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Report: Adobe to Support HTTP Streaming

In a major reversal, Adobe (s ADBE) may support HTTP streaming in the next version of its Flash Media Server, reports Contentinople, citing unnamed sources. A move to HTTP would bring Adobe into stride with others in the video infrastructure market, including Microsoft Silverlight (s MSFT), Move Networks and now Apple (s AAPL). However it would put a dent in Adobe’s proprietary streaming revenues.

Adobe’s RTMP streaming transfers files from a special server in a single linear stream (the RT stands for “real-time”). It has been the market standard, especially in cases where video hosts are worried about copyright infringement, but new HTTP streaming products are cheaper and more scalable. They divide videos into chunks and transfer them in a non-persistent stream using regular web infrastructure.

Though Adobe’s Flash is the online video standard, the way the company makes money off of online video is by selling Flash Media Servers, which premium content sites buy to stream video using RTMP streaming. HTTP streaming, however, doesn’t require all those specialized servers. Contentinople, whose sources say a FMS 4.0 beta with HTTP streaming could be out in beta at CES in January, proposes that Adobe may be angling to make up cannibalized revenue by increasing use of Flash, which would in turn drive sales of Flash creative and development tools.

HTTP streaming is closely associated with adaptive bitrate streaming, in which chunks of video encoded at different bitrates are stitched together to provide the best possible quality stream throughout changing network conditions. That technology is especially important as content providers move to offer higher-quality, dependable web-delivered experience to an expanding list of of devices. (Adobe does already have something it calls “Dynamic Streaming” which also shifts bitrates automatically.) As I wrote in a feature for our paid service GigaOM Pro:

High quality video increases revenue potential because viewers have a more premium experience and watch for a longer amount of time… Adaptive bitrate streaming makes HD video a viable business, because it ensures a good experience for everyone by avoiding choked up pipes for those who can’t support HD, and giving a smooth, uninterrupted experience for those who can support it.

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