Posts Tagged ‘Kit Digital’

More M&A in the Online Video Platform Space

The year has started out with a bang in the area of mergers and acquisitions in the online video platform (OVP) space. What many of us thought would occur last year, see 2010 Online Video Predictions, is now coming to fruition in 2011 first with Kit Digital’s purchase of not one, not two, but three online video companies in one fell swoop. On the last day of January Kit announced it’s acquisition of New York City-based KickApps, Paris-based Kewego, and San Francisco-based Kyte, for aggregate consideration of approximately US$77.2 million.

Today another OVP acquisition announcement is made, this time by VBrick purchasing the assets of veteran SaaS-based OVP Fliqz. VBrick is a dominant player in enterprise IP video offering live and on demand rich media experiences to over 9,000 corporate, education and government customers worldwide. Until now their focus has been largely B2B, concentrated on enabling businesses and government agencies with the ability to communicate internally via video, hold event broadcasts, and offer digital learning both inside and outside the firewall. I remember testing an early version of the VBrick IPTV solution back in 2003 when I was at CNET Networks.

Fliqz was one of the early OVPs (when the term OVP was popularized) to mass-market SaaS-based B2B2C video platform services bringing the notion of using online video for marketing purposes to the forefront of corporate online marketers. In fact, I helped build the first version of this solution with Benjamin Wayne, the founder and CEO of Fliqz when he hired me back in early 2007 (I left the company in June of last year). Fliqz made it easy for businesses to integrate online video into their websites with simple to use uploading, encoding, management, analytics, and playback video content tools.

In an interview with Doug Howard, CEO of VBrick I learned what they have planned for Fliqz and how they intent to integrate it with their VBoss solution to offer an all-in-one live and on demand video service which will appeal to a larger audience and further extend their reach with existing partners like Microsoft, HP, and IBM. I find the latter a particularly interesting opportunity for VBrick as they look at the OV longtail to address corporate needs to meld platforms together, offering a single point of presence for all video use cases. For example, adding value to existing tools like Mircrosoft’s Sharepoint by building online video directly into the service allowing users to access all forms of communication and collaboration in an all-in-one solution. 45 percent of VBrick’s revenue today is generated from existing customers expanding and adding SaaS services through VBoss and this new combined offering will allow VBrick parters to further sell into their Enterprise and SME channels.

In mid-2010, realizing their VBoss service could use a more robust On Demand feature set they began evaluating mid-tier OVPs with strong SME (small medium enterprise) offerings. Fliqz fit the bill providing a user friendly On Demand counterpart to VBrick’s already robust Live streaming solution. Doug summarized the strategic importance of the acquisition saying, “Fliqz jumped to the top of our list because of their strong presence in the SME space adding over 600 paid customers to our portfolio, as well as their ability to generate demand via an inbound sales strategy”, a sales impetus VBrick has wanted to focus on more closely. A third strategic imperative behind the Fliqz acquisition was their move from strictly infrastructure sales to marketing driven sales providing existing and new customers a multi-screen, unified system to communicate, collaborate, train, and market their brands ubiquitously.

VBrick will maintain Fliqz’s Emeryville office, further expanding their West Coast presence. Most of the Fliqz team will be integrated into the VBrick community and will be trained to sell a combined VBoss product that will offer both Live and On Demand video solutions. This is very good news for several existing and prospective Fliqz customers as Live streaming has been in high demand for several years, even while I was still at the company.

VBrick would not comment on the acquisition terms but did say that today they have 135 employees, are currently profitable generating $40 million a year in revenue, and will invest $1 million in Fliqz to integrate and help build out the existing product offering. They will continue on their acquisition path bulking up on SaaS-based video businesses as they push out Internationally starting with the UK, and expand their vertical markets into healthcare and others.

We expect to see further merger and acquisition activity in online video this year and will keep you posted on what it means for the industry. January and February have definitely set a trend pointing towards more focused and specialized business plans and product offerings. I look forward to more changes ahead.