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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 licensing deals with America Online, Sony and Intel, will create systems that deliver high-quality VOD programming to consumer television sets. PERFECTV uses network peering and firewall negotiation technologies to deliver video and live video conferencing a standard home broadband connection.

On2’s new VP6 Encoder 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.

Subscription VOD is hot. Cable and Satellite companies are bundling PVRs for downloading movies.

CinemaNow holds the exclusive Internet distribution rights to the most extensive and comprehensive library of feature films available on-demand via the Internet and private broadband networks. Its film library contains over 3,000 feature-length films from more than 125 licensors, including 20th Century Fox, Warner Bros., MGM, and others. CinemaNow’s PatchBay, a proprietary video-on-demand content distribution and management system is available as a licensable technology solution. Consumers can view the films for free (advertising supported), pay-per-view, and by subscription. Consumers have a choice four streaming rates, ranging from 56 kbps to 700 kbps.

Microsoft’s MSN, is considering the launch of free, advertising-supported broadband services, including audio and video packages that could rival Yahoo Platinum and RealNetworks’ RealOne. AOL 9.0 Optimized includes an expanded video library, full-screen theater viewing, a new Media Player with minimal-to-no buffering, and the ability to share video clips via instant messages and e-mail. Perhaps fee-based VOD movie downloads from T/W could be next.

But Cable Modems are too congested (and business conflicted), DSL is too slow and cellular-based EV-DO is too expensive to effectively deliver video on demand.

Neighborhood wireless broadband is just right.

The Asia Pacific region will boast 555 million TV households by 2010, an increase of 116 million since 1995. Asia also has the largest broadband subscriber base and more multiplayer gamers than anywhere else in the world. Sony’s “cell” multiplayer console (above) will likely enhance their leadership.

MPEG-4, multi-lingual programming from the West Coast Grid could be distributed to 2/3rds the world’s population, uplinked from the TxVision teleport in Hawaii. Hawaii’s footprint connects to two-thirds of the world’s population in China, Japan, Korea, Malaysia, Indonesia, Philippines, Thailand and India.

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