I Want my iTV

Rumors of the death of Flash are greatly exaggerated, says Jeremy Allaire in a TechCrunch guest post. Adobe CTO Kevin Lynch touts the ability to update the millions of Flash-powered devices over the network. Sun CEO Jonathan Schwartz resigns in realtime over Twitter. Nexus One updates the Android OS in realtime when I switch it on this morning. The iPad arrives in March.

Here’s another couple: Netflix streaming is now available on PlayStation, Wii, and Xbox, over Silverlight on Macs and PCs, and via 48% of its customers in the fourth quarter. The company expects 66% will stream by mid-2011, and added a record 1 million new subscribers Q4 for a total of 12 million. And this: Microsoft has released a Silverlight 4 beta client for Facebook on Windows and OS/X, with background notification, a grid UI for status updates, photo and video uploading and device access, and netbook/tablet support.

Each datapoint by itself suggests valid reasons why Flash will endure for many years on a majority of machines. Huge support among gaming developers, 75% penetration on the Web, and soon a foothold on every major phone but the iPhone/iPad . But taken together, Flash faces forces beyond its ability to cope. Whether it’s Silverlight choking off Flex/Air in the enterprise or Apple and Google scraping the cream of the developer community off the top, Adobe is being squeezed into a corner from which it can only escape by losing control of its platform.

Using HTML 5 as a rallying cry serves Google’s marketing and developer evangelism strategies, but its impact on Flash is minimal until the iPad ships. For iPhone users, it took two upgrades for the marketplace to provide a work-around with H.264, but once that was in place with YouTube it brought Ustream and other players in. At about the same time, FriendFeed enabled realtime streaming chat. Suddenly, integrated realtime streaming experiences could be leveraged to target valuable communities.

Whether it’s a Facebooked version of these technologies over Silverlight or a native iPhone/iPad version via decompiling and H.264 streaming, by March we will have multiple versions of essentially the same content running on PCs, Macs, i*’s, and Nexus One . Coupled with Netflix device expansion, holdout services such as Hulu will have to move quickly to avoid a stream of hemorrhaging customers away from what is no longer a unique offering. Watching how fast book publishers like Macmillan and Amazon have rejiggered their relationships to accommodate the iPad realities, can the networks (other than Disney/Pixar/Apple/ABC) be far behind?

Google released the Nexus One not yet a month ago, and already have provided an over the air update to the OS that enables major new features, most significantly a pinch zoom mechanism that eliminates the lion’s share of the utility gap with Web browsing. Given the higher resolution and therefore real estate of the screen, the N1 becomes an attractive alternative for catching up on the Web first thing in the morning or on the move. Indeed, it also suggests Kindle for Android would be virally received.

Extrapolate from that to the launch of the iPad and rumors that over the air updates and other data may be available when the device ships, it’s not hard to imagine both the appearance of an iPad-like competitor via Google and a dramatic acceleration in iterative leapfrogging of features. In other words, major site/app two-tracking of Flash/HTML streaming versions. If the New York Times is serious about being on the iPad’s gateway screen, a Flash-free version of its site is a minor investment relative to the value of being an incumbent or default service.

Push those dynamics out along the content supply chain and it doesn’t take an Adobe CTO long to figure out Flash tools must be quickly reengineered to accommodate both versions of these new sites and apps. Microsoft is already way ahead with its SIlverlight/IIS Media Server/Visual Studio pipeline, ready to spray H.264 streams into iPad web-based applications and subsequently native apps where the content providers maintain the relationship with customers. As Walt Mossberg said in conversation with Mike Arrington and David Carr on Charlie Rose, customers don’t care about formats.

The open standards argument currently championed by Mozilla, that H.264 is a proprietary technology with a looming cost trigger, is similarly irrelevant to customers, who will never notice where along the road to their browsers the licensing fees are absorbed. Most likely, it will be buried in the additional $5 for each book download that the iPad has moved back into the publisher’s accounts, or the delta between the iPad WiFi version and the fully loaded 3G ($329 to start.) Or we’ll simply pay extra for early release on the iPad, then a bit less on the Gpad, and so on, like the way films are metered out across cable, on demand, DVD/BlueRay.

Even there, the speed with which these models are accomodating the realtime Pads is daunting for Adobe. Even as the Academy ups the number of Best Picture nominees, many of the more independently produced films are already available on Comcast on-demand the same day as DVD. Streaming is quickly becoming the gold standard in the queue, and Flash-based venues are fragmenting across mobile and gaming devices. Oops, there goes that gamer dev advantage.

That’s where Jonathan Schwartz and Twitter figure in. Like Flash, Java has tremendous traction and the ability to act as an attention/gesture recorder for developer and customer behavior in realtime. And like Flash, Java is locked out of the iPhone and iPad. Interestingly, Google has already effectively minimized Java on Android by using Google Web Toolkit to spray Java code through Javascript onto Android devices. By spending big dollars and resources on the V8 engine to accelerate Javascript performance, Google started an arms race with Firefox and finally Microsoft to close the gap.

Inevitably, the dynamics of this new race for the middle, the sweet spot of RIA ubiquity, has more to do with the money to be made at the output end of the pipeline. Microsoft has Xbox and Silverlight, Google has its ad revenue, YouTube dominance, and growing Android Market, and Apple its gold-plated innovation chain and credit card access to the addicted customer base. Adobe? Like Sun, they have the developers, the reach, the realtime updating, everything but the fuel to drive the aggressive customer base that will pay through the nose for rapid progress. They want their iTV.

The Gillmor Gang — Andrew Keen, Danny Sullivan, Kevin Marks, and Robert Scoble — talk smack about Flash. Recorded live Friday, February 5, 2010.