Web Video in Flash 8
Web Design & Technology News, August 1, 2005

August 1, 2005

Macromedia plans to unveil its Flash 8 software early next month with an emphasis on video capabilities that some think could up-end the Web video market.
By Paul Festa

Macromedia plans to unveil its Flash 8 software early next month with an emphasis on video capabilities that some think could up-end the Web video market.

Macromedia is expected to announce the latest version of its signature Flash software August 8 and release the software a few weeks later, said a source familiar with the company's plans. Macromedia, whose shareholders will vote on a proposed acquisition by Adobe Systems on Aug. 24, released the Flash 8 public beta, a test version, earlier this month.

Flash, originally a Web site animation tool, has emerged as a potentially formidable competitor in the race to build powerful Web-based applications. Macromedia has officially re-designated it as a platform for application development.

But it is the software's video capabilities that are stirring the most interest, particularly among those who think the new version's improved codec, which is its particular video compression format, and various other advantages could make it a significant threat to Microsoft's (MFST') Windows Media technology, RealNetworks' Real format and Apple Computer's QuickTime format.

"This new version of Flash is quite an improvement," said Tim Bajarin, an analyst with Creative Strategies in Campbell, Calif. "If positioned more as a media engine, then it could cause Real, Apple and MFST some concern since it will evolve into a competitive platform for streaming video."

Macromedia, which has penciled in a summer release date for Flash 8, declined to comment further on its timetable for the release.

The company has promised big changes in Flash 8, and many of them center on its video capabilities. Flash 8 boasts a new codec, On2 Technologies' VP6, that both companies claim will provide dramatically improved quality over the Flash 7 video codec. Flash 8 also supports alpha transparency, which lets authors combine Flash video with text, vector graphics and other Flash elements.

But while Macromedia touts Flash 8's new video bells and whistles, those betting on a Flash video ascendancy point to longstanding Flash benefits, particularly its cross-platform reach.

Because of its small size and its being bundled with MFST Windows and other operating systems, Flash is almost universally distributed. More than 98% of personal computers connected to the Web have some version of the Flash player installed, according to Macromedia, and more than 100 equipment manufacturers are building Flash into their devices.

In several demonstrations of Flash video in recent months, Macromedia has mocked the experience that some Web surfers go

NPD Group through when trying to access RealNetworks or Windows Media video clips. In the demonstration, the people trying to access the video are confronted with dialogue boxes prompting the download of large players. Then they have to choose bandwidth speeds and other options.

Flash video, by contrast, is "playerless." That means video clips play embedded in the Web page, and Flash developers can design their own interfaces and determine their own buffers and other technical settings.

Macromedia's potential competitors say the software is too lightweight, failing to offer an array of features important to both media purveyors and consumers.

"Flash doesn't have digital rights management, and studios care about DRM," said Michael Schutzler, senior vice president of media for RealNetworks. "We are focused on intellectual property that has value, where DRM matters. Flash is fine for ads, but none of the studios are going to do this."

MFST defended the comparative bulk of Windows Media Player, saying the software does a number of things Flash couldn't. The company specifically mentioned its 15 content services, media library for content management, device synchronization and CD-burning capabilities.

"While Flash is receiving some good uptake on the Internet today, it has limited applications beyond short form, streamed content," Kevin Unangst, director of Windows Digital Media at MFST, said in an e-mail interview. "The scalability of Windows Media Video 9 (WMV9) allows it to be implemented in an incredibly broad range of applications, from standard definition video on wireless handsets to high-definition video on next-generation DVD."

Macromedia, which tends to downplay its competitive position against MFST, doesn't offer much of an argument to the company's claim that Flash and Windows Media are targeting different markets.

"I don't think there's really direct competition between Flash video and Windows Media," said Kevin Lynch, Macromedia's chief software architect. "The direction we're headed with Flash video is aiming at Web video, video embedded on Web pages. That's a different segment than downloadable videos, full-length movies, and Windows Media is supplying features toward that model."

But even if Macromedia is leaving full-length downloads to the fatter clients, analysts say MFST and RealNetworks can't be happy about Flash video's progress in either technology or popularity.

"Macromedia is going to keep increasing its functionality, and it will be a competitive threat over time," said Chris Swensen, analyst with the NPD Group. "Over time I can see Flash eating away at the market."

At least in the Web video segment, Flash has already begun its advance, according to one analyst.

"While I never discount MFST and doubt that Windows Media Player will get knocked out of the marketplace by Flash video, I also know that some leading brand sites are already voting for Macromedia," said Harley Manning, an analyst with Forrester Research. "And I think that more will do the same when the new player and tools arrive. At the very least, this will force MFST to think differently about some aspects of their product."