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iPad: No Flash Video, No Problem — There’ll Be Apps for That

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In arguing that Apple’s (s AAPL) iPad could change the way people consume video, the biggest hurdle to my thesis was that the iPad doesn’t support Adobe’s (s ADBE) Flash, which has become the de facto vehicle for delivering video from a number of popular web sites. How could the device revolutionize online video viewing when it doesn’t support the main way that people currently view video online video?

While you probably won’t be able to stream video from Hulu or Netflix (s NFLX) on the device at launch, I’d argue that the lack of available web video on the iPad (i.e. video delivered in Adobe Flash or Microsoft (s MSFT) Silverlight) is only a short-term problem. That’s because I believe that over the long term, such content — and more — will be made available through iPad apps.

As time goes on, I expect iPad app development to be driven both by consumer demand and by media companies looking to develop new business models. Apple already has a vast — and growing — developer community for the iPhone and iPod touch, and video providers have shown that they will create applications for individual devices, so long as they see a decent user base and a possible monetization strategy.

Roku, for instance, has sold only 500,000 units so far, but there are hundreds of organizations developing apps (or “channels,” as Roku likes to call them) for its broadband set-top box. Same goes for Boxee, which to date has less than a million users for its beta software and hasn’t yet rolled out its hardware device — yet still lays claim to a healthy community of developers that want to get on its platform. Even in the most conservative estimates, Apple is expected to sell more than a million units of the iPad, which means there should be video companies lining up to develop apps for it.

Furthermore, Apple has already proven that its apps can provide new monetization models for content owners. Prior to the iPad launch, much of the discussion about it revolved around how the device could help book, magazine and newspaper publishers create new revenue streams. But the creation of new business models is equally important to video publishers.

Major media companies have long bemoaned the fact that they haven’t been able to monetize their digital assets as well as their broadcast, cable, box office and DVD revenue streams. And while sales of digital apps in the short term may not be a panacea for the slumping TV ad market or weak DVD sales, the iPad app store at least presents the opportunity for paid app or subscription models that weren’t available before.

Major League Baseball’s app strategy is a perfect example of how video publishers have been able to leverage the iPhone — and soon the iPad — to better monetize their video assets. The MLB At Bat app — an updated version of which Apple showed off during the iPad presentation — was the No. 2 highest-selling app in 2009, despite its $9.99 price tag. And many of its users also subscribed to the league’s service, which allows customers to stream live games from a web browser, select set-top boxes (like the Roku player or the Boxee Box) or mobile device for $100 a year.

You could see similar possibilities with the release of a Netflix app, which would extend the brand onto yet another platform and could boost adoption for users that want to take their streaming videos on the go. And if Hulu is really looking to move to some sort of a paid subscription model, as it has long been rumored to be considering, the iPad presents the perfect medium and platform for it to do so.

So, no, video on the iPad won’t be Flash-based. And no, it won’t be “open.” And it probably won’t be free. But providing a means for video publishers to develop new revenue streams on the iPad is probably not a bad thing — even if those revenues are based on a closed system.

46 Responses to “iPad: No Flash Video, No Problem — There’ll Be Apps for That”

  1. Chris Dukich

    I purchased the iPad a couple weeks ago and haven’t been able to watch many videos at all… My YouTube app failed to play videos out of the box and after a couple phone conversations with apple (who tried to sell me apple care instead of fixing the very basic problem) they told me to visit the store. A genius at the apple store told me to call me to call me Internet service provider – like comcast is going to have a clue how to fix my YouTube app!!!

    How rediculous – every day when I browse the internet on this thing, I scroll past all the videos that I can’t watch. I bought a large 700 dollar iPod that runs novelty apps.

    I hear you on the short term problem, the device does have awesome potential, just wasn’t expecting to have problems with Apple devices.

  2. Why can’t people see that the ipad is the biggest waste of money that anyone can possibly fathom (except maybe the scion xB). They will never allow Flash to be used on the ipad b/c apple will not make money on itunes. Also, there is no reason why you would by this POS over a tablet netbook or something like that. At least the netbook has a keyboard that does not use half of the screen, and it can run multiple apps at once. Apple is so hyped up and over rated because they have catchy commercials and aesthetically pleasing electronic junk. I give them a little credit though, but the iphone is where I draw the line, I mean at least it can kinda make calls. The ipod touch and its new bloated cousin the ipad only exist b/c apple knows that they can market useless crap to people and that their blind followers will shell out hundreds of dollars on something that is only slightly better than the last POS that they shoved down our throats. If you really want a device that can accomplish simple tasks like playing Youtube videos, buy an android phone (preferably 2.0 or better). It is created by Google who currently owns like half of the internet including Youtube. Also, the android market has 1000’s of free apps and 1000’s more that are < $5.00. Say goodbye to itunes, which is what Apple should have done with the ipad.

  3. Apple Fan for Life

    The problem is this : I visit a webpage. It has “holes” in it. I can not play those videos. Period. Thats the problem. I could care less about downloading videos, episodes, movies, or downloading an app that would allow me to view videos. Unless that app functions as a PLUGIN which allows me to browse the internet and watch the videos without having to close out of the internet and launch some other app – then the iPAD is NOT worth spit. Sorry. It is not a revolution ……. yet. Perhaps this oversight will be corrected in the future, but right now, its basically a fancy ebook reader, note taker, and web toy.

    I dont know what the harm would be in selling a real computing device……. After all – they could have loaded it with a few more options (camera, usb, etc…), and a full version of the MAC OS. When the device launches you could have had the option of the ipod interface OR Mac OS……. thats what I was hoping for. Oh well.

    This is coming from someone who loves Apple…..

  4. If you really think about what Apple is doing its pretty genius. If someone thinks that Microsoft is Monopolizing the industry think again. Apple is basically saying that if they cannot make money off the product we do not want it on our I-Devices. Think about the loss in revenue if the I-Devices started supporting flash plug-ins. People would no longer need to get Apps approved from Apple and have to put them in the App Store, they would be able to build a website and sell monthly subscriptions to multiple games, videos, music, etc themselves. If Apple supports flash….Kiss their app store good-bye! I cannot believe people do not think about this logically and by an income standpoint…. Also, Apple controls what Apps you can publish. Do you really think that no one in this world has devised a way to make a Flash App? This is one highly educated, well equipped world with massive technology and alot of programmers out there.

    As for the Hulu App comments, i agree, why would a company that makes money from Advertisements pay money to build an app that may or may not be approved by Apple to begin with? I doubt Apple would allow HULU anyways because it offers something that Apple is selling. I am sure Hulu probably already wanted to do it but found out that it would be denied…. Stick with Laptops with the flip monitor which turns into a touch panel. Full capabilities. I guess if you are an e-book reader the IPad will be awesome, unless you need a new paper weight.

    I give Apple credit for putting this out their but i discredit the ability to use the product. Apple blames security concerns but the only security issues they are faced with would be the security of income from Apps that are already FREE!

    Yes FREE!

  5. Patricia Griswold

    I am an Apple person. I have owned Apple computing products, exclusively, since 1999. I currently have a MacBook Pro and an iPhone 3G S. I was so excited when I heard about the iPad. Nice and small, very light, Wi-Fi, 3G. Big, bright screen so I won’t go blind on the go. I read about internet plans for the iPad which are estimated to run about $20.00+/mo. I was OK with this until I read about the absence of Flash. The iPhone is a phone so I was not too worried I did not have Flash. YouTube is an included iPhone app. I will not be spending $800+ for an internet gadget that will not let me view Flash content. It is just totally absurd. It will also be pathetic if Apple decides to sell apps to run stuff that is FREE on any other computer in the entire world running a browser with required monthly internet fees. I think they have gone too far on this one and I hope it bites them in the ass.

  6. Doesn’t anyone realize that this is going to happen at some point anyway? The business model media companies have grown so accustomed to for decades is getting turned upside down for all the reasons stated above. The real discussion here should be about the marketplace that Apple has created for these media companies. iTunes and App Store. This is currently the medium of choice for people because of the popularity of their devices, and the content available is far more vast than any other one marketplace. Not even Google has this much available content. It is literally the equivalent of DirecTV having 100 channels and everyone else trying to compete having only 5. Doesn’t matter how good the hardware is. Except Apple has that much of a lead in every category of entertainment content(music, tv shows, movies, apps, and soon to be ebooks). These devices have beautifully simplistic and obviously popular user interfaces. The tech isn’t that cutting edge, but the UI is so ahead of all these other guys that dominate. It’s what the masses want and no matter how much we whine someone was going to do this one day. Anything you want to buy all in one tiny little package. The devices are still pretty damn good and they distribute content better than anyone. As scary as it is, this is what happens when people start taking things for free. Thanks Napster.

    • I also can’t believe I’m the only one who thinks paying for entertainment is so ridiculous. These companies shouldn’t have to give their good, original content away, and rely on other (advertisers) to make or break their bottom line.

  7. HTML 5 is not going to replace Flash or Silverlight.
    * There is no rich UI front-end like Flash, Silverlight.
    * Last I checked, Live streaming was not a possibility.
    * DRM is not present, or encryption for that matter.
    * tag – still requires the end-device to decode H.264.
    * Flash has other nifty features, like Games, objects etc etc.
    * Not sure how the User experience and analysis works within HTML 5.
    * Its not even released yet; so how can real businesses wait for RFCs to ratify and stall their business of today?

    Not having Flash on the iPad is an Apple choice. You wanting or not wanting to use it is yours. Pick based on your need.

  8. Enough with the conspiracies!

    Apple does not restrict flash to sell via iTunes. If you pay attention to earnings, iTunes has never been more than a break even business to sell iPods. A nice service for customers with apple products.

    Flash is restricted for a couple of very good reasons.

    1. It is a huge resource hog. It brings my multi core laptop to it knees 10 times a day

    2. For a focused purpose, super responsive product, you can’t rely a such a bad performer dragging down the user experience – it takes the shine off their device.

    3. Its features are now redundant with HTML5, which is open and Apple has optimized

    • thebigchuckbowski

      All they need to do is put a warning before you install the Flash plugin. I can understand the argument on smartphones but this thing has a decent processor and can handle Flash. Again, leave it up to the consumer to decide what they want to do with your product. If they’re willing to use a slightly slower device so they can actually use the internet for more than just reading, then they should be able to.

      And, you’re kidding yourself if you think HTML5 for video content is here and we can immediately leave Flash behind. Are you nuts? Maybe in two years they can release a device like this. Not now.

      The whole reason Apple can sell this thing for $500 is because they’re banking on what they’re going to sell in iTunes. So, anything they can do to force people to use iTunes, they’re doing. It’s not a conspiracy, it’s just plainly obvious. Don’t let your dislike for Flash and your love for Apple cloud your vision.

  9. Mark Van Hoogstraten

    If Safari on the iPad supports open video format on the web, and Youtube would do so as well, we wouldn’t need Adobe Flash or any application to translate this. ;-) And these video’s load much quicker!

    • Ryan Wheale

      Flash has many purposes besides video, and would have died a long time ago if it was only used for video. Flash provides a platform for developing Rich Internet Applications used by many websites out there. Flash is over a decade mature, and is installed on over 99% of computers out there… meaning everybody is using it. The fact that Apple doesn’t support it blows my mind.

      The iPad is on par with Microsoft’s Internet Explorer: it will be widely adopted by millions of idiots, and for the next decade will serve as an anchor to the forward progression of technology.

  10. @Funeral Director: Yes, the same thing should be said of Boxee, which to me, is one of the most over-hyped things in the space in the last two years. I’m all for it, but many, many people already claim it the winner when it’s not even out in the market yet.

  11. Buy an iPad, be an iLoser. Apple is trying to sell this to suckers for a lot more than some laptops and netbooks cost. Then Apple also wants to charge them tons more for videos and games they can already get free on the web. Apple is no longer cool and Apple fanboys are now iLameboys.

    • I agree. The people who create movies and music and games and write books and magazines and newspapers should all work for free and not earn anything for their hard work and creativity. Oh wait, never mind, I don’t agree.

      I am perfectly willing to pay for professionally created media and entertainment. And so is the rest of America, they prove it by spending billions every year on films, music, games, sports, books, magazines newspapers and more.

  12. One thing I have not seen anyone discussing, because it is a guessing game at this point, is how many iPad’s will be sold? If Apple does not sell a lot of them, then the opportunity for content owners to make money via apps does not exist. What’s the number of devices Apple needs to have in the market before there is a really opportunity for content owners? And whatever that number is, how long will that device penetration take? I don’t see anyone asking what happens if the iPad does not sell as many as everyone assumes it will.

  13. thebigchuckbowski

    Please take the Apple Fanboy glasses off for two seconds and realize you’re advocating consumers paying money to get flash content that they can get for free on EVERY other computing device on the market except smartphones. Really? That’s good for consumers?

    You mean if I own an iPad and Hulu releases an App, I could pay money for a free service. What a great step forward in our society.

    • Ryan Lawler

      I’m not advocating that video companies charge for apps that have content they otherwise give away for free. What I’m saying is that those companies already want to roll out more monetizable online video services, and the iPad gives them a platform for that.

      Just a couple of examples:

      Hulu won’t be charging for an app that has the same content free on the web site. But if they do roll out a subscription service, the iPad gives them a platform for it.

      And there are already some pretty slick apps for cable networks like HBO and AMC — with the iPad they can build value-added services through subscription or pay-per-view sales direct in the app.

      I find it interesting that everyone agrees that the iPad should help print publishers, but not video companies… Don’t the same issues apply, in terms of free vs. paid and developing new business models?

      • thebigchuckbowski

        Sure. They could have the app be free but why should Apple force these companies to hire employees and spend the time just to create an iPad app (that they aren’t going to make any money on beyond opening up their content to more devices) when these companies have perfectly usable websites.

        The “well, they can make an app” argument is complete bull. Flash is just as much a part of the web as CSS and every video being in HTML 5 is years out. They can try to say it’s because they want the iPads to run perfectly, then why not block Flash on MacBooks too? Or how about just giving a warning to users before they install the Flash plugin? The ONLY reason to block Flash is to force the creation of Apps (so Apple gets paid) and force you to buy movies/TV from iTunes (so Apple gets paid). Frankly, it’s a disgusting business practice and the fact that there are bloggers cheerleading this is completely absurd.

        “I will defend net neutrality until the day I die just as long as we’re not talking about an Apple device!”

      • Ryan Lawler

        The alternative is that video publishers make video available for free, in which case neither Apple, nor the content owner gets paid. And the consumer has less choice because the content owners decide there’s no point in giving stuff away for free indefinitely.

        Oh, and uh. I never said I was for net neutrality. I realize this puts me in a contrary position in the blog world, but whatever.

      • Funeral Director

        There already is an app for that. It’s the iTunes store.

        Hulu is a solution to a present day problem. The iPad, and other platforms like it, represent an opportunity for media companies to build the dual revenue stream model they desire (subscription + ads).

        Apple is dead on with this product, others will be following.

      • Anonymous

        Even though there might be apps for flash I do not like Apple putting a throttle on my freedom. Don’t get me wrong I really like Apple products, but the tablet is really pushing it, it’s almost a computer! I would rather have flash and low battery life rather than a lack of decisions. Apple is (and should be) free to make decisions about flash in their products. In fact it is probably a good business decision on their part. However, I do not like how Apple is attempting to centralize (or even monopolize) all the media. No monopolization is good, some of you might remember (or read in text books) about how at&t monopolized the telephone. It was insanely expensive compared to today. Once the government broke up the monopoly, BAM no more backpack cell phones with outrageous monthly prices. The cost of using the telephone gradually decreased with competition.

        I think this is a great product, however, for the technologically challenged it’s easy and simple. However, for the cheap tech geek they might want something with more flexibility. I thought about getting the iPad, but without the Flash its a no for me. The point I am trying to make is that with competition everything is better. Also, I hope Apple doesn’t grow into something like Microsoft, a pseudo monopoly.

      • thebigchuckbowski

        I think the fact that facebook (the number 3 video provider on the web) doesn’t have video functionality in their iPhone app is pretty telling. The iPhone has been out how long? And we still can’t watch hulu, facebook, etc. If those publishers aren’t creating apps or apple won’t allow their apps, why would they for the ipad? It’s not going to come close to selling the number of copies the iPhone and iPod touch have.

      • thebigchuckbowski

        How is the only alternative that publishers give it away for free? If flash is available, I have to suddenly put my content online for free? I can’t put it in the apple store if i want? Or sell it on my own? Or sell it through different channels? Nope. I can only give it away. Thank god for apple. How would any of us make any money without them?

      • thebigchuckbowski

        Really. Apple is making it harder for content creators to sell their content. If Apple doesn’t let your product in their store or you don’t want to sell in their store for whatever reason (and there are plenty), IT’S IMPOSSIBLE TO MAKE ANY MONEY OFF THE IPAD. So, how is that good for publishers?

        Do we really want to enter a world where the only way to publish content online where people can get it is through Apple? Really? What are you going to say when they start taking 90% of everything they sell, or only sign contracts with major publishers and leave independents by the wayside? Publishers can’t say a word because it’s the only way to get their content to their audience.