[brentr]

Please spare me the RTFM comments; I am sick and not feeling well enough tonight to dig into some huge research project. I simply would like to know how a company like Youtube functions. Do they have to pay for the right to use their video software or is the software currently available for anyone?

[RyanGWU82]

There is open-source software (mencoder) which will convert videos into formats playable by the Flash Player. However, all such formats are encumbered by patents with expensive licensing fees.

Either YouTube uses these formats without a license, or they pay up. They may use commercial encoding software which includes a license, or they may use an open-source encoder and pay for the license separately. YouTube is a big target for a patent infringement lawsuit, so I'd guess they do pay up.

[scw]

They embed their movies using the Flash Video format (http://en.wikipedia.org/wiki/Flash_Video) which is a container format for multiple audio and video codecs. These are licensed by Adobe, and indirectly to purchasers of their software. Because these codecs are bundled with Flash, to get iPhone support, all the videos had to be transcoded into Quicktime-friendly formats.

Generally, there are licensing fees for each codec (e.g. H.264) which are licensed by software companies for use within their products. The open source implementations of such codecs are in a legal grey area, as technically compiling them means you should pay for their licensing.

[GHFigs]

A clarification: H.264 videos on YouTube don't use FLV containers. Flash 9 and up supports H.264 in MP4 containers natively. The iPhone app simply streams these directly.

[shutter]

YouTube uses a Flash embed to stream videos from their servers. It's their own proprietary player SWF, but anyone could theoretically create something similar. Flash (the software) contains built-in templates for such a thing.

But this requires the Flash plugin, hence the desire for a <video> element and such (as we'll see in HTML5).