On2 Technologies Receives Patent for Video Encoding Methods

Technique Improves Video Compression and Encoding Methods in On2 VP7, VP8

CLIFTON PARK, NY -- March 31, 2009 -- On2 Technologies (NYSE Amex: ONT), a leader in video compression solutions, announced today that it has been granted patent number 7,499,492 for methods that increase the compressibility of digital video segments through better intraframe prediction.

The methods in the patent were originally developed for use in On2's VP7 and VP8 encoders, but may be integrated into any image or video compression algorithm that involves intraframe predictive encoding.

One of the technologies described in the patent uses medium- to long-distance first order prediction as an alternative to directly copying the predicted pixels from pixels immediately above and/or to the left of the predicted block. In one application, a rate and direction of change or slope is calculated using pixels to the left, above and above-left of the pixel to be predicted; this slope is then used to predict the current pixel's intensity. The technique works well for blocks involving consistent gradation in pixel intensities. The mode is the second most frequently chosen by the encoder in an RD sense on intra frames after a mode approximates a DC coefficient prediction.

"This patent represents one of the many advances that differentiate our codecs from others," said Yaowu Xu, Vice President of Codec Development at On2 Technologies. "Our new technology provides a substantial boost to our video encoding on keyframes and new image data that can account for upwards of five percent quality gain."

The full text of the patent can be viewed online by visiting http://patft.uspto.gov and searching for patent #7499492.

About On2 Technologies

On2 (NYSE Amex: ONT) creates advanced video compression technologies that power the video in today's leading desktop and mobile applications and devices. On2 customers include Adobe, Skype, Nokia, Infineon, Sun Microsystems, Mediatek, Sony, Brightcove, and Move Networks. On2 Technologies is headquartered in Clifton Park, NY USA. For more information visit www.on2.com.