Darrell Hudson

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Google’s H.264 decision: It’s all about YouTube costs

That argument makes a whole lot of sense. Real business sense. The costs of warehousing all of that YouTube data have got to be astronomical. And, I would bet that the cheaper way is better, and they can continue to improve the codec and make minute changes to the code to upgrade indefinitely. ~ hoaxoner

Amplify’d from www.zdnet.com

Everyone wants to boil down Google’s decision to remove H.264 support from Chrome to be a religious one. To me, it’s obviously infrastructure-related.

Google announced on its Chromium Blog on Tuesday that over the next few months, development builds of the Chrome browser would no longer support the H.264 video codec which is used in a wide variety of embedded video formats used on web sites all over the Internet.

Infrastructure build-out and optimization strategy is something I know a great deal about. It’s what I do as my day job as an Infrastructure Architect at IBM — understanding what our customers need to do in order to minimize their infrastructure overhead in terms of systems, storage, networking and facilities as they plan for further growth.

We continue to invest in systems infrastructures, increase our hiring, and adjust our compensation programs as required to manage our growth and develop and promote our products and services, and this may cause our operating margins to decrease. Acquisitions will also remain an important component of our strategy and use of capital, and we expect our current pace of acquisitions to continue. Our full-time employee headcount was 19,665 at September 30, 2009 and 23,331 at September 30, 2010. We expect our cost of revenues will increase in dollars and may increase as a percentage of revenues in future periods, primarily as a result of forecasted increases in traffic acquisition costs, data center costs, credit card and other transaction fees, content acquisition costs, and other costs. In particular, traffic acquisition costs as a percentage of advertising revenues may increase in the future if we are unable to continue to improve the monetization or generation of revenues from traffic on our websites and our Google Network members’ websites.

The movement away from H.264 and to open formats such as VP8 and Theora is simply a canary in a coal mine.

The religious decision about what format they eventually chose is a red herring, a side discussion that simply detracts from the real issue — It’s all about Google coming to the conclusion that supporting all kinds of video formats at YouTube requires a large amount of infrastructure, which costs a great deal of money.

Eventually, in order to consolidate their infrastructure overhead, Google will need to transcode the entire YouTube library into a smaller subset of formats, and since they have to go through the painful effort of doing this anyway, they might as well do it with open formats that they control in which they are beholden to no-one.

So from the perspective of a secondary content provider and as developers of browser software, such as Apple and their Mobile Safari which runs on iOS, you can either continue to embrace H.264, or your can go with what YouTube uses.

My guess is that in addition to Android licensees, Apple and other device manufacturers which use embedded browsers such as RIM are not going to deny their customers and end-users embedded YouTube video support if Google chooses to encode to to a VP8/Theora standard, and I would expect the same of Microsoft and Internet Explorer and its embedded variations as well. Mozilla and Firefox we already know is completely on-board.

Read more at www.zdnet.com



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