Duck Corp Part 2: On2 Technologies

 Around the late 90s, the Duck Corporation undergoes a rebranding to the On2 Corporation. The reasoning behind this is unknown, but that’s besides the point. With a new name, comes with a new focus. Around this time in history, internet streaming began to take off. People thought the idea of making your own videos, teleconfercing, etc.. was gaining traction. And the internet started to get faster as (A)DSL and cable systems started to adopt the idea of internet. 

One of their first moves was to drop the “truemotion” moniker from their codecs and just use the VP* scheme for their codecs, although they would still be refereed to both internally and many by the field as “truemotion” (Even i still like to call it truemotion). During this time, media was also starting to become more open., Gstreamer, and FFmpeg were all promising projects started around this time, showing that the demand for media that “just works” was growing. On2 gave in to this by gifting one of their codecs to to turn into an free and open codec, Theora. 

To strengthen their position in the video arena, they acquired many interesting companies, such as Eight Cylinder Studios, and started new interesting products, like ones that are similar to and zencoder. Of course, like many companies today, they had complex corporate structure, with shells in tax free heavens all over the place. They sold some of their stock/equity directly to other multimedia companies, like DVD Mags.  Even RealNetworks had some business relationships with On2. They also made sure their employees got paid, especially their executives. Not as much as other companies pay them, but On2 was a relatively small company. 

 One thing that is interesting is the “Investor’s Hub” forum on On2 Technologies. It seems to have started around the year 2003, around the time Miller left and the stock was back in the single digits (Remember the “How Duck Came To Be” video)? One of the first posts on there was wondering about if Miller took his patents with him when he left, and that On2 should consider giving away their codecs (you know what happened to that idea).

What is the difference between a OK sports team and a great sports team? The players. This period of time is also when they make key talent acquisitions, hiring some of the best programmers. Many of these people are still working on Duck codecs at google. Their skills were essential when it building and expanding the On2 codec platform.

After the whole xiph thing, they moved on to their next set of codecs, vp4. Vp4 was not that different from vp3. In NihAV the vp4 and vp3 codecs live in the same file. Vp4 seems to have a improved codebook process and better motion compensation/prediction.

VP5 and VP6 soon follow, mimicking and competing with the h263 standard. I may do another blog post with more technical information about these codecs. But they ended up giving away these codecs for free as well (for personal use). Vp6 was chosen to be included in the Flash player, which Mike Melanson worked on at the time (maybe that’s how he got into codecs?). They also made an audio codec, AVC, which in retrospect, was a terrible abbreviation (you know why). 

With great success comes all the controversy. Around the time of the VP5 and VP6 codecs On2 entered into a strategic partnership with Beijing E-World (Remember, On2 has always been very active in the Asian community - even during the Duck days they had a Japanese liaison) to provide for codecs in the Chinese DVD standard. In return, they demanded E-World pay On2 quarterly along with providing for porting efforts, of which they supposedly did neither. Once on2 complained, they paid some money, but not all.

Also, around this time Mike Melanson and Kostya  begin research into the On2 codecs for inclusion into FFmpeg (the history of that is for another time). This effort was assisted with by Mike Niedermayer, then and still current (yes, current - he never went anywhere) leader of the MPlayer and FFmpeg projects. Sometimes, they embraced their efforts, other times, they threatened the open source community with legal threats (that didn’t go anyway). Ultimately, the open source movement was helpful for on2 as it helped spread their codecs wide and far.

One of the last things On2 did under the On2 name is release the vp7 and vp8 codecs. It was very similar to the h264 codec, but with no b frames apparently? Vp8 is still very much relevant in webm I suppose.

Some of the final products they released was an mencoder plugin for their codecs (companies still do the same thing today with ffmpeg and gstreamer) along with language bindings, libraries, along with their own FFmpeg like program.

As they say, all good things must supposedly come to an end.  Open media was ramping up, FFmpeg and Gstreamer was gaining more popularity. Youtube and other platform were starting up, and the demand for free media was rising. Companies didn’t want to have to pay license fees anymore, and the threats from MPEG LA were becoming too much. On2 was doing OK, but there wasn’t much of a future for the company … until Google bought them up. The acquisition was met with some controversy, and claims with corruption, but that can be said about a lot of companies. What happens next is for part 3.


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