|Jeremy Allaire's Brightcove is launching a consumer-facing video portal with thousands of professionally and semiprofessionally made videos.|
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That's a bold prediction for an unpredictable marketing world, but it'd be a brave man who'd bet against Jeremy Allaire's Brightcove becoming a media powerhouse to rival any out there. Just today the company, which raised a humble $32 million in series B funding a year ago from the likes of AOL, IAC Corp., Hearst and Allen & Co., launches a consumer-facing video portal, complete with thousands of professionally and semiprofessionally made videos, an ad network, a distribution deal with AOL, and an e-commerce portal.
Fully licensed content
The specifics of each of those products aside, however, here's what you need to know: Major media and entertainment content owners -- including movie studios, almost every leading music company, the Big Four broadcasters, cablers and a host of the country's leading publishers -- have made or are poised to make Brightcove their broadband-video-distribution and monetization platform of choice. And unlike, say, YouTube, Brightcove's model from the get-go incorporated fully licensed content from these players, and doesn't rely heavily on the long-tail of consumer-posts.
Mr. Allaire, who founded Brightcove in 2004 after spending the better part of a decade helping to turn Flash into a ubiquitous web application at the CTO for Macromedia, has always wanted to create something "disruptive" that would truly enable anyone, anywhere to challenge the media companies. So it is ironic that, while Brightcove's offerings are certainly designed, a la YouTube, to allow anyone to publish broadband-video content, they also dovetail with many existing media companies' models. For example, allowing them to use their sales teams to sell ads against their broadband offerings, or allowing them to offer their video content for syndication to anyone who wants it through a simple "click of a button" type tool.
Brightcove offers a marketplace where media owners can syndicate their content to affiliates across the web, a flexible ad model that lets publishers sell their own advertising or, starting today, use a Brightcove ad network and e-commerce solutions. When content is syndicated, the distributor, media owner and Brightcove all get a cut of the ad revenue. If Natpe and Mipcom are the real-world syndication markets, Brightcove aims to be a self-service replication of their offerings.
Evan Fleischer, director-marketing and promotions at the Rainbow Media-owned IFC, said the model is a practical one for his small cable network. "Syndication is what's going to make or break companies like IFC," he said. "We can't all be YouTube. We can't all be MySpace. ... Brightcove's a mirror of how we work in cable industry. We provide content to [cable operators], they send that content out."
He's not the only one feeling a level of comfort with the Brightcove model. Discovery, Sony BMG, Dow Jones, Reuters and Warner Bros. have already made it a cornerstone of their online video plays.
Make media owners comfortable
The way to make media owners comfortable is to give them control over "how the content is branded and the user experience, where distribution takes place and who can syndicate it and monetization -- how they price it for download, how they sell ads around it," Mr. Allaire said.
"It's increasingly clear in a market dominated by YouTube and its focus very much on consumer-generated content, there's also a big emerging opportunity with semiprofessional and professional media companies that might not have the scale or expertise to build a self-made online-video initiative," said Joe Laszlo, senior analyst at Jupiter Research.
Lee Westerfield, an analyst with BMO Capital Markets, has been following web 2.0 companies and thinks whoever figures out how to reaggregate the splintered audiences will be a big winner. "Fragmenting or sliver-casting on the web breaks apart the idea of mass media for general-market brands," he said. "But consumer brands need to impact large audiences with impressions. Companies that can put the pieces of that broken eggshell back together stand to gain."
And that's exactly what Brightcove aims to do. "In a traditional world you basically have these companies that aggregate content but you might think of Brightcove as aggregating audiences," said Jeff Marshall, senior VP-managing director of Starcom IP.
Of course, there are lots of broadband video enablers chasing content creators and an audience. And the other big questions are: How much money can media make from the model? Will major media companies decide to create their own broadband technology in-house rather than pay companies such as Brightcove a fee or a cut of ad revenue? Along with Brightcove, other broadband-solutions companies such as Roo, Maven Networks, Permission TV and Narrowstep are chasing medium-to-large content creators, and companies such as Revver and, of course, YouTube, are chasing the prosumer and consumer, respectively.
"There's going to be so much slicing and dicing," said Mitch Oscar, exec VP- Carat Digital. Asks Jupiter's Mr. Laszlo: "How big is the advertising pot going to be and when all these people take their slices out of it is it enough for a content creator to make a real business?"
Mr. Allaire thinks that's a no-brainer: While the online-video business isn't a great one yet, it will be. According to BMO, broadband video will be a $3.3 billion market by 2009, and paid online video will be a $3.5 billion business. "There's no question that we're out-innovating media companies in creating platforms for distributing TV on the internet," Mr. Allaire said. "The question is: What's the core competency of a media company? To put birds in the sky or lay fiber optic cables or create and brand content?"