In an interview this week in the Wall Street Journal, Adobe's CEO said that with the recent round of layoffs, Adobe would be better focused to grow their online video business. That's good news to hear from Adobe because being at the top requires a lot of work to stay there, especially when the competition is heating up. If there is one thing Adobe needs to really work on, it's their strategy for getting content owners to use Flash for video that needs digital rights management (DRM).
To date, Microsoft is still winning the business that requires DRM. Their free PlayReady solution PlayReady server costs $30,000 but as noted in the comments below, is offered by third party hosting companies without the need for content owners to buy their own server, which is what I was trying to imply when I said it was free. The PlayReady solution supports connected playback with streaming or progressive-downloaded content and yesterday Microsoft announced another customer, BSkyB, that is using Silverlight powered by PlayReady. Other recent wins by Microsoft also include Netflix which is using Silverlight for their Watch Now service for Mac users.
Adobe on the other hand is selling a server for DRM called the Adobe Flash Media Rights Management Server with a list price at $40,000 per CPU. Since there is no SDK, as noted in the comments section, third parties can't offer the functionality as a hosted service. If that price has come down, I hope someone will let me know, but from what I can tell, it is still that expensive. Right now, content owners needs more tools and support to help protect their content and try to make a business model out of online video. It would make more sense for Adobe to give away the DRM functionality to act as an enabler for content owners to use the other pieces of their Flash video platform.
I'm sure Adobe is just trying to be compensated for the work they have done to create the DRM server, but with so few content owners willing to pay the price, Adobe could make more money in the long run by bundling the DRM functionality into one of the other Flash Media servers.