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Doesn't Flash webcam video or streaming require proprietery Flash streaming servers that are quite costly? Not to mention probably no longer (actively) supported.

It's doing the same thing, but in a very different way. Flash video uses ancient, terrible codes; requires proprietary Adobe servers (although there's been some good work on this from Wowza, Red5, et al); doesn't use open protocols like SIP.

What will change? Maybe nothing, but it's definitely interesting work. One could, for instance, use this as the endpoint of a SIP PBX without serious effort, which is not the case for a Flash endpoint.

What will change? Before was Flash, now is HTML5?

More like non-standardized parts which currently are working drafts only.

But seeing how just saying "this is standard HTML, really!" again and again and again worked for the What WG, I guess there is nothing wrong in browser-vendors attempting to do the same to get their proprietary extensions embedded into the standard as well. At least it's not much worse.

All is good in browser-wars and love, etc.