Yes, by now we all know that YouTube finally supports the new and exciting HTML5 video which allows for video playback without using Adobe Flash. While this seems like a good news in the sense that we no longer have have to rely on Adobe's Flash to watch our daily dose of YouTube videos, there is something dark and dangerous lurking underneath.
This has to do with the video codec specification of HTML5 or rather the lack of it. While HTML5 has defined the new standard to include flashless video, it does not specify what video codec should be used as the standard. As a result of this sites like YouTube and Vimeo have implemented HTML5 support with the proprietary H.264 codec rather than the open source Ogg Theora codec.
The danger is that if giants like Google put its weight behind H.264, everyone is likely to start using that codec, just like Vimeo did, and before anyone know, it can very well be the standard. However if H.264 does become the standard, it will go against everything that the internet has been built upon.
Talking about licensing, it is also worth looking at the licensing that comes with H.264. In many countries, it is illegal to use H.264 without license from MPEG-LA. The license is required to both use or distribute H.264 encoded contents. However, H.264 is currently in its early stage and no licensing fee is required to distribute H.264 contents free to the viewer over the internet.
The licensing of H.264 changes year to year. Although it is free to broadcast it over the internet right now, the current license is valid only till the end of 2010 and MPEG-LA could very well start demanding a licensing fee from the next license.
We can also take clue from history to see what happened with similar circumstances in the past. We can take a look at what happened with GIF and MP3 in the past.
In the 1990's GIF was widely used over the internet although it was patented by Unisys. In August 1999, Unisys changed its licensing terms to require the payment of a one-time licensing fee of $5000-$7500 to use GIF. Imagine having to pay $5000 just to use an image.
Another case is with MP3. Before 2002, MP3 has a very liberal licensing which does not ask for any licensing fee for desktop software mp3 decoders/players that are distributed for free over the internet for personal use. This liberal licensing created what is known as the network effect. After the network effect, they changed the pricing.
Something very similar could happen with if H.264 becomes the standard HTML5 video codec.
We have talked about the potential impacts that the license of H.264 could have. However, it would not be fair to Google (or YouTube) if we do not take into consideration the performance of H.264 in comparision to the open-source Ogg Theora. To be fair to Google, this was one of the main considerations that they considered considering the amount of video that YouTube serves to everyone.
If [YouTube] were to switch to Theora and maintain even a semblance of the current YouTube quality it would take up most available bandwidth across the internet. The most recent public number was just over 1 billion video streams a day, and I've seen what we've had to do to make that happen, and it is a staggering amount of bandwidth.
Using a simple test case I show that Theora is competitive and even superior to some of the files that Google is distributing today on YouTube. Theora isn't the most efficient video codec available right now. But it is by no means bad, and it is substantially better than many other widely used options. By conventional criteria Theora is competitive. It also has the substantial advantage of being unencumbered, reasonable in computational complexity, and entirely open source. People are often confused by the correct observation that Theora doesn't provide the state of the art in bitrate vs quality, and take that to mean that Theora does poorly when in reality it does quite well.
All that we can say now is that Theora has come a long way and although it may not be superior to H.264, it is certainly competitive.
What about on the browser front?
On the browser front, Apple's Safari supports only H.264, Google Chrome supports both Theora and H.264 while Opera and Firefox supports only Theora. Internet Explorer does not support either of them.
Chrome's support of Theora probably means that Google has not entirely closed the door on Theora. Even YouTube's current implementation of HTML5 video is an experiment. So, there is no telling that Google could very well go with the open source Theora in YouTube as well.