Brightcove Aims at the Mainstream: Talking with CEO Jeremy Allaire
Tuesday brought two big pieces of news in the Internet video industry: The relaunch of New York-based Joost as a Hulu clone and the official launch of the newest video hosting platform from Cambridge, MA-based Brightcove. The former development was probably of more interest to consumers, who get an increasing portion of their video entertainment via Web-based platforms. But the latter is of more interest to content publishers, who are searching for news ways to lure these avid video consumers to their sites—and keep them there.
Though Brightcove is probably the largest and best-capitalized company supporting on-demand video services for business clients, it competes in an increasingly crowded marketplace. A short list of companies that help clients maintain Web video channels includes thePlatform, FeedRoom, Extend Media, PermissionTV, and Yahoo subsidiary Maven Networks. (The latter three are located right here in the Boston area—see our March 2008 story on the Greater Boston Internet Video Cluster.)
Perhaps that’s one reason the company felt compelled to rebuild its video hosting service from scratch, introducing a range of new features designed to make it easier for companies outside the big-media world to integrate video into their websites. Competition—and the prospect of bringing in new customers who couldn’t previously afford video hosting services—may also have prompted Brightcove to overhaul its pricing structure. At the low end, small- and medium-sized organizations can now tap into the Brightcove’s tools and services for under $10,000 a year.
Earlier this month I visited Brightcove’s offices in Kendall Square and got an hour-long overview of the company and its revamped platform from Jeremy Allaire, the founder and CEO. Allaire has a high profile in the technology communities on both coasts. With his brother JJ Allaire, he founded Newton, MA-based Allaire Corporation in 1995; that company built a Web development platform called ColdFusion that was later purchased by Macromedia. At Macromedia, Allaire helped to create the Flash format that is now the dominant video delivery technology underlying YouTube, Brightcove, and many other Web video services. Between Macromedia and Brightcove, Allaire was at Cambridge, MA-based General Catalyst, which became one of Brightcove’s biggest investors.
Allaire talks fast—so while the following interview transcript may seem long, I’ve actually edited it down drastically.
Xconomy: Before we talk about the new product release, can you give me an update on the company and its progress?
Jeremy Allaire: We’ve continued to have really great growth. Our focus for the last few years has been to work with professional media companies. We’ve now grown our footprint to several hundred major brands that use Brightcove for their online video, like Fox, CBS, Showtime, A&E, and the Discovery Channel. We’ve worked with every major national newspaper company, including the New York Times group, the Washington Post, Dow Jones, and a lot of regional news organizations like Boston.com and the San Jose Mercury News. We are also starting to see large companies like GM, DuPont, and Sun and political organizations such as the Obama campaign using our video platform.
We have 160 employees worldwide. Brightcove-powered sites get 135 million unique visitors every month. We’ve raised $91 million to date, so we have one of the largest capital foundations of any Web company in the Boston area. We had 5x growth last year, about 3x this year, and we expect to reach financial independence next year.
X: Explain how the company operates, and where your revenue comes from.
JA: We are a software-as-a-service company. We license use of our software service on an annual basis, and customers pay for the features of the software, and also pay based on how much customer traffic hits our systems. We ingest customer’s content and manage it inside Brightcove, and we wholesale CDN [content distribution network] infrastructure around the world and bundle it into our service.
X: Which CDNs do you work with?
JA: We work with many different networks, including Akamai, Limelight, Level 3, and others. The very large companies we service bring their own content distribution infrastructure, and we essentially push the content out to their existing infrastructure.
X: So what distinguishes a Brightcove from an Akamai? What services do you provide that Akamai couldn’t?
JA: There’s really a distinction between what I would call telecommunications or transit services, which is what Akamai and Limelight provide, and what we provide, which is a suite of business applications that can be used to operate an online video business—everything from production tools to publishing and content management tools to advertising systems and video analytics. But we integrate content distribution services into our offerings because the vast majority of out customers don’t really want to think about that.
X: Not to belabor the point, but Akamai, which is just down the street from you guys, is promoting a lot of services around broadband video delivery. Are they a competitor? Or might some type of Akamai-meets-Brightcove alliance be conceivable?
JA: Anything is possible. But major users of content distribution services often want to decouple their business applications from their telecom services. I’m certainly aware of Akamai trying to add different things to what they do, and it’s certainly something we keep an eye on, but [competition with Akamai] is not something we’re seeing in the customer segment we’re serving with a product like this.
X: So what prompted you to build this new platform?
JA: When we came out with the beta of our first platform in 2005, online video was an experiment that a few media companies were trying, but generally it was completely new. Over the next three years, we’ve seen online video, as a business within the media industry, become pervasive. Virtually every media business has a video component to their online strategy. So a lot of what we’ve focused on in the last year as we’ve worked on Brightcove 3 is what’s going to drive value for media companies.
The second thing that is an emerging trend is that we are starting to see organizations beyond the early adopters starting to use video. If you think about it, every professional institution in the world, whether it’s a small business, a college or university, a government agency, a non-profit, et cetera, already uses the Web as a communications platform, mostly for text and photo content. But the production cost of video has continued to plummet, making it viable for all industries to use as part of their communications strategy. That suggests to us that the overall market opportunity for online video platforms is much broader.
So we have been thinking very hard about how do we create a product line that is accessible to and useful to all of these other types of organizations around the world. Our vision is to move from the early adopters up the curve into the mainstream users.
X: But when you talk about the mainstream, you’re not talking about the typical person who might post a file from their videocam to YouTube, right?
JA: When I say mainstream, I’m not thinking of individuals, I’m thinking of institutions. For example, government agencies where a key part of what they do is public communication. Or B2C companies like automotive or e-commerce companies that already use the Web as part of their marketing initiatives. Or universities using rich media to deliver the educational product to students. It’s about making [the Brightcove platform] accessible to them from an economic perspective, and making it easy for them to get going.
X: How big of an overhaul does Brightcove 3 represent?
JA: It’s the first time we’ve redesigned what we do from the ground up. It’s a very significant evolution, and by far the largest R&D investment we’ve had in the history of the company.
JA: The first big theme is centered on what we’re calling custom player experiences. What we have found is that there’s an enormous range or diversity of how people want to express video experiences, but the bar is currently way too high to do that in a customized way. It requires a very advanced, expensive, and rare skill set in a Flash designer/engineer to do that. So one of the things we did was we crated this entirely new framework for how video player experiences can be created.
We’ve come up with something called Brightcove Studio, which is the set of applications a customer would use. The studio provides templates which can have their own branding applied to them. To facilitate richer experiences we’ve created a new XML format for customizing these video player experiences—we call it BEML, the Brightcove Experience Markup Language. It’s something an HTML-level designer can use really easily.
The XML code defines the layout and core styling and prebuilt components for the video experiences. Web designers can cut and paste this code into our browser-based, rich Internet application and assemble things like video windows with playlists and social sharing tools very quickly.
We ship, out of the box, a whole bunch of pre-built templates, but you can go in and tweak and modify them, and there is a whole developer center that is full of downloadable examples and educational materials for how to get started with that.
X: What kinds of features can you add to a template?
JA: We include the most common use cases like e-mail sharing, blogging tools, “post video to blog” tools for grabbing the embed code, RSS feeds. We also include things like automatically showing related videos.
Another piece of all this is the extended ecosystem—we’re making Brightcove 3 compatible with third-party-created components. Both this simple experience language and the third-party “pluggability” are completely new to the industry; nobody is doing anything like this today. So we are very excited about it.
The next key piece of Brightcove 3 is what we’re calling contextual publishing. This is a really big evolution in how our service works. For the most part, the way publishers have used online video is they’ve put it all in a separate video section of their sites. But what we’ve learned over the past few years is that video thrives more if it’s much more integrated into a website. And there have been some great techniques developed about how to present, in the context of a video, other relevant content that can entice the user to go and do the next thing. YouTube is the master of this.
So you’ve got the video player experience, and then you’ve got all of this usage data about the video. We’ve surfaced that data much more clearly in Brightcove 3, so that Web developers can dynamically integrate information about video into their sites in real-time fashion. You might have a view showing what content is most related, or most recent, or most popular. It’s all about driving more page views and increasing time spent on your site.
The third big piece that’s new is the high-quality media. The quality and length of the video content available on the Web is increasing. For that, we’ve created a new capability called Brightcove Dynamic Delivery. The goal is to make it much easier for content publishers to offer video at the highest quality possible, up to HD quality, and for long-form videos. Say you shoot a video with an HD camera. You can drop it into our system and we’ll generate many different versions, from the low-end mobile version to the HD version that would work on a cable modem. We then optimize the video stream on the fly based on the quality of the network connection.
We’ve also updated our ad products to introduce a new set of ad formats that are designed to work with long-form content. So you can have breaks in videos with interactive Flash experiences, for example.
Another big new thing with Brightcove 3 is the new way we’re packaging the service for the marketplace. We’re pricing it in three tiers—“basic” for small businesses and small media outfits, with a core set of capabilities that are quite powerful. “Pro” is aimed at medium to large media companies and adds a lot of capabilities that are important to them. “Enterprise” is really for large corporations and media conglomerates that are going to use this across lots of divisions and properties.
The really exciting thing here is that with Brightcove 3 Basic, we are going to introduce a price point that is affordable to a mass market of professional websites. We’re talking about four figures per year.
X: Some websites such as Fox’s Beliefnet have been using Brightcove 3 for a while — so what’s the actual news this month?
JA: We’ve had Brightcove 3 in a closed beta, or pieces of it, since last winter. On October 14 we will launch it commercially. Showtime rolled out a complete implementation of their video site using the beta, so people knew that Brightcove 3 was coming, and we’ve talked a little bit about the things people are doing. But the details around it have not been public until now. Also, several big brands are launching video features based on Brightcove 3, including Comcast, Fearnet, Rainbow Media, and AMC.
X: What about people using earlier versions of your platform? Will they have to switch over?
JA: Anything people are operating with the existing Brightcove service will continue to operate. They can migrate over to the new framework at their own pace. All new customers starting this quarter will just have access to Brightcove 3.