

On2 shareholders approve Google merger - DarkShikari
http://www.timesunion.com/AspStories/story.asp?storyID=901822

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DarkShikari
<http://forum.doom9.org/showthread.php?p=1375034#post1375034>

Seems (according to one, at least) many shareholders were against the merger,
but the corporate leadership managed to push it through.

~~~
wmf
Considering Flash's migration from VP6 to H.264, the glut of codecs on the
market, and the fact that VP8 is neither open nor standard, Google's $100M+
offer seems quite generous.

~~~
DarkShikari
I completely agree--at least from my perspective, On2 is completely worthless
except for their patents. I find this purchase particularly interesting as
Google is often noted for buying companies solely for their employees.

1\. They're currently in the red.

2\. VP6, their only successful product in recent years, is obsolete.

3\. Neither VP7 nor VP8 is competitive with the best H.264 encoders, nor do
they have the clout to get hardware implementations out there. They will serve
--at best--as niche formats, like Bink. VP7 got practically no adoption--the
only notable licensee I know of is Skype video chat. As VP8 is basically just
a faster, pared-down VP7, I doubt it will do much more for them.

Most importantly, proprietary video and audio formats are simply hard to pitch
nowadays. Nobody wants to use file formats that depend entirely on the
implementations and support of a single company; it's simply too risky. The
only proprietary format I can think of that still has wide adoption for
reasons other than legacy is Bink, due to the low licensing costs, good
reputation, top-quality tools, and cross-platform availability. And, of
course, the fact that games are usually release-once-and-forget products,
maybe with a few bugfix patches on the side.

(Note "professional" video and audio stuff is its own world, and has a huge
variety of almost-entirely-proprietary stuff, like ProRes, etc.)

4\. Their last code release, VP3, while quite outdated, is a great example of
utterly atrocious code, which doesn't say much for the quality of the rest of
their code, or the capability of their programmers.

I found the fact that their shareholders asked for _more_ utterly hilarious.

~~~
lambda
Well, it sounds like a lot of those shareholders bought shares back when VP6
was the only game in town for Flash, and Flash video popularity was
skyrocketing. They've already lost money, but since the knew that Google
really wanted to buy and has big coffers, held out for more to reduce their
losses.

Now, what's Google going to do with them? That's an excellent question. VP3
was adapted to create Ogg Theora. Google has committed pretty strongly to
supporting HTML5 and open standards for the HTML; they support both Ogg Theora
and H.264 in Chrome, and serve up H.264 on YouTube. There isn't, however, a
viable cross browser codec as Mozilla and Opera refuse to support H.264 and
Apple and Nokia refuse to support Ogg Theora (and Google won't host video in
Theora, as the video is too big at acceptable quality levels).

So, I'm wondering if Google is planning on making VP6, 7, or 8 an open
standard, freely licensed unlike H.264 so it could actually be viable cross
browser. It's still an uphill battle, as you don't have hardware support yet,
and need to convince the other browser vendors to go along, and it's a lot of
money to spend to just give away for free. On the other hand, Google really
does seem to believe in promoting open standards, and has been spending a lot
of money on free software supporting open standards, such as Chrome, and as
you point out, it's tough to make money on proprietary codecs by now, so I'm
really quite interested to see what happens here.

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thristian
> (and Google won't host video in Theora, as the video is too big at
> acceptable quality levels)

Chris DiBona of Google made that claim about Theora on the WHATWG mailing-
list, but it turns out that Theora can produce nicer video than H.264 at the
bitrates YouTube delivers:

<http://people.xiph.org/~greg/video/ytcompare/comparison.html>

Of course, it's quite possible that Theora is more _processor intensive_ than
H.264 for an equivalent bitrate, but in raw quality-per-byte Theora is
perfectly usable for YouTube-quality video.

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modeless
Sorry, no. Theora is better than H.26 _3_ , which YouTube currently uses for
compatibility with older Flash players. This does mean that Chris DiBona was
wrong, but Theora is still worse than H.26 _4_ (which YouTube uses for all but
the lowest quality clips).

<http://web.mit.edu/xiphmont/Public/theora/demo7.html>

Check out the last graph on the page. As they point out, PSNR isn't a 100%
unbiased way to compare codecs. However, the graph, made by the theora
developers themselves running the bleeding edge encoder on content of their
choosing, clearly shows that Theora requires 50% larger files to produce the
same PSNR as H.264.

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mambodog
Open-sourced/"open-patented"/Google-backed VP8 ready-to-be the-HTML5-video-
standard here we come?

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modeless
I sure hope so, because it's the only way past the current HTML5 video
impasse. Has anyone proposed any _other_ plausible reason why Google would buy
On2?

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ZeroGravitas
On2 also do video hardware chips for phones via a company called Hantro they
bought which fits into Google's Android plans, and they have a cloud encoding
platform though I'm guessing Youtube already does it better.

Hantro info: <http://www.on2.com/index.php?319>

On the other hand On2 announced the deal with _"Google and On2 to Improve
Video Quality on the Web"_ and Google's title was _"Innovation in video on the
web"_ and used phrases like:

 _"Today video is an essential part of the web experience, and we believe
high-quality video compression technology should be a part of the web
platform," said Sundar Pichai, Vice President, Product Management, Google. "We
are committed to innovation in video quality on the web, and we believe that
On2's team and technology will help us further that goal."_

[http://googleblog.blogspot.com/2009/08/innovation-in-
video-o...](http://googleblog.blogspot.com/2009/08/innovation-in-video-on-
web.html)

So draw your own conclusions but I think that's some fairly heavy hinting from
Google. Of course that was before MPEG-LA dropped charges that would have cost
Google about $25 million over the next 5 years and generally held back video
on the web so you could put it down to sabre-rattling.

edit: Also it's not the _only_ way past the current impasse. The MPEG patent
holders could release a patent-royalty-free subset. Not a total win for free
software folks, winning the battle like that could lose them the war but it
would perhaps suit Apple as it would probably match what they support in
iPhones anyway. Google and Apple apparently have already tried to broker a
deal and got rebuffed but maybe Google have more leverage now.

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sosuke
An interesting note, On2 provides one of the codecs that Flash supports for
video.

<http://en.wikipedia.org/wiki/Flash_Video#Codec_support>

~~~
wmf
Yes, I suspect basically all of On2's revenue was from people buying VP6
encoders for Flash video. And then Flash started supporting H.264...

~~~
DarkShikari
And even those customers were hardly satisfied.

Facebook used to use VP6 before they switched to x264--from what I recall
hearing in my time there, the On2 software was a disaster. Unreliable, slow,
and overpriced--$1500 per core per year!

From my experience, the primary reaction of many companies to the announcement
of Flash H.264 support was not "yay, we can save bandwidth with H.264", but
rather "oh god now we don't have to deal with VP6".

~~~
gommm
Oh I remember working with the On2 linux engine in my previous work..... After
using it for a while, we ended up moving back to ffmpeg/mencoder, much more
reliable...

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invisible
Anyone know of a way to find out how many shares total there are at On2 and
how many employees they have?

