Extend Media Expands Video Delivery Options for Cable Providers—But Will They Bite Fast Enough to Stop Defections?

4/9/09Follow @wroush

Last month I connected by phone with Extend Media‘s founder and president Keith Kocho. At the time, Kocho was sole leader of the Boston-based startup, which makes video management software for media companies. Given that Extend specializes in delivering video content across multiple platforms—over the broadband Internet to PCs, over traditional cable networks to TV sets, and over wireless networks to mobile phones—Kocho keeps a close eye on the tumult in the video entertainment industry, and I wanted to get his take on where things are heading and where the business opportunities lie.

As it happens, Extend generated some news shortly after my interview with Kocho. The company hired a CEO, a former venture partner from Menlo Park, CA-based Blue Run Ventures named Tom MacIsaac. Before his spin in the venture world MacIsaac led an Internet video infrastructure provider called Lightningcast, which was acquired by AOL in 2006. His experience working with content owners and distributors such as Comcast, Hulu, Time Warner Cable, and Verizon should serve him well at Extend, which has supplied its OpenCASE multi-platform video delivery software to AT&T, Bell Canada, and a few other big customers, but is looking to sell the system to more types of media organizations in more countries around the world.

Kocho, a Canadian expat, remains as president of Extend, which is funded by Venrock Associates, Atlas Venture, and TVM Capital and just collected a $10 million Series C round in December, bringing its total funding to more than $30 million. He’s been a voice of optimism in the industry, predicting that the economic downturn might actually translate into a boost for digital video providers as consumers look for free, advertising-supported entertainment. But in our conversation we focused mostly on the challenges faced by traditional cable and satellite TV providers as their customers become aware of the exploding options for accessing video on the Internet and their mobile devices. Extend has some cool technology that could help cable companies give their subscribers compelling reasons to stay—but nobody, including Kocho, can predict whether they’ll adopt it fast enough to stop the bleeding. Here’s an edited version of our talk:

Xconomy: There were some interesting statistics from Nielsen recently. They found that among people who watch video on their mobile devices, the average amount of time spent was nearly four hours per month. That’s one of the trends that Extend Media is trying to position itself to support, is it not?

Keith Kocho: The notion of mobile access to content on the “third screen” is definitely a consistent and growing trend. But whether or not it is specifically mobile phones, and in particular whether the content is streamed to mobile phones over existing carrier networks, is really a question at the moment. We are definitely seeing uptake in our customers supporting this class of devices. But the primary way for consumers to get content on those devices is local sync, which is increasingly accomplished via Wi-Fi. My son is a good example. He’s got an iPod Touch, and he’s constantly watching video on the thing, but all of that is streamed over our local Wi-Fi network. I think that’s quite consistent with what we’re seeing. From a carrier perspective, it’s much more cost-effective and scalable to get this rich media into the home or the workplace via a terrestrial broadband network and deliver it via some kind of hub device.

We see mobility happening in two ways. One is just the vanilla, “Hey, would you like to take this content with you on your commute?” or whatever. The second is application switching—the transience of how you’re viewing the content. Being able to stop viewing a program on the big screen and pick it up on the mobile phone when you leave the house—those kinds of things are the areas where we’re seeing a great deal of traction with providers. In the world going forward, everyone is going to have the same content; they’ll all be trying to provide it in the highest quality possible, up to high-definition; and they will all have to deal with the same available bandwidth. So the way you pitch it to consumers is by allowing them to use “sticky” platforms that go across devices. That’s the way you differentiate.

X: So I’m assuming that this device-switching is one of the things Extend’s technology enables.

KK: This is one class of features our technology provides—that multi screen experience. There is a bunch of sophistication on the back end required to make that possible, not the least of which is that the delivery mode might be different from device to device—it might be streamed, downloaded, or cached. Also, there’s the notion of linking the status or state of your viewing experience with your profile, and within your profile is a set of devices that we already know the characteristics of; it’s a bookmarking function that we use to maintain the state of the asset you are using as you go to another device.

We’re heading into a world where to be able to market yourself effectively to sophisticated consumers, these features are things [cable or satellite companies] must have. They have to have ways to serve the same content across all three screens [TVs, PCs, and mobile devices]. What the providers don’t want to have happen is … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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