Well, it is now. This was an ALL CASH deal, as clarified in Brightcove's Q2 earnings call earlier this week (here is the full transcript of that call -- it is a fascinating read; I urge you to read it). Since Brightcove has about $58 million cash on its books as of the end of Q2, that means that Brightcove is using over half of its cash reserves to buy Zencoder. That's a pretty incredible number, when you think about it. That shows a tremendous amount of confidence that Zencoder can move the needle in a big way for Brightcove.
Certainly, investors cheered the news in a big way when the deal was announced late last week -- Brightcove's stock rocketed from below $14 to about $16.50 (but has since settled back to about where it was pre-announcement). But, having spoken with several industry insiders, I know that several are surprised by the terms of the transaction -- especially the fact that Brightcove used over 50% of its cash reserves to make it happen.
If nothing else, this deal underscores: (1) the increasing critical nature of video transcoding (Brightcove flagged this as its primary motivation to do this deal); (2) the continuing accelerated movement to cloud-based video workflows (this too was underscored); and (3) that even an online video expert like Brightcove looked outside of itself to bolster its video transcoding expertise, because transcoding is hard, hard, hard ....
3 comments:
It puzzles me that Sorenson Media does not see the potential that BrightCove sees in delivering a paid alternative to Youtube (and all the rest)
I initially thought Sorenson360 was the answer to my problem of finding a reliable encoding/transcoding/hosting solution, but as good as was it lacked the navigational controls I needed to be able to provide a neighbourohood gallery of video clips highlighting local shops, salon, professionals, etc.
Is Zencoder the expert at transcoding?
Or is Sorenson?
I thought it was Sorenson.
It's been over 2 years since 360 launched and although it seems awesome for delivering quality, secure distribution for the film industry, it won't do for my needs.
I've bugged everyone over there I can find (Except Mr, Sorenson) and I'm told my idea is a good one...but run along now, while we focus on what really matters.
Yes, we all can agree mobile delivery is important, but my thing is this: businesses do not want the hassle of 1) producing video, 2) hosting 3) or promoting it.
I know how to sell to this market. I've identified resources to make production quick and easy BUT I cannot go forward until I find a reliable hosting partner.
Peter, I'm begging for a discussion about this.
Someone is going to emerge as a leader in hosting/encoding/transcoding and my experience with BrightCove is they are not organized to do it right...I see buffering issues and fuzzy clips all the time.
Check out the design AND the live Brightcove Tabbed player when clicking the page (slow load), then call so we can talk...604-728-4693
www.mightygoodadvertising.com
Skype: herekittykitcar
email: charles2@webmail.us
Charles, thanks for your feedback. I fundamentally agree with you, but we -- just like any business -- can't do it all. We must focus our efforts/resources. 360 is a great product -- but, we don't view Brightcove as our competition (or target market for the most part). As you indicate, we are primarily focused -- to date -- on the production community with 360 (secure review and approval, among other things -- things no one else has). It is not that your ideas aren't good ones. We simply are focused on a different market segment for the most part right now with 360, although we do believe that it also serves broader needs beyond pure production.
That's a pretty incredible number, when you think about it. That shows a tremendous amount of confidence that Zencoder can move the needle in a big way for Brightcove. buy fast youtube views cheap
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