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On2 Launches VP6, World's Most Powerful Video Codec

New Product Support High Definition With No Restrictions and Real Time D1

NEW YORK, and CAMBRIDGE, England, May 12, 2003 -- On2 Technologies, Inc., The Duck Corporation (AMEX: ONT), a world leader in video compression for 12 years, today debuted its new flagship codec, VP6.

The new codec supports high definition without any compressor restrictions and supports real time encoding at D1 resolutions. The codec produces up to 40% better image quality than the company's previous flagship, VP5. It also uses up to 50% less CPU than VP5, creating faster playback on semiconductors.

VP6 will run on inexpensive digital signal processors without the expensive sub-processors than many standards-based codecs (JVT and MPEG-4) require. VP6 is a strictly software-based solution.

VP6 will encode and decode at any datarate while automatically adjusting quantization levels or adjust encoded frame dimensions.

The new codec will be available in two versions, Simple Profile for faster playback on inexpensive processors, and Advanced Profile for high quality at extremely low bitrates.

On PSNR tests, VP6 substantially outperforms JVT / H.26L, Windows Media 9, and DIVX 5.05.

"This new codec from On2 simply does a number of things substantially better than any other codec available at an price. It does not just outperform the competition in one or two arenas, it outperforms the competition, period," said Douglas A. McIntyre, Chairman, President and Chief Executive Officer of the Company.

"With VP6 we've addressed our customer's needs and exceeded their expectations. The benefit of VP6 is simple and tangible: VP6 video looks sharper, it plays faster and it runs better on their platforms," said Eric Ameres, Chief Technology Officer, Executive Vice President Engineering of the Company.

"VP6 is a significant advance in the science of video compression. In just 5 months time we've managed to research, develop and bring to production six separate major inventions. I'm proud of my team and our accomplishment," said Paul Wilkins, the Company's Senior Vice President, Research and Development. "To date no one has provided the digital television industry a strong enough case for abandoning MPEG-2. Now we can: VP6 looks better than MPEG-2 at less than 1/2 the datarate without requiring more processor power," said Jim Bankoski, Senior Vice President, Engineering of the Company.

Please visit www.on2.com for more information about VP6 and to view test clips of VP6 encoded content.

About On2 Technologies, The Duck Corporation

On2 Technologies (AMEX: ONT - News) is a leading technology firm at the forefront of video compression. The Company revolutionized video encoding with the creation of its advanced full-motion, full-screen, video compression and streaming technology (TrueMotion® VP4/VP5/VP6). On2 licenses its high quality video codecs for use in set-top boxes, consumer electronics devices and wireless applications. In addition, On2 offers a suite of products and services, including high-level video encoding, customized technical support, and consulting/integration services. Located in New York City, the Company has an office in Clifton Park, NY, and operations in Cambridge, UK. On2 may be reached at 21 Corporate Drive, Suite 103, Clifton Park, NY 12065 or info@on2.com or sales@on2.com.

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