The State of Enterprise Video 2015
Outside of the very big players such as AOL, Yahoo, and Google, there will be a large number of businesses looking for ways to monetise content, and this is where the OVPs which have suitable solutions are looking to flourish.
Like its competitors, Brightcove was in the acquisition market again. This time, the goal was to help build upon its platform to offer an end-to-end solution around this potentially lucrative advertising need. In January, Brightcove purchased Unicorn Media; Unicorn Media’s Once product dynamically stitches targeted ads into video content in the cloud. This enables Brightcove to offer a more complete end-to-end solution for clients looking to monetise content with advertising.
Having fully integrated its previous acquisition from 2012, Zencoder, into its offering, Brightcove announced an extension to the product to support formats that are essential for TV delivery for European broadcasters. This makes Brightcove more attractive to media owners by reducing the workflow complexity for both transcoding and ad insertion.
It was not all good news in 2014 for Brightcove, as its share price performed poorly in its second year as a public company. A more positive results outlook has recently boosted the share price, but the company is still only giving hints that it will be profitable again at some point, with no timetable set for reaching profitability and a reported loss of $3.1 million in the third quarter of 2014. There is still positive outlook for Brightcove, however, as its 22.8 percent share of the global market makes it the biggest OVP.
Kaltura, in contrast to the other large platforms, was the only one of the four top OVPs to make no acquisitions in 2014. It did, however, secure an additional $47 million of funding, which is being used to accelerate product development and extend operations into Brazil, Mexico, China, Japan, Australia, Singapore, and Korea. International expansion is key to all of the OVPs, as the total market was estimated to be $369.4 million in 2013 and to reach $800.2 million by 2019. For the OVP platforms to become profitable, it is essential that they capture as much of the global market as possible.
Kaltura looked to add value by expanding its range of products and adding new functionality to the existing ones as a way of offering further enhancements to its end-to-end solutions.
The major product launch was MediaGo, a platform aimed primarily at the growing number of media owners who want to easily be able to roll out a customisable end-to-end video platform. The “Netf lix-in-a-box” solution, as Kaltura describes it, is designed to enable media owners to quickly set up and deliver ad-based and subscription video services without having to invest in new infrastructure.
On the corporate side, Kaltura announced new integrations of its CorporateTube internal video portal with IBM Connections and Jive. This additional integration widened the market for corporate end-to-end solutions.
Qumu joined the acquisition trail in 2014, acquiring U.K. company Kulu Valley for $15 million. The company supplies customers with tools to create video presentations. It has around 80 customers, mostly in Europe, and in the 12 months leading up to June 30, 2014, it produced a $5.5 million profit.
With its acquisition of Kulu Valley, Qumu has been able to expand its offering to include content creation in addition to content management and delilvery.
Besides adding to Qumu’s video creation tools, the acquisition brings cloud content management and delivery to the Qumu product set. Kulu Valley has already been rebranded Qumu Cloud and partially integrated into the Qumu product set. The new product line is able to appeal to a wider range of corporate customers by offering a lower price point for the basic products.
The president and CEO of Qumu, Sherman Black, said at the time of the acquisition, “The addition of Kulu Valley has significantly enhanced our already solid position as a leader in the growing enterprise video market. Kulu Valley’s strength in cloud-based video content creation is complementary with Qumu’s strengths in enterprise video content management and delivery. Kulu Valley’s product line and sales model offers a lower price point for entry and allows us to pursue a wider range of customers with shorter sales cycles, while our legacy product line provides a broader solution for Kulu Valley customers.”
Larger OVP companies’ investment in developing end-to-end solutions for their target markets has made 2014 a year of consolidation. The fact that the top companies are employing similar strategies suggests that they all see the value of their products as inherent within the continual development of increased value for their customers, achieved through the creation of more packages of end-to-end solutions.
There are very different approaches as to how these end-to-end solutions are offered. Some, such as Kaltura and Panopto, look to cover more of the overall marketplace with products launching in new areas, whereas Ooyala is focusing on delivering to and dominating one particular sector. Alternatively, Brightcove and Qumu are trying to offer a complete workflow to the widest possible section of the market. Qumu, particularly with the Kulu Valley acquisition, is also looking to position itself as the choice for medium-sized companies as well.
So this has been a year of acquisition, and next year will likely see many of the big OVPs continuing down the acquisition trail to further build out their end-to-end solutions. Those who are trying to make live streaming a more compelling feature, as is the case with both Brightcove and Kaltura, could begin to acquire existing companies with live expertise, as Qumu did with Kulu Valley. This will enable them to offer professional services to drive the growth of live on the platforms, which will in turn enable large clients to grow in confidence in delivering their own live content.
As the market continues to grow it will be interesting to see if we suffer our first casualties in the middle and small tiers of the market, as the cost of keeping up with the larger OVPs takes its toll. The middle and small tier might be where we see the biggest number of acquisitions as platforms merge to gain bulk to be able to compete with the largest OVPS. This may be a very necessary step given the total size of the marketplace is potentially only $800 million globally by 2019. Even the large OVPs might find they can’t secure a big enough piece of the pie.
This article appears in the 2015 Streaming Media Europe Sourcebook as "The State of Enterprise Video."
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