It has only been a few minutes since the news of Google removing support for the H.264 video codec from Chrome in favour of WebM, a codec that Google open-sourced after their acquisition of On2, has been making the rounds. Is this significant? I guess it depends who you ask, but Chrome is certainly a browser that's quickly gaining traction, and rightly so.
I personally have seen very few videos in H.264 on the web that were *not* played back in Flash. Since Flash (as well as other plugins) will of course still be supported in Chrome there is always that option (with the notable exception of Apple's iDevices of course since none of those support Flash or indeed other browser plugins).
Adobe have already publicly committed to supporting WebM in Flash, and joined Google alongside many other companies on the WebM project. A notable exception on that list is of course Apple, an avid supporter of H.264. But it remains to be seen if Google's decision has any real implications in the short term. Things would look differently if YouTube was to stop encoding videos to H.264 and 'force' anyone wanting to play back new videos using a platform or browser that supports WebM.
Another party not to be pleased is undoubtedly MPEG-LA, the organisation responsible for setting and collecting licensing fees for H.264. Let's not forget: despite what Apple would like you to believe, H.264 is neither open nor free, and many companies including Adobe pay huge sums (millions I assume) to MPEG-LA in order to be able to add the H.264 decoder to Flash Player and other tools. And as John Dowdell confirmed, "when I've asked, I've heard 'millions' quoted for redistribution licensing as well." No small change then.
What does this mean for Flash? It could solidify its position as the safe bet for video playback on the web. There is little chance of Adobe removing support for H.264, and they are definitely adding WebM.
In the long run I'm not sure if Flash will remain the primary choice for video playback on the web. But as long as the rest of the landscape is in such a mess I cannot see it going away anytime soon. My prediction is that we will still see a lot of Flash based video being deployed in 10 years from now.