Davos Interviews: Brightcove CEO Talks Video, Provides Tech Support

I sat down with Brightcove CEO Jeremy Allaire at the World Economic Forum in Davos, Switzerland last week to talk about his business.

Brightcove isn’t the sexiest startup out there. They’re a video platform – giving websites the tools they need to host and stream video, for a fee ranging from $100/month to “six figures per year” for the largest customers. For the most part users never see the Brightcove brand. And Allaire is just fine with that. He just wants happy customers.

The company launched in 2005, has raised just over $90 million in venture capital, and is approaching profitability, he says. Allaire says he wants to build a public company, and is happy being based in Boston.

Brightcove competes with newer upstarts like Ooyala, although Allaire says Brightcove remains the strongest company in its space. Another competitor, Maven Networks, was acquired by Yahoo in 2008 for around $160 million. The product was unceremoniously shut down by Yahoo a year later. Allaire says they picked up most of Maven’s customers.

You can see the full interview above. And don’t miss the outtake at the end of the video where Allaire gives some free tech support to a customer. Time Inc. reporter Barbara Kiviat was having some issues uploading a video.

The transcript of the interview is pasted below.

MICHAEL ARRINGTON : Jeremy Allaire is the founder and CEO of Brightcove. You’re the founder, the sole founder, right?

JEREMY ALLAIRE: I am the founder and CEO, yeah.

ARRINGTON: You’ve been around since ’04, ’05? When did you found…

ALLAIRE: 2005, yeah.

ARRINGTON: And you help companies get their video up on the internet.

ALLAIRE: That’s right, yeah.

ARRINGTON: We’ve known you forever.

ALLAIRE: Yeah.

ARRINGTON: And so we’ve been following you from the earliest days of TechCrunch, but every once in a while it’s always good to check in and just hear what’s going on with your business. So what’s going on with your business? How much money have you raised to date? How many customers do you have? What’s the revenue?

ALLAIRE: Yeah, absolutely. So well, we’ve raised about 90 million in capital over the last five years.

ARRINGTON: How much of that is left?
ALLAIRE: Quite a bit, actually. The last time we raised money was three years ago, a little over three years ago.

ARRINGTON: Are you profitable now?

ALLAIRE: We started generating cash in 2009.

ARRINGTON: OK.

ALLAIRE: And we still have a very, very healthy balance sheet, so we’re in a very good place on that front.

ARRINGTON: Yeah. What’s your cash position right now?

ALLAIRE: We’re not gonna tell you what the cash position is, but it’s quite substantial around this until the last…

ARRINGTON: Sometimes start-ups will say how much money they have left in the bank though. I mean…

ALLAIRE: Yeah.

ARRINGTON: It’s not crazy to do that.

ALLAIRE: No. We have a lot of cash that’s letting us invest and look at acquisitions, things like that, but…

ARRINGTON: So your customers are paying you…

ALLAIRE: Yeah.

ARRINGTON: To basically host their video, give them the tools for the player, all the tools for that.

ALLAIRE: Yeah.

ARRINGTON: Ad advertising.

ALLAIRE: Yeah, all the – everything that you need in an online video, basically.

ARRINGTON: Yeah.

ALLAIRE: From publishing and content management, advertising, analytics, social media integration, making a great experience.

ARRINGTON: And how do you charge? – do you charge for bandwidth, do you charge for the set up, do you…

ALLAIRE: Sure.

ARRINGTON: What’s your relation with the…

ALLAIRE: It’s a software subscription model.

ARRINGTON: Yeah.

ALLAIRE: And we have – actually, the last couple months ago, we launched the Brightcove Express.

ARRINGTON: Yeah.

ALLAIRE: Which is a $99 product.

ARRINGTON: Yeah.

ALLAIRE: And it’s doing extremely well. So there’s – it appears to be a really sizable market of smaller projects and small, medium businesses that also want to do this. We have a lot of customers.

ARRINGTON: What do they get for the $99?

ALLAIRE: They get basically the full tool set that, you know, maybe three years ago, people would have spent $30,000 on, so it’s – we’re really trying to, you know, in some ways, commoditize the market.

ARRINGTON: Yeah.

ALLAIRE: And that’s going well, but they get the full tool set and they get a certain amount of capacity so they can have like a library of videos of a certain size. If they need more, they can move up to $199 and $499.

ALLAIRE: And then included capacity for delivering that to people. And then you know, it goes up to people who spend, you know, more than seven figures a year with us.

ARRINGTON: OK. And so Time magazine – we’re sitting here with the Time writer, Barbara. They’re one of your customers.

ALLAIRE: Time Inc. Yeah.

ARRINGTON: Time Inc., they do all of their video through you.

ALLAIRE: Yes. So a lot of magazine companies work with us. Time Inc., People , and Time and InStyle and major brands – producing more and more video and have an integrated experience on their site and that’s…

ARRINGTON: And how do you charge them? Is that a six, seven-figure deal a year?

ALLAIRE: Most medium to large media companies are six-figure per year licenses.

ARRINGTON: And what do they get for that? Just because they’ll pay, you charge them more or do you…

ALLAIRE: No, no. Pricing is a lot like – you know, the pricing on the service is like Omniture or Double Click where it’s really based on the scale of traffic usage.

ARRINGTON: Yeah.

ALLAIRE: So there’s an annual fee, which is sort of the features you get and there’s a capacity that people pay for. So you know, someone who is doing, you know, hundreds of millions of video views needs more capacity and is getting more value out of our services as well. So we have the pricing that moves up for that.

ARRINGTON: Are you going to get out of Boston at some point? Because not many startups are left there, right? You are one of the only ones.

ALLAIRE: Well, we’re trying to build a great company in Boston, actually.

ARRINGTON: You like Boston?

ALLAIRE: I do, yeah. It’s actually proven to be a very good place for us to recruit and – I mean, we have offices all over…

ARRINGTON: Have you finished that whatever thing they’re building?

ALLAIRE: The Big Dig. Yeah, totally.

ARRINGTON: I mean, that’s done now?

ALLAIRE: It’s done. Life is good.

ARRINGTON: And so traffic is a little easier now.

ALLAIRE: That’s kind of the key.

ARRINGTON: Yeah.

ALLAIRE: Yeah.

ARRINGTON: And there’s a good month or two here, the weather is reasonable, right?

ARRINGTON: I guess people work harder if they don’t have anything to do outside.

ALLAIRE: That’s pretty good.

ARRINGTON: So what happens to your company? Are you going to go public at some point or possibly…

ALLAIRE: We’re definitely focused on being global, independent, and that’s the path we’re on.

ARRINGTON: What happened to Maven? Yahoo! bought them and then just…

ALLAIRE: It’s gone. Yeah.

ARRINGTON: What was that all about? They paid about a hundred something.

ALLAIRE: Yeah. 160, 170 million.

ARRINGTON: And then – and then Maven was a competitor, right?

ALLAIRE: Yeah, yeah.

ARRINGTON: And they just shut it down.

ALLAIRE: Yeah. Well, I think…

ARRINGTON: Did you get any of their customers?

ALLAIRE: Most of them, yes.

ARRINGTON: And then what about Ooyala? They’re like an upstart, they do things -how do they do things that are different from you? They charge only for bandwidth. Is that right?

ALLAIRE: No. I think they’re pricing is a little bit different. They try and charge for both software and bandwidth, kind of mix those together. I think, you know, they’re – I think they have good products. They’re definitely a good business in this market.

ARRINGTON: Yeah.

ALLAIRE: You know, they’ve grown over the last year.

ARRINGTON: But you’re going to crush them.

ALLAIRE: I think we’re doing a very good job remaining the top company in this market.

ARRINGTON: And then who else… didn’t Juice say they were going to get into this business?

ALLAIRE: There’s a lot of failed companies that have tried to morph into technology services businesses, not with much success at all. So I don’t see a lot of them, but yeah.

ARRINGTON: Anything else you want to tell me that’s, you know, news worthy coming up. You’re done raising money for now…

ALLAIRE: Yeah.

ARRINGTON: You bought anyone, you’re buying someone…

ALLAIRE: Well, I’ll tell you. The online video ecosystem, there’s a lot of interesting stuff happening. And as we look at what we do as a very horizontal platform, we’re always looking to say and see, you know, what are the natural things that will be part of it, so we’re definitely looking at opportunities to expand into new products and possibly do acquisitions as well.

ARRINGTON: Jeremy, thanks very much.

ALLAIRE: Thank you, Michael.