Field Notes Inside an Integrated Communications Agency

Adobe's Flash has lost a key battle in the plug-in wars to Microsoft's Silverlight. Netflix has chosen Microsoft's Silverlight, a Flash competitor because it includes DRM software.

Netflix, the mail order movie-rental giant knows that in the future, movies will stream over the internet, right into your home and won't come via US mail on DVD. The problem is that movie companies won't let their movies be streamed unless they are protected. The solution is DRM (digital rights managed) technology - a technique that encrypts the data so it can't be ripped off (well, that's the theory at least).

Adobe's Flash plug-in is the most popular video technology on the Web. YouTube single-handedly vaulted them over Windows Media and Apple Quicktime. So you would think that Netflix would naturally look to Adobe to solve its video needs. But that's not what happened. They went to Microsoft.

I'm still trying to figure out how this happened? Can it be that Microsoft is giving away the software now to gain adoption? Is it possible that Adobe has become difficult to work with since it maintains such plug-in market dominance? Or is it that Adobe is limiting its DRM solutions only to people willing to buy into its more expensive and limited server products? Is it possible that it's easier to use a Microsoft product to release a Web-based service to multiple platforms and browsers?

My guess: Netflix is hoping that Microsoft can help them bridge the chasm between computer and living room. Their survival depends on being where people watch movies, and Netflix thinks that Xbox support (that they are planning) is the easiest way finally get into people's living rooms (internet enabled Silverlight support is planned on the next generation of XBoxes).

Regardless, I think that this loss is more severe that Adobe cares to admit.

More info:
The Netflix Blog

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