Company Profile: On2 Technologies Pledges Continued Innovation

Sometimes timing is everything. Two weeks ago, as part of a series I’ll be doing over the next few months on streaming media executives, I had the opportunity to interview Doug McIntyre at On2 Technologies’ corporate offices in Manhattan. I found McIntyre to be very open and straightforward, with compelling micro- and macro-level perspectives on streaming media, from codecs and formats to big-picture analysis. Doug’s perspective had been honed from five years at On2, coupled with a business skills set anchored in traditional print media, in which he was involved until new media came calling, looking for traditional media executives in the late 1990s.

The story, set to publish today, however, was pre-empted by the announcement last week that McIntyre was leaving the company. So the article now becomes less about his key role in positioning the company for the growth it’s experiencing today and more a look at how the company fits into the industry as a whole. First, though, a brief recap of the company.

On2 (formerly known as The Duck Corporation) went public back in 1999. Like other tech companies at the time, it boasted an impressive stock value, peaking near $40 per share, before the bubble burst and stock values shot downward. During our interview, McIntyre noted there had been some "lean years" since 2001, and the stock reflects that–having peaked once in mid-2003 just below $4 per share before settling back to a range just above or below $1 for the past two years.

2005 brought a significant amount of growth to On2, with major licensing announcements for its VP6 codec from companies such as Skype, AOL, and Macromedia. The latter was of particular interest in the digital media/content creation industry, as Flash is used to varying extents on a significant number of Web sites and the Flash player is hence installed on the vast majority of Internet-enabled Windows and Macintosh machines.

The former two licensees, however, are also of significant interest to On2’s management team, who view Skype and AOL’s Triton instant messaging services as harbingers of a new breed of consumer electronic devices. In fact, McIntyre went so far as to say that while On2’s VP6 and VP7 codecs might not compete as effectively in the race for high-definition codec supremacy, the company was positioning its codecs with "sweet spots" (the bandwidth level at which the codec works most efficiently) that were easily within reach of today’s CE devices.

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