Exclusive: Google+ Hangouts goes HD as it switches from H.264 to VP8. Next up, WebRTC.
Noticed any differences when using Google's Hangouts video chat lately? If you did, then you may be one of the lucky users who has already received an upgrade to 720p HD video.
Context & Ripple Effects
Hangouts has been steadily accumulating capabilities inside Google+: back in December 2011 Google let users conference people into Hangouts with free voice calls, extending the group-video feature beyond casual chats. The upgrade reported by GigaOM moves the underlying plumbing: Hangouts now serves eligible users 720p HD video, and the transport has switched from H.264 to Google's royalty-free VP8 codec.
The codec swap matters beyond picture quality because VP8 is also the foundation of WebRTC, the browser-based real-time communications standard Google says will come to Hangouts next. The story traveled unusually widely for a codec change — TechCrunch, Ars Technica, Engadget, Digital Trends, The Next Web, 9to5Google and others all picked up the same-day reporting — reflecting how closely the industry was watching the open-vs-licensed codec question.
First-order effects
- Eligible Hangouts users get sharper 720p video immediately, with no client reinstall required since the change rides Google's server-side rollout.
- Google drops its exposure to H.264 patent-licensing fees on Hangouts traffic by moving to royalty-free VP8, a cost structure shift that scales with every minute of video.
Second-order effects
- Rivals running licensed codecs — Skype's H.264-based stack among them — face a competitor that can price video chat at zero marginal codec cost while marketing HD quality.
- Codec licensors' leverage weakens if the largest consumer video-chat operator demonstrates that royalty-free VP8 delivers HD at scale, pressuring per-deployment licensing economics across conferencing products.
Third-order effects
- If Hangouts completes its move to WebRTC, plugin-free browser-to-browser video becomes a mainstream default rather than a demo, pushing the W3C/IETF standardization fight over VP8 versus H.264 toward resolution in VP8's favor.
- Video conferencing drifts from a product you install toward a capability embedded in the browser and the social graph — the structural position Google has been assembling since the 2011 voice-conferencing additions.
The trend: Real-time video is migrating from proprietary, license-encumbered codecs to open standards like VP8 and WebRTC, with consumer-scale operators forcing the transition.