News

Web Video Grows Up

10/31/2008 8:00 PM Eastern

The maturing Internet-TV infrastructure sector is now well beyond startup-land, as providers suit up for even bigger corporate jobs.

Time Warner's AOL unit last week said it will drop its homegrown video-management tools and instead use the hosted system developed by Brightcove, marking a shift toward the “buy” approach from the “build” one.

Separately, one of the biggest Internet content-delivery players, Akamai Technologies, doubled down on the category by announcing plans to roll out an adaptive video delivery service using Microsoft technology that will provide high-definition video online.

Brightcove's win with AOL appears to be its biggest to date, although terms of the deal weren't disclosed.

AOL will adopt the Brightcove video-management platform for its online video properties, including AOL Video and every publisher in the Web portal's network.

“Earlier in a market's lifecycle, the value chain is murky,” said Fred McIntyre, senior vice president at AOL in charge of video. “As this market matures, our dollar goes a little bit further with a partner like Brightcove … We think we're going to end up in a situation where we're going to be putting a better product in front of our users.”

AOL sites collectively represented the fifth-biggest video destination online for U.S. Internet users in July 2008 in terms of unique visitors, according to comScore, with 23 million users who watched 95 million video clips.

AOL is a Brightcove investor, having taken a minority stake in the startup in 2006.

McIntyre said the change will allow the company to deliver content and video players more efficiently than it could using its internally developed tools.

“We do know what the pain is, having built and operated these [video-management] systems for years,” he said. “There are frustrations in working with anything you own and operate.”

By outsourcing the video player and other functions to Brightcove, AOL can devote more resources to video search, which McIntyre said is “the cornerstone of our strategy.” AOL acquired video search engine Truveo in 2006, and its index now includes nearly 300 million video clips.

AOL has about 40,000 video assets in its library, which the company will begin to cut over to the Brightcove system in the first quarter of 2009. McIntyre said AOL plans to quickly introduce new players using Brightcove.

Brightcove, founded in 2004, recently introduced the third major iteration of its platform, with new features such as faster video-player loading and customizable templates.

Other media companies that use Brightcove include Discovery Communications, MTV Networks, Showtime Networks, Lifetime Networks, Cablevision Systems' Rainbow Media and Comcast's FearNet.com.

Meanwhile, Microsoft and Akamai are teaming up to enable what they claim will be “high-definition-quality” video on PCs, delivered over the Internet by way of Akamai's content-distribution network.

A beta release of Akamai's AdaptiveEdge Streaming service, based on Microsoft's Silverlight multimedia player, is scheduled to be available to select customers in early 2009. Silverlight is the software goliath's answer to the widely used Adobe Flash Player.

“This allows content providers to deliver stutter-free HD content, with a stream that will adapt to the best possible experience a consumer could have,” said Akamai chief strategist for digital media Tim Napoleon.

On the Web, anything less than TV-quality video “just doesn't make the grade anymore,” broadband video consultant Will Richmond said. “Especially in the HD era, premium video providers are recognizing that quality is king and as a result are accelerating their shift to more robust delivery infrastructure.”

The Akamai service will use a new Web server technology from Microsoft, called Internet Information Services 7.0 Smooth Streaming, which adapts the quality of the video stream in real time based on connectivity speeds. The Smooth Streaming server delivers video as HTTP-based files, instead of requiring dedicated video-streaming servers.

The Akamai-Microsoft offering will provide HD video at 720p (1280 by 720 resolution with at least 24 frames per second), which requires between 2 and 6 Mbps depending on compression techniques and content type, Napoleon said.

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