, what does this announcement by Adobe mean? Well, the Usual Suspects are essentially a bunch of companies who'll sign onto any bandwagon that sells more hardware and chews more bandwidth (Cisco, Intel), technical incompetents (such as the BBC, who, despite being a public broadcaster, have managed to pick one non-cross-platform proprietary content delivery technology after another, and had to be dragged kicking and screaming to make their iPlayer work on Macs or in FireFox) and the "we hate Apple" club (NBC Universal who will cheerfully burn millions of dollars to spite iTunes). So we can guess what their motives are.
Thanks Goodness It's "Open"
First of all, you need to realize that FLV was the only "closed" container format. You can already write custom codecs for QuickTime and Windows Media, and their container formats are already public. This is why QuickTime can play WMVs compressed with supported codecs and vice versa. This is also why you can't open up an FLV in QuickTime, even if it's compressed with a codec QuickTime supports. So Adobe is actually playing catchup here.
As for the "benefits" to the consumer of FLV being open... Well, when Apple controlled QuickTime every QuickTime video would play on any machine with QuickTime installed. But lots of MPEG4 videos won't play in QuickTime (despite being, essentially, MOVs) because the open nature of MPEG4 allows folks to write their own codecs. (QuickTime already allows for third-party codecs, but most QuickTime developers seem to write cross-platform codecs.) So, in essence, Adobe is opening up FLV to be just as lousy an end-user experience as every other more open format (QuickTime and WMV have been "open" in the sense that FLV is being opened since day one).
Of course, FLV is already a lousy end-user experience for anyone not using a computer. Flash on the Wii won't play many (perhaps most) FLVs because one of the first things to go when Adobe/Macromedia streamlines Flash is codec support. (The same is true for QuickTime on the iPhone.)
So, in the end, what does the announcement mean? Well, I guess Adobe would prefer manufacturers to settle on their newly "open" FLV container instead of the already open MPEG4/QuickTime container, or the already pretty much open WMV container. Big surprise. A bunch of manufacturers have signed on, but whether they'll ship Flash-only devices or Flash-too devices isn't clear. If you put H264 hardware in your device, will you deliberately spite H264 that isn't wrapped in an FLV container? I doubt it: not even Adobe does that (you can pass QuickTime movies with H264 encoding to SWFs as if they were FLVs and they just work).
Of course, if Adobe is actually going to publish the FLV format, Apple and Microsoft can start transparently playing FLVs with supported codecs, eliminating the need for Flash to play back H264 FLVs. It also makes implementation of <video>foo.flv</video> in HTML5 easier (again, without necessarily requiring Flash). So, on the whole, I don't see how this is much of a win for Adobe or the general public in the short term, and it seems like it will probably hurt Adobe in the long term.