On2 Technologies Unveils New Advanced Video Compression Format

On2 video delivers over 50% bandwidth savings compared to leading H.264   implementations

September 15, 2008 -- AMSTERDAM, Netherlands, and CLIFTON PARK, N.Y. -- On2 Technologies, Inc. (Amex: ONT), a leader in video compression solutions, announced today the launch of its latest video compression format, On2 VP8. This eighth generation of On2 video is the perfect solution for web TV, IPTV and video conferencing companies looking to differentiate their product and service offerings by delivering higher quality video using less data and requiring less system resource for playback.

Need for a More Efficient Video Compression Format is Clear
Downloading and streaming HD movies and TV shows has become commonplace, and with affordable HD web cams, we will see rapid growth in high-resolution user-generated content as well as the wide-scale adoption of high quality video communication solutions .

Even with faster transport technologies on the way, the cost and availability of bandwidth will remain a stubborn obstacle to containing costs as video services use more bandwidth than any other IP application. According to a recent white paper published by Cisco, annual IP traffic will exceed half a zettabyte by 2012, with video accounting for close to 90% of all consumer traffic. Internet video alone is expected to generate 10 exabytes of data per month in 2012.

“Next generation video must transcend platforms while remaining fast and affordable," said Eero Kaikkonen, Chief Marketing Officer at On2. "We design On2 video formats to achieve those goals. On2 VP8 achieves significant improvements over leading standards-based implementations and is less compute-intensive to encode and play back. Furthermore, we have used our years of experience developing embedded video IP to ensure the design is entirely suited for optimization to current and future desktop and mobile processor cores."

Over 40 Groundbreaking Innovations
On2 VP8 surpasses the compression efficiency and performance of every other video format on the market by employing over 40 technical innovations, among them:

• Advanced prediction through constructed reference frames
  
• Macroblock row level threading
  
• Improved small area referential encoding
  
• Advanced contextual entropy coding without the added complexity of bit level adaptability
  
• Sparse targeted adaptive loop filtering
  

“With On2 VP8, we set out to increase compression performance over On2 VP7 and leading H.264 implementations by 20% while reducing playback complexity by 40%,”" said Paul Wilkins, Chief Technology Officer at On2. "“In the end we exceeded these goals and even back-ported some of what we learned to our On2 VP6® for Adobe® Flash® encoders.”

On2 VP8 Surpasses H.264, VC-1, Real Video in Quality and Performance
With the introduction of On2 VP8, On2 Video now dramatically surpasses the compression performance of all other commercially available formats. For example, leading H.264 implementations require as much as twice the data to deliver the same quality video as On2 VP8 (as measured in objective peak signal to noise ratio (PSNR) testing).

In addition, the On2 VP8 bitstream requires fewer processing cycles to decode, so users do not need to have the latest and greatest PC or mobile device to enjoy On2 VP8 video quality.

“Through our relationship with On2 over the years, Move Networks has enabled viewers to realize the highest quality Internet television experience possible. We look forward to On2’s continued innovations," said John Edwards, CEO of Move Networks.

Future-Proofed for Multicore
Multicore processing is one of the most significant developments in computer technology. On2 VP8 is designed to take full advantage of multi-core systems and can efficiently use up to 64 processor cores simultaneously.

“As new multi core processors come to market, On2 Video will be able to make maximum use of the additional computing power available,” said Wilkins “Our innovative encoder can seamlessly use additional cores to either increase compression speed or to improve compression quality in real-time applications.”

Designed with Mobile in Mind
On2 has worked closely with ARM to ensure suitability for porting to current and future ARM single and multi-core processors in mobile devices.

“We have been working with On2 to ensure that their compression schemes work as optimally as possible with our NEON™ 64/128-bit SIMD technology which enables high definition video in software. NEON technology is a key feature in our current Cortex™-A8 and Cortex-A9 MPCore™ processors and will be included in all future ARM application processors,” said Laurence Bryant, Mobile Segment Marketing Manager, ARM. “The high compression performance of this latest generation of On2 Video suggests that it will be ideal for wireless internet applications where available data bandwidth is a premium, and complements our recent work with Adobe on the Open Screen Project to drive consistent internet experiences across multiple screens, including TVs, PCs, mobile devices and consumer electronics."

"JavaFX enables content authors and developers to quickly and easily deliver high-impact, rich internet applications across mobile phones, desktops, TVs and other consumer devices,” said Param Singh, senior director of JavaFX marketing at Sun Microsystems. "JavaFX leverages the best capabilities of the existing Java platform along with new immersive media capabilities and we are pleased to be working with On2, a world leader in video compression technology. The combination of On2 video and JavaFX will provide the high-fidelity video capabilities to supercharge the consumer experience across the billions of devices around the world that are powered by Java technology."

Company Remains Committed to Existing Formats
On2’s VP6 format became the de facto standard for web video following its integration in Adobe Flash Player in 2005. On2 expects VP8 to complement its existing formats and, in particular, is fully committed to continuing the development of VP6 to further improve encoding and playback performance.

“We are serving different needs with On2 VP6 and VP8,” said Kaikkonen. “On2 VP6 offers distinct advantages for web video as the Adobe Flash Player is installed on nearly every desktop in the world. It offers comparable quality to H.264 with the added value of supporting cue points and alpha channel masking, allowing developers to quickly and easily create more interactive and complete web video experiences with minimal investment. On2 VP8 will be our flagship format and enable companies developing client-side playback capability to deliver a supreme video-over-IP solution.”

Simple, Flexible Licensing
On2 video is proprietary to On2 Technologies and is available with patent-pool free licensing, avoiding the burdensome royalties associated with standards based formats.