Posts Tagged ‘ooyala’

The first half of 2010 has proven a few of us wrong. There were predictions made at the end of last year that this would be the defining year for Online Video Platforms, that we’d see strong growth and maturity followed by a shakeout. Some of this has indeed happened, mind you, but not to the degree some of us thought. With over 80 OVPs tracked in the VidCompare database there has certainly been no shortage of growth in the space but the maturity has been a bit slower as has been the shakeout.

With regards to maturity in the space, there needs to be a better understanding of online business’ pain-points and attention to their use cases to show real maturity in my opinion. Some are starting to specialize by honing in on key aspects of their business in an attempt to not only address the needs of online enterprises but also to set themselves apart from the masses. Clearly Ooyala is playing the monetization and analytics card, Unicorn Media and Twistage focusing on  ”workflow” management, Wistia on internal training and behind the firewall solutions, Veeple on interactive video specifically for eLearning, and ProVDN on videographer tools.

And the shakeout has begun but certainly not to the extent as some of us previously thought it would. Kit Digital has been on a buying spree acquiring theFeedroom, and Multicast as well as a few other non-OVPs. SesameVault put themselves on eBay, Motionbox assets were acquired by Shutterfly, and most recently Delve was bought by LimeLight Networks. What’s disconcerting is the fact that this past quarter only one OVP received VC funding (Brightcove) and the acquisitions that have taken place have been at losses. Indeed, the second half of the year is perhaps living up to our 2010 predictions but I’d rather be wrong then to see companies earning less than what they’ve taken in investment. Delve sold for an undisclosed sum but sources close to the deal say it was worth $4 million (cash + stock) which is unfortunately far less than the $10 million invested in the company meaning very few people made any money from the deal.

In the two months since leaving Fliqz, Inc. I’ve had some very interesting conversations with OVP CEOs and upper management about the space and how they plan to weather the next few quarters. Some are looking for an exit of some kind, I know of at least 7 OVPs whom are actively looking for an acquirer. But the market for acquisitions is ugly at best and the CEOs I’ve spoken to on the other side of the coin are looking to pick up technology and/or customers for pennies on the dollar or just straight stock. Other OVPs are planning to place their bets tangentially (within video but not on the OVP itself) for the time being while things shakeout in the platform space stating that there was just too much early growth and investment leading to crowding and a lack of standardization causing confusion among users and lack of focus amongst providers.

There’s no doubt the VidCompare directory with thin over the next 3-4 quarters as the space better defines itself, standards come to fruition, lesser platforms get bought or go out of business, and diversification occurs. My guess is the 80 OVPs we’re tracking today will trim down to roughly 55 or so in the coming quarters. But for the time being it’s a bit of a frenzy as platform providers roll out new services left and right simply to say “we do this” and “we do that” just like the other guy. HTML5, mobile, geolocation, and iPad are all buzzwords that competing platforms make announcements about every other day. This focus on table stakes just isn’t proving to be a winning strategy and until we see more competitive advantages in the form of ground-breaking, niche solutions then last December’s predictions will certainly continue to play out.