On2 Technologies and Zencoder Partner to Create On-Demand Video Encoding Service

CLIFTON PARK, N.Y. and MINNEAPOLIS, Nov. 6 -- On2 Technologies, Inc. (AMEX:ONT) and Zencoder, LLC announced today that they are collaborating to build a high-capacity video encoding service within the Amazon Elastic Compute Cloud (EC2).

On2 will integrate its On2 Flix Engine video encoding software with the Zencoder video transcoding system to create a web-based service that lowers costs for content publishers while also providing nearly unlimited encoding capacity.

"In evaluating partners for our service, we sought someone with strong web application and virtual computing experience, and Zencoder fit the bill perfectly," said Eero Kaikkonnen, Chief Marketing Officer at On2. "Integrating our Flix Engine with Zencoder will provide a flexible solution that handles every aspect of the video publishing lifecycle -- from job queuing to encoding to storage -- while requiring minimal effort by developers. In fact, after subscribing to the service customers will be able to start publishing videos the same day."

"Cloud computing, like Amazon EC2, is perfect for video transcoding. Transcoding is CPU-intensive, and transcoding tasks usually come in waves. So Amazon EC2 gives us enormous CPU resources that we can scale up, and down, as needed," said Jonathan Dahl, founder of Zencoder.

Service Will Simplify Development, Reduce Costs for Customers

Video web sites who publish large quantities of content in-house face two significant problems. During slow traffic periods their encoding servers are underutilized, resulting in wasted resources. When traffic is heavy, however, the servers can become overwhelmed, decreasing quality-of-service and frustrating end users.

The On2 encoding service will solve these problems by combining the performance of its Flix Engine software with the scalability, reliability, and low cost of Amazon EC2. Whether encoding dozens of videos to HD or thousands for the web, the new service will charge customers only a volume-based rate for the computing time that they use and no monthly subscription fees. In addition, On2 will provide carefully preset "encoding recipes" to ensure the best quality video output from Flix Engine with minimal configuration.

Zencoder will provide the web-based account management dashboard, job queuing & cloud scaling algorithms and REST web services API (accessible through any programming language) for the service.

The result will be higher quality-of-service and better video quality for customers while reducing publishing costs and eliminating in-house server deployment and maintenance headaches.

"As online video use grows, companies are discovering how expensive and complicated it is to convert large amounts of content to Flash, HD, mobile and other formats using traditional server hardware in-house," said Frank Galligan, General Manager, Applications and VP of Engineering at On2. "Video encoding requires a lot of computing power, so highly scalable virtual computing platforms like Amazon EC2 are ideal for on-demand encoding. Sites spend thousands of dollars and person hours on hardware, programming and administrative costs to encode video when they would rather devote those resources to their core business. Our service will help them do that."

  Availability
  The On2/Zencoder video publishing service will be available in early 2009.

  About On2 Technologies and On2 Flix Engine

On2 creates advanced video compression technologies for desktop and wireless. Powering the video in many of today's leading web and mobile applications and devices, On2's customers include: Nokia, Infineon, Mediatek, Sony, Facebook, Brightcove, Move Networks, Adobe and Skype. On2 Technologies is headquartered in Clifton Park, NY USA. For more information please visit www.on2.com.

The On2 Flix Engine SDK is a leading enterprise video encoding platform for Linux and Windows used by web video, broadcast, social networking and other leading enterprises for creating video in multiple formats.

About Zencoder LLC

Zencoder is a full-stack video transcoding system that handles every aspect of video processing, from queuing to transcoding to storage. Zencoder is easy to set up, extremely scalable, highly reliable, and integrates through a simple web services API. The system can run on a variety of platforms, including Amazon EC2, high-performance server hardware, and commodity hardware.

The team behind Zencoder is involved in the open source software community, and created the Ruby video transcoding library RVideo.

To learn more about Zencoder, visit www.zencoder.tv.

Trademarks mentioned in this release are property of their respective owners.