Deal Radar 2008: Brightcove

Brightcove is an online video publishing company that lets users—both established media networks and independent content makers—monetize their content through ad revenues. It was founded in 2004 by Jeremy Allaire, who is now CEO.

Brightcove offers content makers two distribution methods: content can either be placed on blogs and websites free of charge to increase their reach and traffic, or it can be licensed to be used the way the buyer wants it. The company gives content makers complete control over the branding of their content. Brightcove can be used to create and publish videos, podcasts, audio and slideshows.

The ad revenue system, like the distribution system, is based on two options. Content makers can pay a fee and place ads on their own, or they can allow Brightcove to place ads and split the revenues. In 2007, the company chose Tremor Media as its primary ad partner. Customers’ ads— which should be 15 seconds or less—will be sold by Tremor and targeted by category or on a custom channel basis.

Brightcove is working with a variety of media companies including Reuters, Discovery Communications, Sony BMG, Warner Group and TiVo. In March 2006, the company acquired Seattle-based Metastories, makers of Storyteller, a publishing tool for video, audio, images and text.

The following year Brightcove benefited from a series of deals with print media companies, including Time Inc., Washingtonpost.com, Newsweek Interactive, Meredith Corporation, Nielsen Business Media, Reed Business Information, The Hearst Corporation, and National Geographic. In September 2007, Brightcove announced the launch of NYC TV on-demand, an Internet video channel. The channel features high quality clips from NYC TV’s Emmy Award-winning shows along with a high-speed search engine across neighborhoods and topics. Users have the ability to email clips to friends.

In May 2008, Brightcove partnered with Glam Media Inc. to boost Glam’s video content. The company has raised more than $90 million so far: $5.5 million in a Series A round of funding from Accel Partners and General Catalyst Partners; $16.2 million in a Series B round of funding from AOL, The Hearst Corporation, and IAC and another $5 million in Series B from GE Commercial Finance; and $59.5 million in a Series C round from Accel Partners, Allen & Company, AOL, Brookside Capital, The Hearst Corporation, IAC , Maverick Capital, New York Times Company and General Catalyst Partners. Brightcove entered the Japanese market in May 2008 with a new subsidiary called Brightcove KK. Part of the subsidiary was sold to raise another $4.9 million from Dentsu, J-Stream, Cyber Communications and Transcosmos Investments.

Brightcove recently announced the release of Brightcove 3, a completely rebuilt version of its service. It is in private beta stage at the moment; the commercial version will be released in the fall. The new version focuses on support for long-form video and includes a new publishing model and an improved user interface.

The company is one of the biggest video platforms for web publishers with 1.3 million monthly uniques on its own site, according to Quantcast. There is a lot more users on the partner sites using the product. But as Allaire admitted in an interview, his company has yet to make a profit. Let’s hope that Brightcove isn’t yet another multi-million dollar experiment like its competitors Joost and Videoegg, and the business model is sustainable.

This segment is a part in the series : Deal Radar 2008