Earlier this week I had the chance to sit down and meet with a few members of the Brightcove team, including founder and CEO Jeremy Allaire. We discussed the direction that online video was taking and the stratification seen between consumer and professional markets. And perhaps most interestingly, Allaire was willing to discuss the failures that Brightcove (and the online video space as a whole) has had to grapple with.
Since its launch in 2005 Brightcove has accrued customers spanning television, print media, and the music industry, who use the service to manage their online video content. The company has also seen a rapidly growing base of customers from more unlikely verticals, including biotech the pharmaceutical industry. And the service has seen explosive growth abroad, with foreign markets now accounting for 20% of the company’s revenues after only one year.
But despite the company’s success, there is still widespread confusion as to what Brightcove and other video platforms actually do. For years, many people have lumped services like Brightcove alongside consumer portals like YouTube and Metacafe, but the two represent entirely different markets.
In reality these services have little in common besides a Flash-based movie player. Brightcove and its competitors offer a cloud-based software service that caters to the professional market, essentially allowing companies to outsource their online video component. This extends beyond just a media player – Brightcove also manages advertising analytics, ensures that content is properly “plugged in” to the rest of each customer’s site, and offers a set of content management and programming tools. Conversely, YouTube et al. are geared towards amateurs looking for a place to easily put their content on the web.
Much of the confusion stems from semantics – both sets of services could be called “video platforms”. That said, Brightcove is also partially responsible for the confusion, as it actually did used to offer a YouTube-esque consumer site called Brightcove.TV that was put on the backburner in late 2007. The company has since shifted its full attention to its B2B offering.
While Brightcove has seen more than its share of success, underperformers like Brightcove.TV have made it clear that online video may not developed exactly as the company hoped it would. When the market first began to take off, there was a widespread belief that millions of prospective amateur content creators would be able to monetize their videos, driving a massive stream of long tail revenue. Allaire says that this has largely failed to materialize – while there have been some successful video creators, the concept of a long tail video market simply hasn’t become a viable business.
Another area where online video distribution is largely failing is in the transition from the computer to the television. Allaire explains that he envisions a “democratization of video” that hasn’t happened, largely because of proprietary formats and licensing issues that have plagued the industry. Because there is little Brightcove can do to address the issue, Allarie has written an open letter to the consumer electronics industry, but it’s unlikely we’ll see the open standards we all long for any time soon.
Finally, Allaire acknowledged that the idea of for-pay online content has been largely a failure (though he says this is less of a disappointment). Brightcove invested heavily in producing a platform for paid media content, but the market for this hasn’t materialized. He says that even well received marketplaces like Apple’s iTunes TV and Movie stores have seen disappointing results, and we probably won’t see a wider adoption until the consumer electronics industry breaks down the aforementioned barriers.
Over the next few months, Brightcove will be rolling out its gutted and rebuilt third revision to the public (the new version is currently in a private beta). From there, Allaire predicts that the site will continue to make inroads internationally and with with less “conventional” media creators as more companies turn to video platforms to handle even occasional content posts. Other players in the video platform space include Maven Networks, Move Networks, Delve Networks, and Ooyala.
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“Brightcove and its competitors offer a cloud-based software service that caters to the professional market, essentially allowing companies to outsource their online video component.”
Why isn’t Castfire listed as a competitor in the Crunchbase widgets below the article? They do the exact same thing. I believe they’re more successful at it too.
Just as with social networking where all you need is a server and some starter software, which dilluted it, all you need to build a video distribution service is CDN and ffmpeg, with PHP or something.
The bar is so low to creating these services that they went down the tubes faster than spin off social networking ideas did.
Gotta love VC slang. In a nutshell “cloud computing” in this context is a data-driven website with a CDN alongside, no? What makes Brightcove any more “cloud” than YouTube?
“Brightcove and its competitors offer a cloud-based software service that caters to the professional market, essentially allowing companies to outsource their online video component.”
He’s only using “cloud” as an adjective. YouTube is also cloud based as is Techcrunch as is IP Telophony like Vonage, as are 3g cell phones, as is the entire internet.
I think, and I may be mistaken here that he means that the company videos are stored on remote servers like YouTube’s as opposed to their being stored on the company servers and being served to the internet.
Like say company X said screw Castfire and Brightcove, we’re going to build our own solution for $5000 with ffmpeg, flex and some HTML, that we’re going to use for 2-3 years or whatever upgrade cycle.
They would be using in house servers to serve their videos to the internet. BUT, they would be using their own existing corporate bandwidth, so once their flex and PHP devs code it up, the $5000 investment would last for 3 years until they need a revision. Save big time $$$.
So in that context it would be cloud or SaaS instead of the video being hosting to clients from their own servers.
I happen to know for a fact that companies such as CNET, the NFL and others use these services. That they pay a LOT of money to use them, and that they don’t care if it’s cost effective or not compared to other solutions.
I know that this is a VERY lucrative business and that those who do jump on bandwagons creating similar software to popular online titles have not jumped on video CDN YET.
I say yet, because once they read this, they will.
Of course the bandwidth is an issue, but that can be mitigated and the fees companies will pay for white label video delivery will outweight the CDN fees 1000/1.
This is a surefire way to make easy money. You have to have the time to do it though, or the investment means.
Well, maybe video making is a profession?:)
I always wonder why people think that you can just… start something, without knowing nothing about concepts and so on…
Most of the times you’ll fail, and sometimes, but rarely, you’ll succeed.
Hulu’s content is professional content: people making Hulu content know how to create videos, since they’re doing this for years, and they won’t let anyone tell them how to do such.
I’d really like to see “pay and play” full movie on-demand solutions, but this is possible only with Flash H.264 – forget DRMed wmvs, please.
And while I have nothing bad for on-demand streaming, some say, the real solution would still be downloading… and in fact, it’s still torrent which has the best and easiest user interface, since they don’t have to deal with the “don’t steal it” barrier – it’s already stolen. Given, that it costs nothing, well…. It’ll be a hard match, but we all know this for years.
“I’d really like to see “pay and play” full movie on-demand solutions, but this is possible only with Flash H.264 – forget DRMed wmvs, please.”
Have you ever heard of Netflix?
I live in a small island called Eurasia, where netflix isn’t available… I know that they started such business (besides the dvd rental stuff), but is it in flash?:)
Aadaam, It can’t be in flash. The licensing agreements on movies are not international. If you have netflix and you try to watch movies online outside of the United States it won’t work.
Not because of technology, but because of licensing issues with the movies themselves.
That’s the issue. Not the technology.
As for Brightcove, it’s little more than video splicing ala ffmpeg with some CDN. Again, there are 10+ startups doing exactly the same thing and they can’t all win.
Still better than the social networking scene where there are 10 thousand startups doing the same thing.
If I wasn’t so busy, I’d build one of these video CDN sites too. Damn. easy money lost. Some companies are so reluctant to show the YouTube alpha logo in the bottom right hand corner that they’ll pay anything. A limited custom player selection is good too, and not very hard to implement in Flex.
Well, you can’t do everything. The best way to make money is to find something that companies are embarassed about like the YouTube logo, then provide them a custom “enterprise” solution. In reality, a developer to build these solutions in house would be cheaper, but nobody wants to manage an actual human being so they pay through the nose to have an easy solution that fill their super market checkout candy bar instinct.
Jason,
I just want to quickly comment on the revenue generation piece for content creators. I think it’s too early to judge that the long tail rev generation for the amateur content creators have “failed to materialize”.
There are interesting services that are trying to crack this puzzle. For instance, Zadby is playing matchmaking between the brands and content creators for product placement in online videos. I think this is a win-win for both side.
I am sure there are, and will, be plenty of ways to monetize through online video, it’s just still a bit early. Your thoughts?
Ray
Left off KIT digital as well. 90% of their revenues are realized outside the US but they do run the video sites of many top US media sites like New York Post.
what makes KIT digital interesting is that they act more as a full service agency rather than just a tech provider…. they do branding, monetization etc…. look at Australia’s big video providers to get what I mean.
Why doesn’t Brightcove focus itself on streaming videos for the cell phone? 1m+ iphone subscribers would love to watch videos on their devices…. isn’t this an obvious market that hasn’t yet found a single fore-front leader?
We are working on it. But only with content providers who a) don’t have a pine cone up their ass about HD quality on cell phone screens and b) control their rights. b) is waaaay moooost important.
I partially agree. There are tons of cos out there who would love to have their content on cell phones *cough* NSFW *cough* Why not split the brand and entice them? It worked for AdBrite and I don’t see a reason why it won’t work for u guys….
I’ve been following brightcove since they started, their product is very much similar to many other products in the market today, as its flash based there is little they offer that is unique.
The only success is that they raised a lot of money and some of the strategic investors are using the product like Hearst corp.
Nonetheless, they are not a significant ad play and are not very widespread among smaller non-media users. Moreover, companies today need a whole bunch of service to help with video production, content management, ad support, media syndication an CDN and brightcove as noted is doing only the content management part.
In the beginning they charged users minimum of $2,500 to launch a channel now I’ve heard they give it for free. Its also a sign that thing went the wrong way for them.
To make a long story short as long as they don’t touch significant ad money their valuation is disproportional.
Check out CHIC.TV’s plan named “Your Brand” TV. You get not only a product similar to Brightcove, but an editorial team creates webisode for brands Internet TV Channel and syndicate the media across our partner’s network including Hulu and Joost.
“Your Brand” TV: http://www.your-brand.tv
CHIC.TV: http://www.chic.tv
CHIC.TV on Hulu: http://www.hulu...om/companies/68
Rami, CHIC.TV
I work at PermissionTV.com, another participant in this same space. I’d agree with many points made by Jason in the post. Specifically, the confusion in the market between online video consumer portals (video 1.0) and online interactive video platforms (Video 2.0) has led to a “de-education” and kept the possibilities of bringing truly interactive content to the web at bay. Basically, if you’re just “a CDN and ffmpeg, with PHP” on top, as T3chlusive mentioned in the comments – then you’re going to fail. PTV is different in that we launched our video player development kit (PDK) earlier this year that allows our clients to build their own player experiences on top of the platform. The fact that Brightcove is following this same tactic with their upcoming release indicates, to me at least, that’s the direction that online video will go for the foreseeable future.
Great post Jason!
“Basically, if you’re just “a CDN and ffmpeg, with PHP” on top, as T3chlusive mentioned in the comments – then you’re going to fail.”
You’re absolutely wrong. There are 5-10 companies in the US doing 7 figures a year on this model.
“PTV is different in that we launched our video player development kit (PDK) earlier ”
They’re all doing this except they’re doing it as a browser player builder application. The browser app, creates a configuration file, then the Flex or Flash player loads the embedded or XML local config file to create the appropriate GUI dynamically when it draws itself for the first time.
ActiveX ONPAINT()
This is actually common for video content delivery now. You’re not ahead of the curve.
The pie is going to get a lot smaller as more software shops figure out what this space is doing and replicate it. The ROI is enormous and very hard to ignore. Most people do not know about the large clients and $$$ in this space. Again if they read this thread they will now.
I said they “will fail,” not “are failing.” What they’re doing now, and what they’ll be doing 1 or 2 years from now, is different. Kaltura will eat their lunch.
Also, I wasn’t intimating that PTV is “ahead of the curve.” I was trying to underscore the difference between a consumer video portal and a true online video platform.
You’re obviously more well versed in the space than I am. I’m not a full-time blogger who knows the markets and trends, like yourself. I work for a living (just kidding). With that said, I think you’re trying to draw some conclusions on my comment that aren’t there.
“I work for a living (just kidding).”
Fair enough, though you don’t know whether or not I have a day job.
“I think you’re trying to draw some conclusions on my comment that aren’t there.”
That’s fair.
“Kaltura will eat their lunch.”
Kalutra isn’t the same type of service. These other companies are aimed at enterprise clients.
http://corp.kal...nology_stack.3F
“On top of that we have a proprietary applicative layer written in PHP, Javascript, HTML and shell scripts. ”
The first “open source” video platform? I don’t think people know what that means anymore. Just because your 3rd party integration tools are open source, that hardly makes the product OSS.
That’s extremely deceptive. I feel I should warn people. There is no way to download the source code to the server side of Kaltura. It is not an open source stack as you would find with a sourceforge project.
Any small programming team can script ffmpeg and CDN though.
It’s easy money, I’ll say it again. I’m too stretched, or I’d jump on it too.
When your CDN costs for delivery PER 1,000 video exceeds your eCPM then how can it ever work. (OK except for porn) It’s great for vanity sites such as broadcasters but little else real world use. Those broadcasters will end up pulling the plug too when they start looking closely at the bills and comparing the revenue.
“Those broadcasters will end up pulling the plug too when they start looking closely at the bills and comparing the revenue.”
They don’t care about the video stats. That’s not what it’s about. The companies that use these services are using it for vanity as you mentioned. The big clients that use this type of service don’t expect anything else out of it from my understanding.
That’s part of why a home grown solution is out of the question for them.
Companies will start to understand that one stop shops like Brightcove can’t deliver everything. For instance, I feel they are on the wrong track for their advertising model. Lower thirds?? Come on, those ads are sooooo annoying. They are just as annoying as pre-rolls. Users don’t want to be bombarded with those type of ads.
On the other hand, some companies are getting it right, I feel. Checkout this company called Husky media I came across the other day, http://www.huskymedia.com
They use an ad type called “Video Skins”, much less obtrusive. For what their blog says, it makes way more money then lower thirds do. Very interesting. All I need to do now is make a video web site
“Checkout this company called Husky media I came across the other day”
It gets blocked with Adblock plus, BUT, this made me laugh. You could reproduce this tech in about 5 minutes.
Dare me to do it, DARE ME!!!, Once the dare is issues, start the 5 minute timer.
That should have read, “Once the dare is issued, start the 5 minute timer.”
I will not cheat and start ahead of time. 1 50% CSS alpha black div, plus 1 div overlay with a background advert image and the youtube embed html is about 3-4 minutes.
The “youtube” image from their demo page isn’t even flash
huskymedia.com/publisher/husky-in-action
http://www.husk...ion-youtube.jpg
The devs don’t know how to catch DOM clicks over a flash embed. That’s sad. Again, I am up for the dare. Just like with Pattwit.com vs. theMattinator.com
HuskeyMedia,
body onload()
getElementsByTagName(’embed’)
loop through the elements, and place invisible divs over the flash players with top – left absolute positioned from the position of the embed DOM elements.
Those divs over the flash players will get the attachEvent/addEventListener onmouseclick
The handler for those mouseclicks will open the lightbox with the background advert and the youtube player.
The way you are doing it now makes you look like serious newbies.
Jeremy Allaire is the one person who I’ve met that made me go “wow”. I think that most successful web startups are “lucky”, but he seems like the type of person that methodically finds success. Brightcove will crack the monetization nut before YouTube.
I’ve heard that some companies on Brightcove are getting CPM’s as high as $30 for premium content. There is a sustainable model to be had there.
Wow, lots of testosterone in all these comments… Everybody is trying to compare the size of their tool… but forgetting the most important fact. The bottom line is that the Web has evolved from a text medium to a video medium, and there is no turning back. Companies like Brightcove, VideoBloom or PermissionTV all have a very bright future, unless humans suddenly decide that visual communication is not paramount.
No doubt that “Video 2.0″ is an interesting topic to follow these days.
Just to clarify regarding the comment on Kaltura – the main components of our platform are already open source and available for download. We are in the process of turning the entire platform to be open source – a full community edition of the platform will be available for download soon – this is also related to the work we’re doing with the Wikimedia Foundation: http://wikimedi...ideo_Experiment
In regards to our solutions and targeting – we are focused on both enterprise customers – we offer a cost-effective and flexible alternative to proprietary solutions, as well as self-serve publishers, such as wikis, blogs and other sites using leading web-platforms. For example, check out our Interactive Video plugin that we just launched for WordPress blogs: http://wordpres...eractive-video/
As a content provider that used Brightcove’s platform I was very disappointed to get the news they’d stopped the pay-per-view service. I liked the studio interface, the player concept etc. and it worked well for me in terms of managing content and player integration to my site. And my sales payments came through immediately, not 60 days later.
I think they’ve quit from the pay-per-view service way too early just as everyone is catching up. They were among the first to get involved and have just got impatient.
I make feature films, not webisodes, so the current ad-sponsored models just don’t work and I’m not interested in running a TV station. All I want is control over my media to allow interested viewers to buy direct from me without getting permission from a gatekeeper who decides to let me on their distribution platform or not.
Of the platforms I’ve been using, Vuze has been my favourite – I get control, I get viewers and I can get paid. And for those who care, it’s p2p.
Online video and video downloads for feature films is *extremely* popular – just look at the torrent sites – the problem is that the “industry” is not price-competitive with piracy. While the major studios continue their premium pricing it’s going to slow adoption and it’s the little guys like me that are being hit the hardest.
I agree that customer equipment will help spread adoption – I like my Apple TV and I like the look of Vudu. But I don’t like the model where to get on iTunes I’m supposed to go through some middleman to encode my media and then rip off a commission for doing little else. I’d like an open home platform where the viewer decides what they want to watch.
The film industry is following the same path as the music industry: viewers/listeners want to consume media in their own way, and when they want it.
It sounds like the space is currently trying to work itself out and develop a viable model. Additionally, it seems like you really can’t quite ignore any format as it just too early. I guess the key is to have enough cash on hand to be able to run your business and eventually monetize. Jippidy.com – Video Yellow Pages
Brightcove will face significant competition from Ooyala and many 3rd party tools. There is not really a good long term business model in creating workflow, CMS, and other tools on top of the core Adobe product. Reading the comments here seems to indicate that at least in our end of the market (emerging) people are starting to get it…
But their core customer base (Media) does not.
http://hmmconve...nt.blogspot.com
I’ve used most of these platforms pretty extensively. Brightcove more than others. The one thing I am shocked by is how many of them consider “let media creator control advertising” to be a 4th or 5th priority — if it’s even on the roadmap. I have asked Brightcove to add that ability for “smaller publishers”, and to charge me for the ability to do so. So far, still waiting. Guess it may be in the V3, maybe not. They won’t say, which makes it hard for planning purposes on my side.
On the other hand, Ooyala has been very responsive. Very impressed with their focus on allowing me to monetize through controlling my own advertising as they continue to add features. Some of these features are shaping up to be very powerful.
I’ve asked for information about pricing from Permission TV as well as Maven, but their slow or non-responses haven’t really impressed.
Everyone seems to still be figuring it out. However, I would really appreciate it if they would listen a bit more to their users and not play the game as though they know best (is it ego? or they’re just understaffed?). Given how many of them change game plans as often as they do, it’s quite apparent that that do not in fact, know what’s best.
Hi Ryan. Adam Zaks here from PermissionTV. Sorry to hear that no one at PTV got back to you in the past, but I am glad to assist you with your recent inquiry submitted to our website yesterday. I received your question today re: “Integrating PTV w/ your CMS,” and will follow-up with you in more detail, but in short, this is right in our sweet spot and certainly achievable with our software. Speak to you soon….
I believe that the most successful model for online video will be Direct Response TV.
I have been watching this space for years.. Have worked in the technical side of film and TV production for 20 years. One point of fact, yes it is quite easy to build a brightcove type product out of ffmpeg, flex and PHP.
But no one seems to want to point out that it is not technology that makes these business models work. It is relationships and marketing that have a bigger effect on who is successful and who is not.
The fact is that bandwidth is getting cheaper and cheaper, Tools are free, if not very easy to build.
What we are waiting for here are open tools for the consumer that lets them access ANY BODIES tools. (Like the web browser for the TV, but designed for finding and watching Streaming and downloadable media) AppleTV, Media Centre, etc. All push you to some form of gate keeper and so kills the deal for the small guy. And the small guy is the future. So right now, there is no real future, as we have no viable path forward.
The industry will slowly fall into line as seen when the Region-restricted-DVD player slowly disappeared and only region free units would sell. Right now, the Sony PS3 with TV-tuner capabilities, supported Video online shops starting up, and a reasonable web browser which may be the doorway to open media gateways. (Plus DivX support for torrenting) But it is hard to say, Sony have traditionally been hard core with very DRM type implementations. This is a change in the wind for them. (But they need it)
In any case, yes there is a need for companies like Brightcove, but profitability is not in good proportion to VC investment in this space.
James
T3 said:
“The companies that use these services are using it for vanity as you mentioned. ”
Assuming you mean brand advertisers, true. It’s about branding and anything they do online is cheaper than doing it on cable or network tv.
The race to this space is just ahead of us.