This is a post that should be appearing in Om Malik's Broadbandblog shortly.
Jeremy
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
integration.
- 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.
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