Brightcove Sets Course
Gets $59.5M More To Expand Web Video Distributor
By Todd Spangler -- Multichannel News, 1/21/2007 7:00:00 PM
Internet TV distributor Brightcove has pulled down a $59.5 million round of private financing — a bundle the startup hopes will help propel it to YouTube-like renown.
Founder and CEO Jeremy Allaire said the company will use the latest funding in three main areas: to invest in its core content-syndication and programming business, to build new consumer-oriented services and to expand internationally.
“We’re still in a market-development mode,” he said.
Brightcove was founded in 2004 to provide content owners with tools to package and distribute TV and video programming online.
| Snapshot: Brightcove |
|---|
| A provider of software and services for content owners to manage and distribute video via the Internet |
| Source: Company reports |
| Employees: 110 |
| Major customers: Discovery Communications, Dow Jones & Co, Viacom’s MTV Networks, The New York Times, Reuters, Sony BMG Music Entertainment, Time Life, Warner Music Group |
| Funding to date: $82.5 million |
| Investors: Accel Partners, Allen & Co., Time Warner’s AOL, General Catalyst Partners, The Hearst Corp., IAC/InterActiveCorp., AllianceBernstein, Brookside Capital, Maverick Capital, The New York Times Co., Transcosmos Investments & Business Development |
TV DESTINATION
Then, last October, the startup repositioned Brightcove.com as an Internet-TV destination, stocked with video from its partners, which include Discovery Communications, Viacom’s MTV Networks, The New York Times, Sony BMG Music Entertainment and Warner Music Group.
Brightcove’s main competition for consumer eyeballs? Google’s YouTube, naturally, which claims to serve 100 million videos each day. “In terms of audience scale, YouTube is tremendous right now,” Allaire acknowledged.
To get to millions of views, Brightcove has something different up its sleeve. Allaire wouldn’t indicate what that is, but said: “It’s not more of the same. … We’re going to be expanding that consumer-facing product, in ways that are really exciting in how consumers can use media, while creating more value for our media partners.”
Allaire also said Brightcove’s business model is fundamentally different from that of YouTube and others. Whereas sites like YouTube and Revver.com are geared around sharing revenue with content contributors, Brightcove has created a “carriage” model for Internet TV that allows content owners to create and sell ad inventory.
“Rather than rely on consumers to pirate video, we’ve been working very closely with those companies to align how that content is distributed,” he said.
And unlike some other Web video players, Brightcove has a strategy to get content to TV sets. Through a deal with TiVo, some of Brightcove’s content partners — including the New York Times, NBC Universal’s iVillage, Reuters and National Lampoon — have made channels available to TiVo subscribers whose digital-video recorders are connected to the Internet. “These are channels that aren’t in broadcast or on cable, now available on a TV,” said Allaire.
Even so, Brightcove has now ripped a page from the YouTube playbook. In December, it launched a Consumer Media service that allows media owners or marketers to launch their own user-generated video offerings. “Our vision is, to build a broadband programming business, you need to combine syndicated or licensed programming with user-generated video,” Allaire said.
VIEWERS WANTED
Undoubtedly, Brightcove’s next big hurdle is getting people to click on the content it’s aggregating, said Will Richmond, president of consulting firm Broadband Directions, which focuses on Internet video.
“A marketplace is nothing if it doesn’t have both suppliers and buyers,” he said. “They’ve demonstrated they can get lots of media companies to work with Brightcove tools. The challenge now is to show they can bring an audience to all those channels.”
As for overseas operations, Allaire said Brightcove expects to launch into the United Kingdom, Japan and China.
“We’re getting pulled there,” he said. “It’s mostly about investing in people who are working with media partners and operating locally.”
Brightcove’s latest funding round was led by AllianceBernstein L.P., Brookside Capital LLC and Maverick Capital Ltd. Others involved were The New York Times Co., Transcosmos Investments & Business Development and all of the company’s previous investors.
The startup currently has 110 employees. Allaire expects to increase head count, but declined to provide a specific target.
Privately held Brightcove does not disclose financial information, but Allaire claimed annual revenue has grown in the triple digits. Bandwidth “is certainly a significant cost,” he said, although other major costs include those associated with business development and acquiring partners.
