“On TV And Video” is a column exploring opportunities and challenges in programmatic TV and video.
Today’s column is written by Sorosh Tavakoli, senior vice president of ad tech at Ooyala.
Following Steve Jobs’ open letter to Adobe in 2010 explaining why Apple doesn’t allow Flash on Apple products, we heard predictions about the player’s demise but little changed.
However, the issue recently re-emerged with force when Mozilla, citing security concerns, turned off the Flash player plugin on Firefox. Facebook and Google added fuel to the fire with statements about the player’s shortcomings. The IAB weighed in, urging the industry to adopt HTML5 as the standard for mobile video ads.
While many sing the praises of HTML5, the industry as a whole hasn’t taken the time to study the widespread ramifications of “firing” Flash. Many ad tech players, publishers and broadcasters that have switched to HTML5 for desktop have lost significant revenue opportunities because of gaps in HTML5. As a result, they usually quickly change back.
The Rumors Of The Demise Of Flash Are Exaggerated (For Now)
As I write this, Flash has been resurrected on Mozilla, Chrome’s Flash Auto Pause is in beta testing and Facebook is still running Flash videos on its desktop applications. Only YouTube and Netflix have truly crossed over to the alternate non-Flash options on the desktop for premium content delivery.
So, despite all the brouhaha, Flash is not yet dead, which is good news for many advertisers, publishers and broadcasters.
What many HTML5 proponents don’t realize is that publishers and broadcasters face a number of challenges – some rather daunting – in making the switch from Flash to HTML5. The crux of the issue is that Flash is still a prominent technology used for distributing and presenting online videos and the ads in and around them.
When publishers do make a wholesale switch to HTML5, many encounter challenges that negatively impact the user experience, and thus their ability to monetize content. The exceptions are those that don’t run ads, have a subscription video-on-demand business model or have mobile-only inventory, since HTML5 is the standard across mobile today.
So, while an immediate move to HTML5 may provide some benefits to content providers, the shift currently poses equally as many challenges.
The biggest issue in the Flash-to-HTML5 migration is that a large percentage of advertiser demand is still in VPAID 1.0 format, and those ads won’t run in HTML5. The demand side and its technology platforms need time to transition to the VPAID 2.0 standard, which does support HTML5. During the transition, the inability to run VPAID 1.0 ads in HTML5 will present perhaps the most significant challenge in the move to HTML5, as it stands to leave the most money on the table.
Another challenge: Browser support for new HTML5 streaming protocols, such as HTTP live streaming or MPEG-DASH, is not fully standardized, creating inconsistency between browsers or video players.
Digital rights management (DRM) support on browsers and devices also remains fragmented and complex. Full DRM support is typically required for Hollywood content, studio content and OTT providers.
Other issues include live streaming support, which is not fully mature in HTML5. Third-party analytics also aren’t fully supported, creating gaps in measurement abilities.
A Quandary
There is no doubt that Flash is a diminishing force in the online video world. But until HTML5 supports all browsers and achieves parity with Flash feature support, publishers should continue supporting Flash to ensure they aren’t leaving money on the table.
Publishers should be certain that HTML5 can meet all of their requirements for live streaming, third-party analytics and DRM. Most important is the VPAID issue that publishers need to monitor when deciding to migrate to HTML5. They need to be aware that many ads delivered from customers will be in Flash and VPAID 1.0 formats for some time to come, and that they will lose money if they make a wholesale shift to HTML5 before their customers transition to VPAID 2.0.
While it’s apparent that Flash player’s days are numbered, for the time being, the software still has a crucial role in allowing publishers and broadcasters to play and monetize online video. Instead of killing Flash entirely and immediately, publishers should take a more measured approach to the transition to ensure they aren’t foregoing opportunities and are meeting customers’ needs. I believe advertiser demand will catch up to VPAID 2.0 within two quarters.
Follow Sorosh Tavakoli (@soroshtavakoli), Ooyala (@ooyala) and AdExchanger (@adexchanger) on Twitter.
