On2 Previews VP5

Last week, On2 Technologies (www.on2.com) unveiled the alpha version of its VP5 audio/video codec, targeted primarily to the set-top box (STB) market.

According to Douglas McIntyre, CEO of On2, VP5 delivers the same quality as MPEG-2 but at a data rate between 500 and 600Kbps. McIntyre said that this is roughly a 50 percent improvement over the company’s existing VP4 codec.

When asked where VP5 fits into the current codec landscape, Ed Gillespie, VP of corporate communications at On2 said he sees it being employed "from 3G to low bit-rate DSL to multiple megabit files. It can be used in closed area networks, Internet and satellite. As of now, VOD initiatives are driving its adoption."

"Streaming Not Profitable"

Still, McIntyre seemed cautious about the still burgeoning streaming industry. "Streaming over the Internet to PCs is never going to be a profitable business," said McIntyre while admitting that the adult entertainment business and distance learning do enjoy some good margins.

McIntyre said that VP5 beats its competition. "[VP5 is] more efficient than H.26L and delivers higher quality at lower bit rates than MPEG-2, MPEG-4, Real 8, Windows Media 8, Apple QuickTime 5 or DIVX. This codec will significantly alter the landscape of video streaming and downloading. It will also increase the number of businesses and homes that can get full-screen, full-frame rate, TV-quality video. In a nutshell, VP5 gives you DVD picture quality at lower data rates, saving streaming/bandwidth costs, which increases clients’ margins," said McIntyre.

Those are big claims, but so far no earth-shattering landscape change has happened with the company’s VP4 codec. As of this writing, VP4 has been licensed by companies like RealNetworks, Equator Technologies, Texas Instruments, and Picosoft out of Korea. Still, On2 is not a very widely used codec.

Where Will VP4 Go?

McIntyre said the company hasn’t made a final decision on what it will do with its current VP4 codec. He said On2 is still actively selling VP4 right now, but after "two or three quarters it will be phased out as our flagship product." Will it open source VP4, like it did with VP3? McIntyre said the answer is no, adding that VP4 still retains a great deal of value for On2.

For other applications, like set-top boxes, McIntyre adds, "We will continue to license VP5 much the same way we’ve treated VP4. For low bit-rate VOD deployments, we feel VP5 is the optimal choice. Depending on what you’re looking to do, our competitors would include, but not be limited to, the likes of the MPEG group, H26L, DivX, Microsoft, Sorenson. And with the recent announcement surrounding MPEG-4’s licensing fees, VP5 should have even more opportunities."

Trying Out VP5

The public preview of VP5 is available now at On2.com’s web site. Final code should be available for licensing in the middle of June and costs are dependent on a variety of factors, such as usage, engineering required, deployment, etc.

"People are going to be able to see VP5 from our site," said McIntyre. "We’ll promote our advances, but ultimately, believe people will want to make their own discoveries. We invite users to look at stuff on our site, then compare to stuff encoded for other sites, such as espn.com or Hollywood.com – we feel the difference in video is measurable. And although it can be subjective, we will use some industry standard tests when applicable."

He said that in tests across a broad spectrum of data rates, VP5 has achieved similar quality to its competitors at less than half the data rate (for this, we went to the aforementioned sites and saw how low we could drive the data rate and achieve similar picture quality). The VP5 codec also compresses material while using significantly less processor power (3 to 6 times less) and delivering 30 frames per second vs. about 6 fps than H.26L, a potential MPEG-4 standard.

Upcoming Codecs

With all the improvements in codecs in that last few months, some are wondering whether codecs have reached their theoretical limit. After all, RealNetworks hasn’t unveiled a new codec since Real 8 in 2000.

Microsoft, meanwhile, is set to unveil its updated codec in its new streaming system, called Corona, in a few months. During Streaming Media East in December, Microsoft demonstrated its codec that was a 20 percent improvement from its current codecs, with support for 720 x 1280 video and surround sound audio.

McIntyre, though, is optimistic about the VP line. "I don’t think we’ve reached the end of the road by a long shot," he said. "We have quite a list of further enhancements our engineers are working on. I can say almost certainly that someday there will be a VP6, VP7, etc."