August 16th, 2000

Next Generation Technology Brings Improved Video Quality to the Internet at 200 kbps

New York, NY, August 16, 2000 - On2.com Inc. (ASE: ONT), the New York-based broadband technology and service provider, announced today the scheduled September 2000 release of its new TrueMotion VP3.2 technology, a leading-edge product specially engineered to provide full-screen, TV-quality streaming video and audio over the Internet at data rates as low as 200 kilobits per second.

'This is the next generation of our core technology,' said Daniel B. Miller, Founder and Chief Technology Officer of On2. 'By introducing VP3.2, we continue to lead the industry in providing full-screen, high-quality video at the lowest possible data rates.'

On2's development of VP3.2 now makes it possible to deliver consistently high-quality streaming video even at the lower end of the broadband spectrum. VP3.2 users will be assured of a rich broadband experience at these low data rates due to VP3.2's unique proprietary technology, which acts as 'broadband insurance'. VP3.2 combines state-of-the-art advances in video compression, server-side streaming, and bandwidth management to compensate for bottlenecks in the Internet infrastructure that often result in deterioration of quality as increasing numbers of broadband users come online.

'The number one issue with broadband today is that the cable and DSL infrastructure cannot deliver streaming video at constant bit rates,' said Douglas A. McIntyre, On2's President and CEO. 'As Internet congestion builds, data rates lower, causing delays in audio and video streaming. VP3.2 addresses this issue by maintaining a steady level of TV-quality video streaming at rates below those traditionally considered broadband.'

McIntyre concluded, 'On2's VP3.2 -- built on the core technology for which we are well known in our industry -- raises the quality of the broadband experience at lower data rates. We have built TrueMotion VP3.2 to bring a more positive broadband experience to a larger audience.'