On2 has announced VP8, the latest in their line of video codecs. Most folks are familiar with VP6, which was the standard Flash Video format prior to the adoption of H.264.
On2 is claiming that they can achieve H.264 performance at half the bitrate. I don’t doubt that there are instances in which that’s true, though with any codec comparison, there’s lots of room to fudge the issue. Keep in mind that H.264 was initially approved in 2003, so it doesn’t surprise me that On2 has been able to make improvements, though similarly in that time there have been many improvements to the H.264 standard which have not yet made it into mainstream software.
I think the time of proprietary, single source codecs like VP8, VP6, or Real (or even Sorenson) have passed. VP6 was a great stopgap which allowed Flash to deliver decent quality video in the browser, but it was always a pain to work with, with limited encoding options and non-standard tools. On2 is advertising VP8 as an alternative to the mucky patent world of the MPEG licensing association, but that process isn’t nearly as difficult to traverse as they imply, and I doubt the costs to get a license for H.264 are significantly different than the costs to license VP8.
The great benefit of ISO standards like VC-1 and H.264 is that anyone can go get a reference encoder or reference decoder, with the full source code, and hack on their own product. When it times come to ship, they just send the MPEG-LA a dollar (or whatever) for each copy and everyone is happy.
Ok, that’s enough rambling.