Google has released under a royalty-free open source licence the VP8 video compression scheme that it gained with its acquisition of On2 Technologies for nearly $125 million. It is being promoted as an alternative to the widely adopted but patent protected H.264 compression scheme. It seems unlikely to replace H.264 for many applications, so why is Google doing this?

Although the HTML 5 specification allows native playback of video without plug-ins in the latest compatible browsers, for patent and commercial reasons there is no agreement or standardisation on the audio and video file format or compression schemes that are supported.

The widely supported H.264 video compression scheme is covered by patents that are managed on behalf of licensors by MPEG-LA. For this reason, Mozilla does not support H.264 directly in the Firefox browser. Together with Opera they have to date adopted instead the Theora codec, which is an open source version of an earlier On2 VP3 codec which was released into the public domain.

Google hopes that VP8 will provide a better alternative to H.264 than Theora. Google is joining Mozilla and Opera in the WebM project to define a file format, based on subset of the open container format known as Matroska, that will use exclusively the open source VP8 video and the Vorbis audio compression schemes.

Microsoft has indicated that it will support playback of both H.264 and VP8 video in its IE9 browser but only where the user has already installed a VP8 codec.

Adobe, which supported On2 codecs in Flash before adding H.264, has also announced additional support for VP8 in a forthcoming release.

Many online video service providers and encoder vendors have announced their support for VP8 but as yet it lacks the maturity of H.264 or hardware decoding implementations in silicon.

Apple is conspicuous in its absence among those offering support for WebM and VP8. The company has stated its commitment to open standards, rather than published but proprietary solutions such as Flash.

Significantly, they may be open and royalty free but WebM and VP8 are not yet specifications published through a recognised standards body. Despite an enthusiastic response from the idealistic open source community, the video compression picture remains complex.

For broadcast applications, H.264 will continue to be the standard and so television devices and displays will already have licensed decompression implementations.

H.264 remains arguably superior to VP8 but many of the more advanced features of H.264 are not employed in online video to ensure compatibility with the broadest range of devices. For many purposes VP8 may be comparable in quality. Over time its performance could be improved.

Although VP8 may now be open source, it is not necessarily free of patent restrictions, as has been noted by MPEG-LA, which operates the patent pool under which H.264 is licensed. Google appears confident that VP8 does not infringe on other patents but that has yet to be tested. The licence under which VP8 is being made available terminates in the event of patent litigation alleging infringement by the code.

Key to the success of VP8 will be the widespread availability of video in the format. YouTube will be encoding all 720p or better videos that are uploaded in VP8 as part of its HTML 5 experiment.

While VP8 seems unlikely to displace H.264 for many applications, the existence of an open alternative promises to ensure that online video will not necessarily involve payment for patent licences.

In particular, it could serve to ensure that H.264 remains free of royalty payments for certain online uses for some time to come, potentially beyond the expiry of relevant patents.

As such, the acquisition of On2 and the much anticipated open sourcing of one of its key assets can be seen as a strategic move by Google to maintain an open environment in which to operate. It puts the ability to use audio and video on the web on a par with images and text, supported by entirely open standards.