Open-source video backer seeks allies

Under an agreement between On2 and Xiph.org Foundation, a nonprofit that serves as a parent for open-source development efforts, developers will be able to use an early version of On2's compression codec, or mathematical formula, with the Ogg Vorbis framework. On2's VP3.2 compresses large video files into smaller ones so they can be sent over the Web, wireless devices, set-top boxes and electronic gaming devices.

The partnership is yet another push by On2 to persuade developers and standards groups to adopt its technology. Four months ago, the company proposed that the Internet Streaming Media Alliance consider its compression technology as a video standard. And last year, On2 released VP3.2 to the open-source community in an attempt to increase interest in and use of the codec.

But On2 is facing a powerful challenger in the standards arena: MPEG-4, a next-generation compression format for video and audio and the successor of technologies behind the MP3 audio explosion.

On2 has been taking swings at the technology, which has been at the center of a controversial licensing dispute. Licensing body MPEG LA has proposed requiring licensees to pay a per-minute streaming charge that adds up to 2 cents an hour for video clips delivered in the MPEG-4 format. On2, however, says MPEG LA may run afoul of antitrust laws.

Ross Rubin, president of New York-based Teletrope, a research and consulting firm, said MPEG LA is close to finalizing the licensing terms this summer, and the "window of opportunity for a competing codec is starting to narrow." He said On2's partnership with Xiph could unite the open-source technologies and bring more developers behind the respective standards.

But Rubin added that he doesn't believe the agreement is "enough of a step" in the right direction for On2.

"I don't think it will result in more momentum for On2," Rubin said. "They need to get distribution. That's their problem...It's one thing to just sort of have a good codec, but there needs to be critical mass of tools and servers and applications that support it before content developers can commit to it. That is what we're starting to see jell with MPEG-4 now."

Although the On2 has released updated versions of its technology, VP4 and VP5, the company said it decided not to make them open source because it relies on their licenses for revenue. But On2 CEO Douglas McIntyre said the company hopes to expand its open-source technology by tapping into the more than 300,000 developers and companies that have download Ogg Vorbis or VP3.2.

"One of the fascinating things about this (partnership) is the potentially vast number of developers who are going to be working on this multimedia solution to take it forward--not only get it adopted but also make it more useful," McIntyre said. "That's the beauty of open source. You now have a huge number of people who if they're interested can work on advancing the code base."