The Google blog, whilst trying to veil motivations, is still very clear. "With rapidly improving broadband and wireless speeds, more powerful smartphones, and higher resolution screens on devices of all shapes and sizes, it’s becoming easier than ever to watch video wherever you want, whenever you want. [...] Content creators and distributors are making huge strides in bringing us content in this way, but to do so, many require high-quality video and audio, secure delivery, and other content protection and video optimization technologies. With these tools in place they can easily and effectively give you access to the rich library of content you want to watch, with the immediacy you’ve come to expect."
DRM. The name Google dares not speak. Truth is that big content still reigns supreme and that includes current HDTV transmission, delivered over digital pipes, but separate from the Internet. Google are successful because they are largely technology agnostic; it matters not if you use iOS or Android, you still Google.
Google are attempting to break into the TV market with their Google TV product, delivered through parternships with Logitech and Sony. Google TV merges television and the Internet, but no sooner had Google TV launched big content baulked at the scary, new idea of an Internet TV. Hulu, ABC, NBC, CBS and more started blocking Google TV from viewing their video streams, stating that viewing the TV on your computer is not the same as using a PC, even if said PC is plugged into a TV. They want to be charge for the distinction. No, somehow, Google TV is not a PC. A PC with an Intel chip, running Linux, using a wireless keyboard is not a PC. This is how brain-dead big content is, and this is not going to go away any time soon.
Enter DRM, the comfort-blanket of the old bastions. Big content will not allow video to go transmitted without DRM and even all the hype around HTML5 video will not change this. The HTML5 spec does not specify a video codec that must be used, leaving this down to vendors. Now, Google paid $120M for On2 in order to open source the VP8 codec and put it to use in one of the largest video sites on the web: YouTube. Whilst WebM support is available on many videos, it is not present on videos that have adverts, or on paid content.
My prediction is this: Google will implement a DRM layer in the Chrome browser, Chrome OS, and Andriod. This will likely not be open source, but will not affect the open source availability of these projects since the binary that Google ships is never the same as the direct source builds which lack official branding. Open Source, but not open in nature. Because updates to Chrome and Chrome OS are silent and done every 24 hours, market penetration should be near instant to Google's rapidly growing user base. Chrome browser is making massive in-roads, almost mirroring the early rise of Firefox. I can quite easily see a day when it overtakes Firefox, especially with much, much greater embedded availability (TV, Android, Chrome OS etc.)
With DRM built in Google can easily court big content, get rid of these pesky content-blocks (that amount to nothing more than user-agent sniffing) and thus provide Internet-integrated content that their competitors like Firefox cannot.
This is not to say this is an entirely bad thing. DRM or not, Google can help coax big content providers to see the Internet as one all-encompassing thing, instead of individual devices that must all be licenced separately. For the majority this will mean they can view the content they want, anywhere they want and that simply won't ever happen without the content producer's hand being forced. IMO, it's up to open source to provide something better and more compelling if it doesn't want to be left out.