JamieG Analysis

If you follow my blog, you will notice that I take a lot of effort in looking at Adobe and what they are doing with their flash technology. To help position this post, let me first refer to previous posts in reverse chronological order:

Flash DRM, a disappointing implementation: where I discuss pitfalls in Adobe’s plans, but for which recent developments appear to have fixed.

Adobe’s plan for world domination: where I discuss how Adobe may leap over the current trends in digital media like, for example, what Apple/Itunes is doing.

Just a few days ago, Adobe released FlashPlayer10 BETA preview. Among many improvements, the main ones of note are:

1. built in P2P networking which could turn Adobe into one of the biggest controlled P2P networks
in the world over night.
2. Capability for Flash Player to write files to your Hard drive.

These two developments are exactly where I explained Adobe should be going with flash in my post “Flash DRM, a disappointing implementation”. Let me explain.

Adobe Media Player is all well and good, but the requirements to install it, even being so easy, is a hindrance. It is also designed as a portal with ultimate control going to Adobe. (Similar to Itunes and Podcasts).

The problem I see with all this is that the idea behind Apple and Itunes and similar business models, is that they intends to be a totally dominant in the distribution chain. Trying its best to stop any direct producer to consumer transactions.

This plan has been working well, so well in fact that the incumbent distribution gatekeepers have been doing there best to erode Apple/Itunes market lead. For example, DRM free music available on Amazon and not on Itunes. NBC shows available on hulu, and other non Itunes services and ignoring/forfeiting some short turn profitability on the content, if on Itunes, in the hope to break up the market into competitive players.

During this fierce battle for digital media dominance, Adobe has steadily been building tools that will make it all mute. I may not agree with all the pricing structures Adobe has but there is no dough that Adobe has built a platform in which any content producer could build an Itunes like experience either on their cross platform AIR technology, or with this new FlashPlayer10, simply in any Flash capable browser.

This leads into the likelihood that Adobe is likely to soon be distributed in SetTopBoxes, or embedded in all TV sets sold. Imagine a TV set with a H.264 engine, great interactive capabilities, secure content (DRM capable) and secure P2P capabilities. And top it all of, millions of Web developer/content producers that are trained up in the technology and cheap.

This is why, in my opinion, Steve refuses to let Flash on the IPhone. It is also why there has been rumors of Apple purchasing Adobe. These titans are headed for a showdown.

Let me paint the picture here. Imagine you are the owner of a successful content production chain, for example, the CSI franchise or the Law and Order franchise. You most likely are connected to a large traditional content gatekeeper like NBC etc. NBC is now controlling how this content is distributed on TV and Web. Until these tools where available, there was no choice in the matter. You had to use a gatekeeper with connections to online distribution technologies. This has predominantly been Apple. Microsoft is also in the mix but I tend to think they are a bit clueless as they listen to their major clients too much, the big incumbent companies. And we know they have no clue.

As NBC really controls your content, they ultimately have a lot of power over you. They can, to a degree, make or break you. Apple/Itunes, with its dominance in digital media now has the edge over the traditional gatekeepers. As they have used this power over their content producers, they can see how Apple could use it over them. This is why they are so paranoid. (No one is more paranoid then a thief.)

Considering all this, I feel that once the tools to allow content producers to distribute to consumers are available at reasonable prices, the dominance of Itunes and similar gatekeeper type models, (Hulu, etc) are likely to become less relevant. What will become more relevant will be social network models that help people discover these islands of content. And to a degree, this is where the traditional players are likely to fall into, as its that or nothing.