Mozilla gave the money to the WikiMedia Foundation, which is currently working on two video codecs, Theora.org and Vorbis, as well as a data-storage format called Ogg. Mozilla plans to build support for all three into the Firefox web browser.
Currently, the two most popular video codecs are the familiar MPEG and WMV, but Mozilla and other open-source advocates criticize those formats for being too centralized and too expensive.
Tech analyst Ryan Paul said that because most streaming video plugins are proprietary, the control over video delivery mostly falls into the hands of big companies like Adobe.
"Although alternatives such as Microsoft's Silverlight are beginning to change the game and force Adobe to open up, there still isn't a viable, vendor-neutral, standards-based alternative that can shift the balance of power over to end-users and tear down some of the walls that limit how video content is experienced on the Web," he wrote for ArsTechnica.com.
Self-professed open-source "evangelist" Christopher Blizzard has argued that the lack of an open-source video codecs, as well as the servers needed to run them, has led to the creeping dread of censorship — and he specifically cited YouTube.
"Although videos are available on the web via sites like YouTube, they don’t share the same democratized characteristics that have made the web vibrant and distributed," he said. "And it shows. That centralization has created some interesting problems that have symptoms like censorship via abuse of the DMCA and an overly concentrated audience on a few sites that have the resources and technology to host video. I believe that problems like the ones we see with YouTube are a symptom of the larger problem of the lack of decentralization and competition in video technology — very different than where the rest of the web is today."
What would the adoption of this open-source technology mean for the Internet, and by association, the adult industry?
A lot. Webmasters and producers would have many more options for delivering video content. For example, if a webmaster had been using a Windows Media server to stream all of their videos in WMV, that webmaster could then switch over to an open-source video codec and run it through a Linux-powered server. The webmaster wouldn't have to pay Microsoft a cent.
Online guru Brandon "Fight The Patent" said this wouldn't make Microsoft very happy.
"They've seen Firefox chip away their market share on browsers, and right now with Windows Media Server, they have a lot of usage, which means they make money off of licensing Windows servers," he told XBIZ. "If open-source video works as good or better, than many would ditch their Windows servers to use the Linux servers."
SugarDVD CEO Jax Smith said that open-source video delivery would, among other things, save his company's VOD service a lot of money. Currently, they have to store an entire movie file for every different video codec, but if Mozilla's plan comes to fruition, they might be able to dump all (or at least some) of their proprietary servers.
It's also worth noting that Mozilla's pledge to build support for these open-source solutions directly into Firefox removes one obvious barrier to new open-source codecs: downloading. Smith said that Mozilla's support for these new formats makes them a tantalizing possibility for the future.
"I only see FireFox usage increasing over time," he said, citing statistics that show Firefox with more than 20 percent of the browser market.
So what's the downside?
Microsoft still commands a dominant share of the web browser marketplace, and these new codecs remain untested.
"Although I suspect the Theora video codec is inferior to other technologies, as long as it can improve over time, it could eventually become a serious contender," tech analyst Erick Schonfeld wrote for TechCrunch.com. Brandon "Fight The Patent" noted that in order for these new codecs to be competitive, they would need to deliver high quality comparable to several different formats, including WMV, Divx and MPEG4.
In addition, SugarDVD's Smith said that it would be "pretty ambitious" to think that only one or two video formats could take over for the entire Internet.
It's also possible that Mozilla bet on the wrong horse. Tech analyst Dana Blankenhorn said she doesn't see the Flash, WMV, MP3 or any other popular formats going away.
"If Microsoft decides to make Flash support integral to IE8, video producers are unlikely to switch to Theora," she wrote for ZDNet.com. "That won’t just box in users and producers, but Firefox as well. And what will Google do?"