Hulu and Delve Networks: We Still <3 Flash

Posted: May 19th, 2010 under advertising, Beyond HD Video, Digital Migration, iPhone - Hype and Reality, monetizing mobile content, Multimedia, New Media Strategery, Online (Multi)Media, Online Video, television.

…HTML5? Not so much…

In a move certain to cause much gleeful cackling and dry-washing of hands at Adobe HQ, Hulu and Delve announced that they are sticking with Flash, rather than making the Jobs-mandated move to HTML5.

The money graf from Delve:

Adobe Flash provides: ability to secure content, adaptive bitrate streaming, comprehensive
analytics and monetization of video through a wide array of advertising
options.
Customers that are using our mobile delivery solution are
willing to experiment with video on these new devices to figure out what
works and to keep their existing customers happy. But they all expect
that eventually the mobile/tablet features match that of the Flash
player on the PC.

Hulu said:

When it comes to technology, our only guiding principle is to best serve
the needs of all of our key customers: our viewers, our content
partners who license programs to us, our advertisers, and each other. We
continue to monitor developments on HTML5, but as of now it doesn’t yet
meet all of our customers’ needs. Our player doesn’t just simply stream
video, it must also secure the content, handle reporting for our
advertisers, render the video using a high performance codec to ensure
premium visual quality, communicate back with the server to determine
how long to buffer and what bitrate to stream, and dozens of other
things that aren’t necessarily visible to the end user.
Not all video
sites have these needs, but for our business these are all important and
often contractual requirements.

Behind these two statements, back in the misty shadows, loom the outlines of the Hollywood studios and TV networks. I’m guessing the last couple of weeks have seen lots of closed-door meetings about what happens when we all start watching TV & movies on our iPad(-like) devices.

The problem with just abandoning responsibility letting the Apple empire do all the driving is that, as we have seen in the last couple of months, Apple’s hidden face is starting to emerge. And it ain’t pretty. Allowing Apple to control the flow of content through its ever-expaning iTunes store just means that you’ve given up the pricing and distribution power on your creative products.

Ask the music industry guys how that worked out for them.

If you can find any, that is.

So let’s take a look at the objection of the big video players to Apple’s vision of the future:

1. Content security. If you don’t think that the movie & TV guys have been sweating blood over the nightmare scenario of their business model going the way of CDs, think again. For the last five years, I’ve been going to tech conferences in and around LA, and at each and every one, the most popular booths are the ones touting various DRM/security features. Now, publishers such as O’Reilly may hold that “DRM is more costly than piracy”, but in the executive suites at the studios, that is a minority view.

You just can’t make a business out of producing $200 million movies like Iron Man 2, and then hope to recoup your costs by giving away the content, and hoping … ads will support it? Or that you will sell enough merch through wider audience? Nuh-uh.

Adobe and the Flash team have spent years banging on various content-security technologies, some of which tout NSA-level encryption schemes to try to mollify the big content creators. I’m guessing there’s not much love for Apple’s “blind faith” scenario with HTML5.

2. Adaptive bitrate streaming. Sounds like something a character played by Dan Aykroyd in his heyday would have spat out in staccato fashion. Basically, it means that when the web is congested (or your bus travels between a couple of skyscrapers as you watch video on your Droidphone), the video will momentarily de-res a bit until the signal is once again clear.  We’ve found that having a momentarily blurry(ier) video is far less disruptive to the viewer than having fits, starts, jumps and the little hourglass on the screen.

Not having this technology means that watching a video is going to become a throwback to the early days of the web … when you’d be downloading a GIF and watching the lines appear … and then hesitate … think about it … then another line appears … then it hangs for a minute … then ten lines appear all at once … then you start clicking in frustration, trying to get to another page that doesn’t so closely resemble a chamber of Hell.

If you really want to Geek Out, check out this excellent deconstruction of the (supposed) HTML5 video standard VP8 on the x264 blog. It explains far better than I can all the nitty-gritty issues behind the hype on “open source” video codecs. Again: not pretty.

3. Analytics. Apple is maintaining that firewall for content served through its store & technologies. You can get raw numbers, such as how many people downloaded the app/video. But nothing more than that. Which feeds into the next point, big time –

4. Advertising. The big selling point for online/mobile video over broadcast is that we’re better able to target the ads to the users, based on the data we collect from cookies, user agents, location, time, etc. If this is missing, so is the competitive advantage, and the dollars start flowing back to tried-and-true TV.

Also, HTML5 is not as robust an ad-serving technology. For Hulu, which is the bigtime play of the TV networks, if the ads can be skipped as easily as with a TiVo, or excised altogether, what then is the point of serving up all that content for free? If the advertisers aren’t getting any value for sponsoring the programs then they quite simply … won’t. And then where does that leave us with our fancy new tablets? Watching more dancing cat on piano keyboard videos?

Apple quite simply does not care about that. Their point is not to help content creators or advertisers. Their focus is on selling as many overpriced gadgets as possible, and then locking the users into having to pay thru the nose thru Apple’s store to actually get any content to watch/listen/read on that gadget.

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