With the licensing costs of MPEG-4 still at issue for content delivery companies, VP3 makers On2 Technologies Inc. and Vorbis developers Xiph.org today announced a potentially appealing alternative.

The two organizations have announced an agreement that makes Xiph.opg the prime source of support, distribution and development of On2's VP3 video compression technology.

Xiph.org has announced plans to integrate VP3 into the Ogg Multimedia Framework, which they said will provide an open-source and royalty-free alternative to MPEG-4.

On2 said it's VP3.2 video compression technology is the most efficient open source video code available -- the technology provides high quality video playback and the lowest data rates while still retailing the video's full frame-rate. The VP3.2 codec is supported by RealNetworks Inc. and Apple Computer Inc. -- it's available as part of Apple's QuickTime technology.

Vorbis is the first in a family of Ogg multimedia coding formats to be released by the Xiph.org Foundation. The developers describe it as "a fully open, non-proprietary, patent-and-royalty-free, general-purpose compressed audio format for mid to high quality audio applications."

Xiph.org Foundation CEO Emmett Plant said that there's more to this agreement than putting to rest licensing fees, though. "It's also about giving people the ability to download, modify and distribute the VP3 source code with wild abandon. We're extremely happy to be working with On2 on this project. We're not just developing a great multimedia platform, we're doing it in a way that will satisfy and empower the open source community," he said.