Behind the online video encoding curtain of sites such as Brightcove or IFILM, lies a technology that makes online video sharing a reality. It's On2 Technologies video compression tools that make it all possible. Today, in a brief chat with On2's Bill Joll, CEO, we learned about the company's success and the future of video compression technologies. On the tail of the company's fourth quarter revenue report, Joll was happy to announce revenue was up 200% compared to the previous year. We have to assume this large success is due in part because of you. You, as in the new age of video producers who are using online video service providers to host and share your content, many of which that are licensing On2's VP6 and VP7 codec. Every day, there are more of you and there are more online video communities who need the ability to compress your video. That's where On2 Technologies has excelled this past year, including their business model that is following Adobe Flash wherever they go. In a competitive field of technologies, Joll tells us that the benefit of their VP6 and VP7 codec is that it's quality at lower bit rates (the type you'd find on video sharing sites) is significantly better than the typical H.264, MPEG4, and Windows Media codecs. Furthermore, their clients also save quite a bit in costs, as On2 Technologies license fees are limited to encoding process. This means that sites like Brightcove.com can find a business model that works not only for them, but the independent producers who want to use their service. As we see it, this technology is helping expand broadband video solutions. On the horizon for On2 Technologies is more development in the HD market. As HDTV sales increase, the need to deliver HD video through high-speed Internet connections will also increase. Pushing HD video to consumers at home will take significant leadership in compression technology. That's something we expect Joll and On2 Technologies to deliver. The big question is when?
