Adobe's Flash developers need to learn from Saudi Arabia
The biggest video problem open source developers need to solve isn't with video editing software, but with Internet video delivery, which is currently dominated by Adobe Flash. There are several good reasons why Flash is the most popular method of putting video on the Internet, but Macromedia (since purchased by Adobe) made a horrible decision when it released Flash 8. Its choice of a proprietary video compression codec makes a free replacement for Flash not only desirable, but necessary -- and I mean for business reasons, not just because of software ideology. If Adobe's management had done even a little cursory reading about the history of the oil business and OPEC, its Flash product line would not be heading for the ripe, green pickle that is inevitably going to hit it in the face within the next few years.
Flash 8 and 9 are superior to earlier versions. Video encoded to Flash 8/9 specs is noticeably clearer, and takes less bandwidth to deliver, than video encoded to specs for earlier Flash versions. This is because, as of version 8, Flash stopped using the H.263 video compression codec and started using the VP6 codec developed by On2 Technologies.
In August 2005, Flash developer Tinic Uro wrote a heavily-read blog post about why VP6 was chosen over the competing H.264 codec, which many people consider to be at least as good as VP6.