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On2, PERFECTV in VOD Technology Deal

Looking to maintain market momentum for video compression software, New York-based On2 Technologies on Wednesday announced a deal to integrate its newest VP6 codec into video-on-demand (VOD) systems built by PERFECTV.

On2, which already has lucrative licensing deals with America Online, Sony and Intel, said the partnership with PERFECTV would create systems that deliver high-quality VOD programming to consumer television sets.

North Carolina-based PERFECTV is a division of Gatelinx Corporation. The company uses network peering and firewall negotiation technologies to deliver video and live video conferencing a standard home broadband connection without the need for additional hardware configuration by the consumer.

By wrapping On2's VP6 codec, the company said its products would push VOD programming to television sets without the consumer having to wait for downloads or needing to reconfigure home-networking hardware. The new service will be available in the U.S. and internationally, the companies said.

The deal gives On2 some traction in the U.S. market, where the likes of Microsoft and RealNetworks dominate. "This is a seminal deployment for On2 in the United States. We hope it will allow On2 to be in the thick of the VOD market domestically to the same degree that we have been in Asia," On2 chief executive Doug McIntyre said.

In July, On2 inked a deal to license its VP5 codec software to STARK Co. Ltd., a Japanese video-on-demand service firm. STARK would use the VP5 codec to shuttle high-quality pictures at low bit rates to its VOD customers.

It also scored a big win with Beijing E-World Technology, to put the VP5 and VP6 codecs Beijing E-World's Enhanced Versatile Disk (EVD), a next-generation player that will power the recoding and playback of video, audio and data. Beijing E-World also acquired a stake in On2 valued at just under $2 million.

Separately, On2 announced the release of a new version of the VP6 Encoder. The newer version features improvements in the real-time live encoding quality and improvements to the quality on video sections with slow pans, zooms, and tracking shots by as much as 25 percent.

The newest VP6 Encoder also promised improved video quality by up to 5 percent through rate optimized quantization choices and new variable bitrate encoding options for use when not streaming video.

On2's VP6 encoder is available immediately on Windows platforms. The decoder is available for a variety of platforms including PCs and set-top boxes, the company said.