Wednesday, August 24, 2011

Hulu Bids Due Today -- My Money Is On Yahoo!

I have written several times about Hulu -- and its current aspirations to be acquired. I have also given my thoughts to USA Today in separate recent interviews.

Well, today is judgment day -- final bids by suitors are apparently due today. Most believe that Amazon, Google, DirecTV and Yahoo! are likely to enter the fray.

But, all things being generally equal (especially price), my money is on Yahoo! Yahoo! is most in need of a big win -- and it likely sees Hulu as the most visible immediate "story" in that regard. After all, next to Netflix, Hulu is widely considered to be "the next best thing" (although, a distant cousin). And, importantly, Hulu's big media investors likely are less threatened with the notion of Yahoo! pulling the strings. Amazon and Google are scary powerful industry behemoths (in their eyes), and DirecTV is less familiar to them.

If Yahoo! is willing to pony up -- many believe the winning price tag may be a few billion dollars -- then it will be Hulu's proud owner. But, be careful what you wish for -- media companies already have significantly pulled back overall premium television offerings key to Hulu's future growth.

Brightcove Files for Its Inevitable IPO -- After All, What Else Is OVP's Grand-daddy to Do?

In the "Surprise, Surprise ... well not!" department, the online video platform (OVP) market's grand-daddy of them all, Brightcove, has finally filed to go public. The company's IPO filing indicates it plans to raise $50 million.

Here's the interesting part -- as part of its filing, Brightcove, of course, had to finally reveal to the world its true financial state. And, as expected to me -- but certainly likely a surprise to many in the digerati -- Brightcove generates lower revenues than most believe and operates at significant loss. What are these numbers? On the revenue side, Brightcove is on track to finish the year likely at about $60 million (based on first half of the year numbers), and the company is on track to lose about $20 million (based on first half of the year numbers). Here's the further thing -- the company does not expect to be profitable until the end of 2012 -- yes, 2012.

Listen, I like and respect Brightcove a great deal. They absolutely are leaders in the overall video eco-system. But, those are challenging numbers with which to file for an IPO (in my humble opinion), and the times right now aren't exactly great to go public. But, let's face it, an IPO likely is the only realistic liquidity option for Brightcove investors, since it would be challenging to find a buyer to pay the high price necessary to give a meaningful return for Brightcove investors. The company, after all, has raised nearly $100 million. And, of course, it continues to burn significant cash due to its extremely aggressive land grab for global dominance.

Having said that, the overall market for OVP-type services is still in its early early innings. We too play in that space -- and are strong believers. Our difference, however, is that we are not strictly an OVP. Our OVP offering -- Sorenson 360 -- is primarily one component of many that is part of our overall enterprise-focused video workflow solutions. We believe that an OVP offering alone is a tough sell in the long-run.