Adobe opens Flash--How much?

[John Gilmore]

Part of the fun of reading press releases and legal arguments is
figuring out what they deliberately left out.

In Adobe's case, gnash and swfdec were conspicuously not mentioned.
The closest they came was here:

  http://www.adobe.com/openscreenproject/faq/index.html

  ... we want to ensure the industry can confidently continue to support
  the SWF format. This will permit the development of applications
  that "play" SWF files. Adobe will of course remain focused on making
  the best, most reliable and consistently distributed implementation
  across desktops and devices.

The hope on their part is that Adobe SWF will not be replaced by
something Adobe doesn't control -- neither by an extended free
software SWF player, nor MS's Silverbullet.

Adobe only gets a small revenue stream from their Flash Media Server,
which is the only supported way to serve up Flash video.  Despite a
90% price drop in January (from $45,000 to $4,500, with a new retail
product at $995, due to new competition), their revenues are up over
last year's.  Their most recent quarterly report says "The Platform
segment provides developer solutions and technologies, including Adobe
Flash Player and Adobe AIR which are used to build rich application
experiences."  That segment reports $28,132,000 in revenue for the
months of December, January, and February, at a cost of $3,973,000,
for a gross profit of 86% ($24 million).  This is a only about 3% of
their business.  The flash server may also fall into their Enterprise
segment (they're unclear), which is also relatively small.

Adobe's total revenues were $890 million with a gross profit of 91%
($808 million).  80% of their revenues come from "Creative Suite 3"
(Photoshop, the Flash authoring tools, and a zillion other things
they've acquired) and Acrobat.  Nobody would need those $999 Flash
authoring tools unless Flash remained the web standard that it is
today.  (Whether it's a proprietary standard, or an open one, is
almost irrelevant; they have the first-mover advantage regardless).

Freeing up specs for things that the community has already
reverse-engineered makes for good publicity, and eliminates a legal
EULA issue that Adobe was likely to lose in court in most countries,
but doesn't change anything substantial.

Adobe's change to the license for the free Flash player, to allow
distribution in devices without royalties, is a more interesting
tactic.  Gnash has drawn some of its early support from communities
that were ill-served by Adobe's previous licensing ("make every
separate end-user download and install it themself -- or pay us!") or
by Adobe's seeming inability to recompile their player for 64-bit
machines.  For some markets, Adobe may be able to drive a wedge
between free-as-in-beer and free-as-in-freedom.  The OLPC support-gang
would be overjoyed if OLPC could ship a free-as-in-beer proprietary
flash player.  Something like 20% of the support tickets would go
away.

Their announcement was unclear about the license change; in
particular, we don't know if:

  *  It applies to the "Adobe Flash Player" or just to "Flash Lite"
  *  It applies to the current player, or only to some eventual "later
     major release".
  *  The OLPC would be considered a qualified "device" versus a general
     purpose computer.
  *  It would allow linux distributions and Windows OEMs (not just
     "devices") to ship a proprietary flash player.

If they're smart, they'll make everything around Flash Player as free
as possible, protecting their much bigger revenue stream from the
harder-to-clone Flash authoring tools.

Sorting these questions out will take a few days (or longer) of
interaction with Adobe.

	John