Vendors have reservations about submarine patents on Theora/VP3 - the possibility that that even though On2 has disclaimed patent rights, other patent holders are lurking about, waiting for Theora/VP3 to become popular enough to sue over.
I think VP6 doesn't have this problem. If a patent troll had a potential claim over VP6, they'd have gone after On2 or Adobe or Youtube by this point.
EDIT: Someone else has posted that Youtube never used VP6. Anyone know if Flash+VP6 was common enough to obviate the "we're nervous about patents because nobody ever used this" argument against Theora/VP3?
On2 is notorious for having fallen behind technology-wise, with VP7 falling by the wayside and VP8 seemingly being just a small upgrade of VP7--and still being vastly inferior to the best free software encoders out there. They've pretty much had to cheat in every single comparison they've posted in order to make it look as if they were still in the game.
They've spent the past seven years saying that they were "about to" come out with something better than H.264, and yet still haven't; they're almost Duke Nukem Forever-level in terms of vaporware.
A developer I know joked that their entire development team is probably worth less than Skal (former Xvid developer who currently works for Google).
Furthermore, nobody is going to buy into a new video format--even on the phenomenally unlikely chance that it's marginally better--if no hardware supports it.
The only thing I can imagine is that they bought them for their software patents, which says something about the sad state of the intellectual property world.
It has quite a large customer base. Brightcove, Skype, Youtube to name a few.
Obviously not in the league of H.264 though.
EDIT: but still lossmaking...http://www.on2.com/file.php?228
Additionally, I'm not so sure a large customer-base is even a good thing; everyone I've talked to who has used their VP6 encoder engine on a server farm comments on how much of a crashy, buggy piece of crap it is. This reputation is not going to help grow the business in the future even if they do produce a good product.
I have no idea where this misinformation comes from. VP6 was released well before H.264 and was meant to compete with MPEG-4 Part 2, aka Xvid, DivX, etc. It did that well; it is probably at least comparable to Xvid, though I haven't tested VP6 myself. It is nowhere near H.264, however. A good H.264 encoder can probably beat VP6 by a factor of two in compression.
VP7 was meant to compete with H.264, and is not supported by Flash. It, however, was only competitive with very early H.264 encoders, which were quite bad. It quickly fell out of favor as H.264 encoders got better.
VP8 is meant to compete with H.264 again.
I downloaded some content recently that was VP8 encoded. Came with instructions to download a codec.. which is Windows XP and higher only.
Not even VLC can play that.
