Thursday, February 17, 2011

Where Have All the OVPs Gone, Long Time Passing ...

Online video platforms (OVPs) -- stand-alone SaaS-based hosted services targeting businesses that want to deliver video content to connected and mobile devices.

A little over one year ago -- at the San Jose, California Streaming Media West show in November 2009 -- the exhibition floor was littered with them. Seemingly scores of them. At that time, many of us suspected that, although the demand for video delivery would only accelerate on a massive scale, most of these VC-backed OVPs simply wouldn't make it. There simply was something in the air -- namely, dwindling cash in the bank. Many of these OVPs were running on fumes; no real revenues.

Fast forward to now, and that reality has hit home in a big big way. In a case a la "And Then There Were None" (although not as drastic as the Agatha Christie novel), the stand-alone business-focused OVP market has really come down to three players: (1) Brightcove (the granddaddy of them all -- and still the largest in terms of overall reach), (2) Ooyala (the Silicon Valley upstart darling that challenges Brightcove at every turn), and (3) Kaltura (the open-source focused contender that talks a good game). Heaps of cash have been poured into all 3 of these players -- $100 million into Brightcove, $50 million into Ooyala (including a recent $22 million round), and $20 more million just pumped into Kaltura (adding to its previous raises). These three stand-alone OVPs are in a massive land grab right now -- investing these hoards of cash to stake their claims.

Let's face it -- it is difficult for other stand-alone OVPs to compete with that kind of cash -- which buys you lots of sales people, lots of marketing, and lots of PR. That's why virtually no other stand-alone OVP rises above this din anymore. They simply aren't relevant. Previously, those others could make some noise. But, those voices have been largely squelched by market realities -- their VCs have seen the light; game over. I simply don't hear about them anymore.

In the immortal words of Pete Seeger (or close to them at least), "Where Have All the OVPs Gone ...?" Answer? Simply "Gone Baby Gone" (a great movie by the way -- check it out on Netflix.)

(IMPORTANT NOTE -- there are other relevant players in the market that operate OVP services; but these are not stand-alone OVPs where OVP services are essentially the only product line and revenue source. As an example, my company, Sorenson Media, operates its own highly successful managed video hosting and delivery solution -- Sorenson 360 -- but that is only one component of our overall enterprise-focused video solutions and overall business model; I recently wrote about who we are as a company -- and video encoding/transcoding is at our core. KIT Digital is another company that is relevant in this context, but KIT Digital is the industry's Pac Man, gobbling up a myriad of companies on the cheap and operating a growing number of services; the company just recently swallowed up 3 more companies. We, at Sorenson Media, don't consider stand-alone OVPs like Brightcove, Ooyala or Kaltura to be competitors -- in fact, we seem them as being potential partners. And, in my view, the jury is still out whether stand-alone OVPs like the "big 3" -- which essentially have a single-pronged business model -- can reach long-term profitability without diversifying; and, if they can't, it certainly is a stretch to believe any other stand-alone OVP [which is an animal near extinction] ever can. Brightcove, Ooyala and Kaltura have boatloads of cash, though, to try to figure it all out.)