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Adobe Systems (Nasdaq: ADBE) has released its Adobe Flash Player 9 Update 3 software. Flash Player 9 has been in beta -- code-named "Moviestar" -- for some time, but this is the first version widely available that supports the H.264 high-definition video standard. H.264 is the same standard used by Blu-ray and HD DVD video players, and it's the standard that lets Apple (Nasdaq: AAPL) iPhone users view the wicked-sharp YouTube videos on their tiny screens -- even when the "same" YouTube clips are more blurry in a standard Web browser.
At the same time Adobe announced Flash Player 9 Update 3, which is available for download for OS X, Windows and Linux, the company announced its Flash server product line, which now supports H.264, too. The net result is that content providers using the popular Flash media streaming solution will be able to deliver HD content, and end users online will be able to view it. Adobe claims that Adobe Flash Player content reaches 99 percent of Internet-enabled desktops, as well as hundreds of millions of mobile 
and set-top devices.
"FOXnews.com features an extensive and continuously updated video library of breaking news, high-profile interviews and compelling segments from news programs throughout the day," noted Jeff Misenti, vice president and general manager of FOX News Digital. "Collaborating with Adobe allows us to enhance the viewer experience and meet the growing demand for Web video in high-definition."
Flash Driving Online Video
Adobe Flash Player can be used to view both live and on-demand media and entertainment on sites such as CBS, NBC, FoxNews Digital, PBS, MTV Networks, BBC and Hulu, Adobe said. Much of the activity is transparent to end users, who don't necessarily realize their browsers even use Flash.
As for high-definition online video, bandwidth on both the consumer and provider sides is key, and for HD online content to work well -- even when using the fairly lean H.264 standard -- consumers need high-speed Internet connections, while providers need to be willing to push the HD content.
"Hulu is committed to giving consumers the best online video viewing experience possible, and we are always seeking innovative, new technologies that help us deliver," noted Eric Feng, chief technology officer at Hulu. "Together with Adobe, we will provide a best-in-class, high definition video experience."
The Rise of H.264
"Content owners and distributors all see the benefits of H.264, namely better quality in less bandwidth, but the thing that is holding back deployment is cost," Van Baker, a media industry analyst and vice president of research for Gartner (NYSE: IT), told MacNewsWorld.
"The cable guys are deploying H.264 to MPEG-2 converters at the node to facilitate continued use of consumer premises equipment that is based on MPEG-2, [but] the satellite folks are deploying H.264 as quickly as possible to get the benefits of additional bandwidth, as satellite bandwidth is the most expensive and it justifies the cost of swapping out the consumer hardware," Baker explains.
Just Give Me HD
"Consumers don't care, as they just know they want high def and they don't care about the codec," Baker noted. "The Adobe news was not surprising given the trends in this direction, but the bigger news was the reduction in the cost of their flash streaming server."
On the server side, Adobe cut its pricing model at the same time it delivered a performance boost -- Flash Media Server 3 can deliver about twice as many streams as Flash Media Server 2, the company says.
Adobe is facing new pressures in the online video and rich Internet application (RIA) market, particularly as Microsoft (Nasdaq: MSFT) is pushing in similar directions with its Silverlight and Microsoft Expression Encoder platform.
"By offering the Flash Media Server 3 product line coupled with new pricing options, Adobe is reducing the barrier to entry for content owners who want to deliver streaming video or real-time communications online," noted John Loiacono, senior vice president of Creative Solutions at Adobe.
iTunes Ties
The new product line includes two offerings: Adobe Flash Media Streaming Server 3 for live and on-demand video streaming and Adobe Flash Media Interactive Server 3 for customized scalable video streaming services, plus multi-way social media applications. Both also support HE-AAC audio in Adobe Flash Player 9 (AAC is the audio format used by Apple's iTunes store).
Adobe said Flash Media Server 3 will be available in January 2008 and will ship with special pre-built services to make it easier to stream Flash Player compatible video. Adobe Flash Media Interactive Server 3 will be US$4,500, but single-server deployments will come in at $995. The Flash Player is free, of course, and can be downloaded at Adobe's site.
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