Google TV: Another Reason Open Sourcing VP8 Matters

Google’s (s GOOG) decision to open source On2 Technology’s VP8 video codec at its Google I/O developer conference next month is not only a huge boon for HTML5 web video and a blow against Adobe’s (s ADBE) Flash. It’s also clearly aimed at optimizing video playback on a number of devices, like the much-rumored Google TV platform as well as upcoming Android tablet PCs.

Device makers have previously expressed their frustration about the hardware requirements of HD video and rich Internet content, but VP8 could be key for Google to drive down those costs and get a foot in the living room.

On2 Technologies claimed at the time of the VP8 announcement announcement that the codec reduced “playback complexity by 40%,” compared to H.264 implementations. Less numbers to crunch means less expensive chips and better video on low-end devices, which is exactly where Google wants to go. On2 cooperated closely with chip maker ARM (s ARMH) on the development of VP8, going as far as saying that the codec was “designed with ARM in mind.” ARM chips are not only used on countless mobile phones, but they’re also increasingly creeping into the world of connected TVs and set-top-boxes. One ARM-powered device you might have heard of is the Boxee box.

Google is obviously interested in entering this space, as recent reports about a Google TV set-top-box based on its Android operating system have shown. The company is reportedly working on an alliance with Intel to produce a high-end set-top box, but it has also been talking to CE makers to get onto devices with less processing power.  Panasonic (s PC) EVP Bob Perry recently stated that his company shied away from Android on its connected TV sets because the OS would have required too expensive chip sets.

Panasonic isn’t the only company plagued by the costs of getting rich Internet environments on the TV set. Boxee CEO Avner Ronen told us in an interview last year at NewTeeVee Live that he would have liked to build a $99 Boxee box, but hitting that price point wasn’t possible for Boxee, which will now sell its box for $200. Part of that is due to the power needed to play back 1080p video, but part of it also has to do with the fact that Boxee relies on Flash 10.1 to play video from sites like Hulu, which goes to show that optimizing video playback on CE devices and HTML5 go hand in hand.

Google’s Android strategy has clearly shown that the company is interested in all parts of the market, including expensive, powerful hadsets like the Nexus One — as well as less powerful handsets that only run bare-bones versions of Android. It’s only logical for Google to pursue the same strategy when addressing connected devices in the living room, and having a royalty-free, open source VP8 codec available will help to accomplish that goal.

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