Widespread Adoption Of VP8 Will Take Years, But Google Can Afford To Wait
While I agree with those that think Google making VP8 an open-source video codec is a big deal, even if it ends up having licensing issues, it's way too early for anyone to talk about the demise of H.264. It took years for H.264 to surpass VP6 and become the preferred video codec and it will take years for VP8 to seriously challenge H.264. While initially the introduction of VP8 is bad news for content owners since it means more complexity in their workflow, over time it's really about giving them more choice, which is a good thing.
For Google, they know that VP8 is a long-term play, just like YouTube has been. Google is willing to spend the time and money to get VP8 widely adopted without the need for the codec to have to generate any revenue for any of their product lines. Google makes no money from licensing VP8 so this is not about money for them, not yet at least. Initially, VP8 will be just like YouTube. A platform that enables them to get mass scale and reach and plenty of time to integrate video into other major lines of their business.
As the browser wars continue to heat up and companies take sides on which video codecs they will support, Google's in a unique position. Not only do they own one of the fastest growing browsers with Chrome, but now they also own the VP8 video codec and control YouTube which has the most traffic of any site on the web. While some have suggested that all Google needs to do is convert everything on YouTube over to VP8 to get mainstream support for VP8, that by itself won't be enough. If it was that easy, then Google would not be working with all of the other hardware, software and platform partners they announced last week.
This is a long-term play for Google and one that involves multiple devices, which means they have to have hardware support. And even with the hardware partners they announced last week, we still don't know exactly what those hardware providers are going to do. While many partners were quick to say they "support" Google's initiatives, they haven't said exactly how they will do that or which future chipsets will offer support for VP8. The bottom line is that that true VP8 support is going to take years to get but Google is in a position where they don't need to rush the adoption. Google can take their time to do this right since HTML5 is still not ready for prime time and content owners still have plenty of time to devise content monetization models.
I'm sure some will judge Google based on the adoption of VP8 six months or even a year from now, but that would be short-sided thinking on their part. With the news Google put out last week and the groundwork they are laying for what will become of VP8, the real judge of VP8's impact on the market won't be truly felt for a few years.