This is a post that should be appearing in Om Malik's Broadbandblog shortly.
Allaire’s new company, Brightcove, has
launched to some pretty good press. And
while the company has not yet released its product (it actually just released
the Website, the product should be following later this year), people seem to
like the general concept. But what is
the general concept? From what I’ve read
there is actually some pretty solid disagreement about what it is that Jeremy
is doing over at Biogen alley. It must
be frustrating to stay on message and yet have so many miss the point, but explaining
what Brightcove is doing is actually relatively difficult. So I’ll take another shot and Jeremy can tell
me where I’m just plain missing the boat.
What Brightcove is….essentially…
Brightcove is an end-run distribution mechanism intended to utilize Internet-connected devices to bypass high-cost legacy distribution networks (aka cable and satellite) and provide an alternate low-cost delivery channel for niche video assets. (Did anyone actually parse that?) As blogging is to text communications and Podcasting to audio communications, “Brightcoving” would be to video communications. Call it democracy in video.
Essentially, Brightcove is betting on the “long tail” of video content and making the assumption that an increasing percentage of the video that consumers watch (read: TV, movies, Internet videos, etc.) will not come from traditional mass-market sources. They’re betting that consumers want to be producers occasionally and that this is actually a market that will make people money. They’re betting that the existing centralized distribution mechanisms are really poorly suited to serving up this content.
I think they’re
making a really good bet on all counts.
What is so confusing about that?
- Misunderstanding #1: Brightcove is like TiVo.
Well, not completely off-base, but kind of misleading. Brightcove has been compared to a lot of companies including TiVo, Akimbo, Dave Networks, Netflix, Amazon (I bet you liked that one, Jeremy), etc... Well, in my opinion, the closest analog IS probably Amazon. Brightcove is trying to create a content marketplace in which any consumer, advertiser, and producer can be matched intelligently with the relevant party resulting in a transaction being completed through Brightcove’s platform. Sound familiar? Dave Networks and Akimbo are similar, but unfortunately each had to invest significantly in hardware development due to the dearth of suitable end-use devices when they launched. (While this is not terminal, it’ll lead to a lot of consumer confusion.) Unlike TiVo, Brightcove is actually saying that the end-use device is irrelevant; we’ll deliver the content anywhere.
- Misunderstanding #2: Brightcove must integrate with lots of CE devices.
Brightcove is trying to get away with not having to
integrate directly with anyone. (Jobs
may never buy TiVo, but he might just break taboo and buy Brightcove at
some point.) Using Brightcove, consumers
will be able to search for relevant video content via a browser and, once
found, request that the content be downloaded/recorded on a device of their
choosing. The selected device could then
offer up the content through its own UI (likely by reading RSS metadata) and
decode the video using existing hardware/software. While not all devices will conform to the
same standards on Day 1, Brightcove should be able to adapt the content and the
feed to the requirements of most devices resulting in zero device-layer
- Misunderstanding #3: Brightcove is going to primarily deliver Indie films and other niche movies.
Well, yeah, Indie films are part of the story, along with other underserved markets such as high school football games, regional events, international TV, broadcast archives, and the like. But the real story is going to be in the cacophony of random stuff that people are going to begin producing in far greater quantities. Put a billion cellphones with HD-embedded camcorders into the hands of consumers worldwide and we’ll see the true nature of reality TV…
- Misunderstanding #4: Finding Brightcove’s niche content on your TV will suck.
TV is never going to be like the Web (or at least not anywhere in the near future). The diversity of available content is going to explode, sure, but people are not going to be sitting down in front of their TV with their up, down, left, right, and select button searching the universe for something interesting. It’s just too hard. Anyway, the point is that Brightcove’s model will work the same way as the iPod/iTunes model. Find stuff you want on your PC, download/record it on the device of your choosing (TV, laptop, cell phone, PSP, etc.), and select your shows from the short list on your device when you’re ready to vegetate.
Some clouds on the horizon…
I love the Brightcove business model; low barrier to entry, simplified consumer/producer participation, economic incentives for contribution to the network, etc... Assuming Brightcove can pull this product together and convey the message, they’ll do fine. But there are also some potential problems…
- Open Access? While Microsoft and TiVo appear largely willing and able to open their devices up to any content, the cable and satellite guys, and most likely the telco guys, are all going to be less generous with access in their “baby” proprietary networks. Given the potential for cab/sat/telco set-top boxes to become the primary gateway between the open Internet and the consumer’s TV, a lot of TV’s could initially be closed off to Jeremy’s content. However, standards such as Media RSS will eventually enable any appropriately formatted content asset to travel through a sanctioned aggregation point (like Yahoo!) and on to the end-use device, regardless of who owns the network. The cab/sat/telco guys would like to continue dictating what we can watch, but eventually consumers will make those decisions, or they will go elsewhere. But this creates a second problem…
- Open Standards? Open standards will help the market grow rapidly and drive increased participation in the overall community. However, the more prevalent open standards become the further Brightcove’s (existing) value propositions erode. If anyone can publish a video asset in a standard format (such as MPEG-4) and label it with a standard set of tags (such as Media RSS) and protect it with a standard DRM solution (such as WM9) then Brightcove’s main value proposition lies in the size of it’s network. If Yahoo! is cataloging any appropriately formatted RSS feed, then Brightcove will be hard pressed to aggregate a larger group of consumers than Yahoo! Same goes with the advertising network. Pretty soon, consumers begin to wonder why they’re using Brightcove to publish their content and Yahoo! to do everything else.
- Yawhoo? With Terry Semel at the helm, Yahoo!’s foray into entertainment has been aggressive. By forming tight relationships with distributors such as Comcast and SBC, Yahoo! is attempting to become a super-aggregator of rich media content. Recent deals to simulcast shows like “Fat Acress” with Showtime combined with their strong support for Media RSS standards should telegraph their aspirations. If they manage to tie up enough (potentially exclusive) arrangements with the old media goliaths, while simultaneously aggregating large quantities of niche media assets, they can scale the network quickly enough to make competing with them very expensive.
- How Fast? In order to participate in this market, you have to get in early. Unfortunately you also have to be ready to wait for the market to mature before you make a killing (just ask iFilm and Atom). How long is the delay from adolescence to maturity going to be? How do you aggregate consumers before you have lots of compelling content and without spending a fortune on advertising? It’s early and this evolution is not going to happen tomorrow. Jeremy had better not ramp things up too quickly with that $5.5MM, or I think he might find himself with a cost structure that’s unsustainable.
Brightcove’s vision is bold, and one that Jeremy probably needs to downplay a bit to make credible with some. I mean, really, he’s essentially attempting to blow up the existing broadcast TV and movie supply chains and replace them wholesale with something new and more efficient. Oddly enough, there are a few incumbents with billions in cash that have their own vision of the future (and those visions probably don’t include Brightcove operating the market and collecting a toll at every exit.). The only thing worse than pissing off one gorilla is pissing off ten.