Google's H.264 decision: It's all about YouTube costs

Google's H.264 decision: It's all about YouTube costs

Summary: Everyone wants to boil down Google's decision to remove H.264 support from Chrome as a religious choice. To me, it's obviously infrastructure-related.


Everyone wants to boil down Google's decision to remove H.264 support from Chrome to be a religious one. To me, it's obviously infrastructure-related.

Ah, the smell of religious fervor in the morning. Do you smell it? That flame-war smell. It smells like... FORMAT WARS!

Google announced on its Chromium Blog on Tuesday that over the next few months, development builds of the Chrome browser would no longer support the H.264 video codec which is used in a wide variety of embedded video formats used on web sites all over the Internet.

Instead, Google will put its support behind the WebM (VP8) and Ogg Theora codecs, which are Open Source alternatives to H.264/MPEG-4, which is licensed by MPEG LA, LLC.

Now, I'm not going to get into the depth of the religious discussion of why Google decided to embrace one format over the other, especially since the licensing fees we are talking about are a drop in the bucket if you compare it to Google's overall annual revenue.

To me, this is not a format religion issue. Nor is it a licensing costs issue. And it's got very little to do with Chrome or a platform play. In my opinion, this is all about infrastructure costs.

Infrastructure build-out and optimization strategy is something I know a great deal about. It's what I do as my day job as an Infrastructure Architect at IBM -- understanding what our customers need to do in order to minimize their infrastructure overhead in terms of systems, storage, networking and facilities as they plan for further growth.

Google is a giant company which makes an awful lot of money. But that doesn't mean they are immune from infrastructure planning. If anything, it's got to be the number one item they look at on their balance sheet in terms of overall spending.

In Google's last form 10-Q that was filed with the United States Securities and Exchange Commission, which they posted on September 30th of 2010, the company doesn't outline in detail what the company actually spends in terms of line item detail on infrastructure.

But if you read between the lines, on page 26 of that report, under "Trends in Our Business" the impact of infrastructure cost and the cost of traffic acquisition on the company is crystal clear:

We continue to invest in systems infrastructures, increase our hiring, and adjust our compensation programs as required to manage our growth and develop and promote our products and services, and this may cause our operating margins to decrease. Acquisitions will also remain an important component of our strategy and use of capital, and we expect our current pace of acquisitions to continue. Our full-time employee headcount was 19,665 at September 30, 2009 and 23,331 at September 30, 2010. We expect our cost of revenues will increase in dollars and may increase as a percentage of revenues in future periods, primarily as a result of forecasted increases in traffic acquisition costs, data center costs, credit card and other transaction fees, content acquisition costs, and other costs. In particular, traffic acquisition costs as a percentage of advertising revenues may increase in the future if we are unable to continue to improve the monetization or generation of revenues from traffic on our websites and our Google Network members’ websites.

Now, what's one of the biggest cost centers at Google in terms of infrastructure? Next to the search business, it's YouTube.

The movement away from H.264 and to open formats such as VP8 and Theora is simply a canary in a coal mine.

The religious decision about what format they eventually chose is a red herring, a side discussion that simply detracts from the real issue -- It's all about Google coming to the conclusion that supporting all kinds of video formats at YouTube requires a large amount of infrastructure, which costs a great deal of money.

My guess is that the decision to eliminate H.264 not only applies to the Chrome browser for the PC, the Mac and Android Devices, but to also to the actual encoding of content stored in YouTube's Storage Area Networks (SANs).

Over the last few years, YouTube has utterly exploded in terms the size of their stored content, if not for the 800,000 funny cat videos alone.

In 2008, YouTube also began to support HD video, which dramatically increases the amount of infrastructure required. If you have to support content in different formats and in different resolutions, you're gonna need a much bigger boat.

I'm guessing that in capacity planning for the next several years of YouTube infrastructure expansion, the IT people at Google made a rough order of magnitude calculation for what they would need through 2013 and said "Holy Crap!".

Considering that YouTube probably accounts for most of the Web's streaming video traffic next to Netflix, I can understand why Google made the choice to rationalize its format support, starting with Chrome.

Eventually, in order to consolidate their infrastructure overhead, Google will need to transcode the entire YouTube library into a smaller subset of formats, and since they have to go through the painful effort of doing this anyway, they might as well do it with open formats that they control in which they are beholden to no-one.

A list of supported video formats on YouTube (Source: Wikipedia)

The less formats that they need to support, the less that they need to build out in terms of datacenters and storage. With YouTube, we're talking about exabytes upon exabytes of storage. Hundreds of millions of dollars or even billions worth of SAN hardware and facilities to house it.

So from the perspective of a secondary content provider and as developers of browser software, such as Apple and their Mobile Safari which runs on iOS, you can either continue to embrace H.264, or your can go with what YouTube uses.

My guess is that in addition to Android licensees, Apple and other device manufacturers which use embedded browsers such as RIM are not going to deny their customers and end-users embedded YouTube video support if Google chooses to encode to to a VP8/Theora standard, and I would expect the same of Microsoft and Internet Explorer and its embedded variations as well. Mozilla and Firefox we already know is completely on-board.

Is Google's H.264 to VP8/Theora transition motivated by religion, or about the real business of building out infrastructure to support YouTube? Talk Back and Let Me Know.

Disclaimer: The postings and opinions on this blog are my own and don’t necessarily represent IBM’s positions, strategies or opinions.

Topics: Data Centers, Browser, Google, Social Enterprise


Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer.

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  • RE: Google's H.264 decision: It's all about YouTube costs

    That argument makes a whole lot of sense. Real business sense. The costs of warehousing all of that YouTube data have got to be astronomical. And, I would bet that the cheaper way is better, and they can continue to improve the codec and make minute changes to the code to upgrade indefinitely.
    • Google did not drop H.264 in YouTube, so costs argument is ***irrelevant***

      @hoaxoner: it costs only as much as like $6 million for Google to keep H.264 in Chrome.
      <br><br>Flash provides top-on-video advertisment delivery, while <b>HTML5' "video" tag does not yet support standardly layering, so Google sabotages it with this move. They did not even care to recode YouTube videos to WebM (only some videos are encoded), because they actually more interested in viewers keeping using Flash.</b>
      • Not yet, Jason is just guessing this is the first step to marginalize H.264

        so that they can drop it in YouTube. Stay tuned. In any case, it is a big game of chicken. Fun to watch.
      • RE: Google's H.264 decision: It's all about YouTube costs


        did not drop H.264 *yet*

        these things don't happen overnight, and to make the transition smooth, they won't even happen over a few months

        besides that, do you have any idea how much raw time it will take to transcode the total content of youtube?

        my main question is why they do not have it in a single stored format already and transcode on the fly with a small app that is embedded in the viewing page. that would allow youtube to store in a single format, and let the client machine handle the CPU overhead to transcode the individual stream being viewed, if transcoding is needed
    • Not that clear to me

      Google reducing supported codecs to reduce storage costs [makes] sense. What's confusing is its choice for video.<br><br>Not used by anyone, no hardware acceleration support and likely to be just as patent encumbered as H.264 without the easy, non-discrimatory licensing option.<br><br>Something must be going on behind the scenes, but what?
      Richard Flude
      • It sure is a big game of chicken. Maybe Google is trying to force them to

        be more reasonable with the licencing terms of H.264. Maybe they are just trying to get publicity about Chrome, ChromeOS, at the same time, making the others look like the bad guys. Well, the whole H.264 thing is a bunch of dirty dealing.
      • RE: Google's H.264 decision: It's all about YouTube costs

        Youtube costs; really?

        H264 is native on iPhone, Mac and Windows & Adobe Flash isnt.

        WebM is requires more bandwidth (equals more $$$'s) for any given quality of video (although audio performance is better and negates a small amount of this).

        Never before have I seen a leading vendor remove a very popular and leading feature and then continue to gain market share..

        However lets not get ahead of ourselves; Google are only talking about video played directly within the browser. YouTube predominantly uses Flash still because as another poster mentioned; adverts over the top of the video. This change has nothing to do with users desire, best technology or anything else. It may not even affect Google Chrome, it may only affect Chromium, the opensource version of the product on which Chrome is based; Google could very well add H264 back into its officially released very, much like openoffice is the basis of staroffice (on which Orace nee Sun added extra features in before release).
    • RE: Google's H.264 decision: It's all about YouTube costs

      @hoaxoner - I agree with Jason ... in part. I agree that rationalizing the formats of the encoded video content to fewer formats may save Google considerable storage and infrastructure, but that'd have been the same had they decided to standardize around H.264.<br><br>The thing that caught my eye this morning was their statement about H.264 being free for free content (at least for now).<br><br>Perhaps Google is planning on turning YouTube into a partially/fully commercial service to help fund the growing costs of their infrastructure, storage and services. Or perhaps they're looking at purchasing other commercial video content storage/encoding/distribution companies ... Hulu for example.<br><br>Either way, if they start charging for uploading and/or downloading video content they'll suddenly be liable for considerable fees if they encode to H.264.<br><br>Chosing VP8/Theora will (potentially) save them from these costs.<br><br>Potentially, because VP8/Theora are not immune to patent suits.
      • Seems reasonable

        Encoding fees for Google for commercial distribution could be significant. But aren't these capped as well?
        Richard Flude
      • RE: Google's H.264 decision: It's all about YouTube costs

        @bitcrazed With all the garbage on YouTube, is it really worth paying for it? I think not. The day YouTube is not free, it will be the day that it dies.
      • Sure, that makes some sense


        But then why does their browser have to have h.264 support pulled? They can use whatever they want for Youtube and it doesn't matter what they support in their browser. Support WebM AND h.264 in the browser but make Youtube WebM. Removing options for other sites, especially the option that is widely used and available on almost all systems in hardware, is stupid.
    • RE: Google's H.264 decision: It's all about YouTube costs

      It's about google fighting for user's freedom using OSS.
      MPEG 4 can't die fast enough!
      Linux Geek
      • flash can't die fast enough

        All the major players will jump for joy when flash movies are gone
        sparkle farkle
      • Freedom? OSS? Get real man..

        @Linux Geek, we know you are just someone playing a joke, probably one of kiki's characters, but there is nothing free that comes from Google.
        Android, for example, is not free. Sure, you can download some "stock" version of android.
        But YOU can't download the version that handset makers get. The deals made there include a more robust enhanced Android, for paying customers only, and Google has told reporters that the deals they have with handset makers and carriers is "private" and "confidential". Yeah, they are an open company fighting for you.....and I have a bridge I want to sell you.
        youTube is quickly turning into what the web was NEVER supposed to network Television....where you have to sit through an AD to watch any video. YOu call that freedom?
      • &lt;i&gt;

      • RE: Google's H.264 decision: It's all about YouTube costs

        @Linux Geek - If this truly were about freedom, then why do they continue to support other non-free formats like aac, mp3, jpeg, and gif. This seems disengenious at best. I think the freedom excuse is hiding something else.
      • RE: Google's H.264 decision: It's all about YouTube costs

        @Linux Geek Really? It's about freedom and openness? Your view of freedom seems a little weird to me. In Chrome google is LIMITING the choice to ONE codec. In IE Microsoft is allowing any codec on the users computer.

        Please elaborate on how LIMITING choice to ONE proprietary, company-owned codec is openness while allowing any codec, and supporting the ONLY open standard for video that can deliver high quality content at a reasonable bandwidth (H.264 is open and standard, WebM is closed and proprietary) is being closed.

        How does it make the world more open when we limit choice?

        This is, as usual with Google, only Google trying to become leaders of the world. They should fail. Miserably.
      • RE: Google's H.264 decision: It's all about YouTube costs

        <h4>@Linux Geek</h4><p>I am a Linux geek myself, and I have to disagree (mostly). As others here have said, Freedom of choice is about having more and more options.</p><p>That said, this is only related to Chromium right now... It could be, that they are simply worried about patent violations since H.264 IS patented.</p><h4>@terjeb</h4><p>Seriously? WebM used to be proprietary, and Google opened it and released all patents. WebM is patent free and open source. H.264 has open source encoders (like x.264), but if you make money off a video encoded with H.264, you owe the patent holders MONEY. I'm starting out in the 3D animation business, and if I made a 3D animated short to show off my talent, and had people pay for the HD H.264 encoded file, I'd owe MPEG-LA money. If I encoded it with WebM/Ogg Theora, I'd not owe anyone anything.</p>
  • If it is, it's a poor decision.

    People will go elsewhere for their video when it doesn't play in their browser. Why would I use Youtube if it won't play on my iOS device, Bob's Windows computer, Bill's Mac, and Johns Droid?

    I'll just put the video up on vimeo or some other site that is accessible to those devices.
    • But, if they want to view the large catalog of videos on YouTube, end users

      are not religious, they will just download the codec. Who cares what the Windows weeeenies do???? There are not enough to matter.