July 19th, 2001

RealNetworks' Equity Investment in On2 Part of Multi-Year Agreement

NEW YORK--(BUSINESS WIRE)--July 19, 2001-- On2 Technologies, The Duck Corporation (AMEX: ONT), a leading technology and services company specializing in providing the highest-quality video compression, today announced an agreement with RealNetworks to license its VP4 video compression technology, for set-top boxes and other devices. As part of the agreement, On2 will enable RealPlayer as the exclusive media player for the VP4 codec, and the RealSystem iQ architecture will become the only streaming media platform capable of delivering the VP4 codec. In addition, RealNetworks has made an equity investment of $1,000,000 in On2 Technologies common stock. The VP4 codec is the first ever compression technology to break the 1-megabit barrier for full-resolution, 60 field-per-second digital video delivery - achieving comparable quality to MPEG-2 at significantly lower data rates.

'On2's relationship with RealNetworks allies On2 with the unequivocal leader in Internet media delivery, and serves as a concrete validation of the quality of our VP4 compression technology,' said Douglas A. McIntyre, President and CEO of On2. 'We believe that the combination of the RealPlayer, RealSystem iQ, and the VP4 codec will enable consumers to have the highest quality playback experience. Our customers will now be able to deliver the most robust, scaleable, user-friendly experience across any network, using any device, to consumers.'

'Today's announcement signals how serious we are in extending RealNetworks leading technologies to set-top boxes and other devices,' said Martin Plaehn, Senior Vice President, Media Systems, RealNetworks, Inc. 'With On2 we are furthering our goal of delivering a great Internet media experience from any platform, in any format, to any device.'

Under terms of the agreement, On2 will develop a software plug-in to RealPlayer that will allow consumers to play files encoded in On2's proprietary VP4 format in the RealPlayer. In conjunction with the development of the codec software, On2 will develop a software plug-in to the RealSystem Server that will enable broadcasters to stream VP4 encoded files.

RealSystem iQ is a robust, standards-based, end-to-end system architecture that can provide a single common framework for global Internet media delivery - from any platform, in any format, and to any device.