Last week in "Robust Ecosystem Promises that Online Video Will Keep Looking Better and Better," I briefly mentioned a company called Aspera in the last paragraph. Aspera has been on my radar for quite some time, as I've had many industry colleagues mention to me the company's key role in the online video work flow process. Last week I got a chance to talk to Francois Quereuil, director of marketing to learn more.
Aspera addresses a key - and growing - operational problem in the online video work flow process: the time-consuming and resource-intensive step of moving around large video files, whether internally or to third-parties. This step has grown increasingly onerous as the number of files to be moved has expanded due to multiple bit rate encodings and multiple syndication partners. Further, the shift to higher-quality, HD video files has also made the file sizes bigger than ever.
When the company was started 5 years ago, Aspera's co-founders' premise was that the traditional approach for moving files, primarily by using FTP ("File Transfer Protocol"), was inherently inefficient because it was optimized for text and used TCP, the underlying protocol that most Internet traffic relies on. Rather than trying to improve FTP or TCP as others have done, they instead designed their own protocol called "fasp" (Fast and Secure Access Protocol). By installing Aspera's fasp software at the file's send and receive points, large files can be sent over existing network infrastructure. fasp can send files 10 to 100s of times faster than FTP (there are charts here that show Aspera's tests).
Francois explained that Warner Bros. became Aspera's initial customer, and that now every studio, CDN, aggregator, post-production house and many content providers use Aspera. A perfect example customer is Apple, which uses Aspera to ingest most of the HD video content it now makes available in iTunes. The media industry now accounts for 70% of Aspera's revenue, though there are other industries with large files such as government and biotech, for whom Aspera is also very appealing. For example, the oil and gas industry sends seismic data files that are terabytes in size using Aspera.
From the core fasp innovation, Aspera has built out a suite of products, including a web browser plug-in that lets remote users quickly upload their video files, a console product that allows multiple facilities running fasp to be centrally monitored and controlled, and a collaborative solution that allows drag and drop distribution of files to various end-points. Aspera seems well positioned to grow alongside increasing file complexity; the only company focusing on the media industry with file transfer acceleration that I'm aware of (and that Francois noted as competition) is Signiant, which I first wrote about here.
Clearly Aspera has already had a significant impact on powering high-quality video transfers and distribution, but what may still be ahead for the company could be even more interesting. Francois and I discussed the possibility that Aspera software could make its way into consumer devices like set-top boxes, gaming consoles, smartphones, etc. The company is in discussions with device manufacturers and service providers, but it is clearly still very early.
Still, the prospect of having Aspera-enabled devices could create what I think of as a "super-premium" video service, enabling near-instantaneous video-on-demand downloads. For over-the-top service providers this could be a meaningful differentiator. For incumbents like cable operators Aspera could have significant benefits in creating premium revenue opportunities and also capex savings by not having to continually upgrade their networks to deliver faster speeds and more capacity. Francois explained that fasp co-exists well with TCP-based networks and is distance-independent; this suggests that such premium services could be offered to all cable subscribers, not just those in select areas, and also that they could be centrally managed.
Exciting as the consumer-facing opportunity is, for now Aspera is mainly focused on its bread-and-butter business of improving the efficiency of large file transfers that are becoming more and more prevalent. Aspera is another perfect example of how innovative technologies up and down the stack are laying the foundation for an all-broadband future.
What do you think? Post a comment now.
The press releases began flying today, timed with NAB's kickoff. Here are a few that caught my eye:
Move continues its fund-raising prowess, raising a large C round. As more content providers push the HD quality bar, Move's content delivery services have increased appeal.
Hulu, the NBC-Fox aggregator is using Signiant's media management platform to ingest content from the various content partners it works with.
For the first time Microsoft has used a third-party content security system to add a layer of protection for content providers using the company's new rich media plug-in.
Building on its recent launch of EZSearch and EZSEO to enable video discovery, EveryZing has introduced a management console for the products for which Cox Radio will be the first customer.
Live streaming gains further traction as Mogulus and Kulabyte announce deal to bring high-quality live Flash streaming to producers.
No doubt there will be plenty more over the next couple of days.
I am ever mindful of the old adage about "missing the forest for the trees" as I try daily to understand the often minor feature differences between competing vendors or the nuances of startups' market positioning. As we all know, when you get too close to something, it's quite easy to lose the larger perspective. So periodically I think it's essential to take a huge step back to try to identify the larger patterns or trends that crystallize from the daily frenzy of deals and announcements.
As a result, I've come to believe that recent industry activity points to an emerging and significant trend: the early formation of what I would term the "syndicated video economy." By this I mean to suggest that I'm seeing more and more industry participants' strategies - in both media and technology - start from the proposition that the broadband video industry will only succeed if video assets are widely dispersed and revenue creatively apportioned.
For content providers the notion of widespread video syndication big change in their business approach. In the past year I think we've observed content providers of all stripes transition from "aggregating eyeballs", to "accessing eyeballs," wherever they may live now or in the future: portals, social networks, portable devices, game consoles, etc. Underlying this shift is the realization that advertising-based revenues are going to fuel the broadband video industry for the foreseeable future. The ad model requires scale and syndication is the best way to deliver it.
This shift by content providers has been accompanied by a loosening of traditional tightly-controlled, scarcity-driven distribution strategies, an acknowledgement that fighting newly-empowered consumers is a futile exercise. The evidence of this shift abounds. Consider the broadcasters like CBS, NBC and Fox, which through their affiliates (Hulu, CBS Audience Network) are syndicating programming to many portals/aggregators (e.g. Yahoo, MSN, AOL, YouTube), social networks (e.g. Facebook, MySpace, Bebo) and others. And Disney's Stage 9 digital studio, which premiered with YouTube and explicitly plans to tap into broadband video hubs. And cable networks like MTV Networks, which is pursuing a plethora of distribution deals. And traditional news-gatherers like local TV stations, newspapers and news services (e.g. Reuters, AP) which have stepped up their activity to scatter their video clips to the Internet's nooks and crannies. And the list goes on and on.
Taking their cue from the media companies' strategy shift, technology entrepreneurs and investors have ramped up their focus on this market opportunity. The prospect of the syndicated video economy blossoming drives news/information distributors such as Voxant, ClipSyndicate, Mochilla, TheNewsMarket and RedLasso, an ad manager such as FreeWheel, and a content accelerator such as Signiant, plus many others. Then there are more established companies guiding areas of their product development process by the prospect of the syndicated video economy's growth: Google, WorldNow, Akamai, thePlatform, Anystream, Maven Networks, Brightcove, PermissionTV and plenty of others (apologies to those I've left out!)
All of this suggests that the eventual "value chain" of the broadband video industry will look quite different than the traditional one (for more on this, I've posted some my slides from late '07 here.) As with all economies, in the nascent syndicated video economy there is vast interdependence among the various players, not to mention shifting market positions and degrees of pricing power and negotiating leverage. It is far too early to gauge who will emerge as the syndicated video economy's winners and losers. But make no mistake, lots of energy and investment will be expended trying to nurture its growth and exploit its opportunities.
Do you see the syndicated video economy forming as well? Post a comment and let us all know!
Readers of VideoNuze know that for a long time I've been a big proponent of syndication as a key building block for broadband video success. In last week's webinar I explained that I see this trend only accelerating as content providers increasingly shift from aggregating the most eyeballs to accessing the most eyeballs. That means syndicating video far and wide through social networks, portals, broadband aggregators and others is fast-becoming a key success factor.
Yet aggressive syndication presents a complex set of issues around how to control and optimize the advertising to all those dispersed viewers. Absent the right set of tools to administer each deal's terms, there's a bias toward simplicity and hence, under-optimization. For example, I continually hear that all the broadcasters' syndication deals are 90-10 ad revenue splits. In some cases a plain vanilla approach like this may be fine. More likely though, to have a biz dev person's hands tied to very limited deal terms because of a lack of technology solutions significantly constrains the ecosystem.
FreeWheel is a new company aimed at unlocking these constraints with its "Monetization Rights Management" or MRM technology platform. MRM is a full ASP platform that empowers content providers' biz dev teams to cut creative revenue/inventory sharing with syndication partners and then have ad sales teams follow through with far more intelligence about how to implement these deals and sell inventory. The result is revenue optimization for all parties. I caught up with CEO Doug Knopper, co-CEO and co-founder of FreeWheel last week to learn more.
FreeWheel sits on top of existing ad management systems, as a sort of cross between a digital traffic cop and a green eyeshade - dynamically managing and allocating ad inventory, while keeping track of all ads and revenue across the content provider's syndicated network. MRM interfaces to a content provider's and partner's content management system through FreeWheel's API, allowing MRM to implement its predetermined business rules alongside the content being sent to partners. Clearly there's a huge network affect opportunity for FreeWheel - the more partners its early content provider customers get to implement MRM, the easier FreeWheel's sale will be to subsequent content providers.
FreeWheel reminds me a lot of Signiant, which I wrote about recently. Signiant is more focused on content distribution in a syndicated economy, while FreeWheel is focused on ad management. But both companies share a common purpose of greasing the skids for both content providers and distributors to play ball with each other with the intention of driving more video views and advertising revenue.
FreeWheel has signed up Next New Networks, Joost and Jumpstart Automotive Media as initial clients. The company was founded by three former DoubleClick executives, has 40 employees and has raised 2 rounds from Battery Ventures, though the total is undisclosed.
As many of you know, business development executives (and CEOs!) tend to be guilty of "throwing completed deals over the wall", expecting operations people and developers to implement as intended, while they move on to do the next deal. I know this first-hand as I was a biz dev guy for many years!
Yet, as I learned over many years and with multiple companies, each and every deal comes with its own particular implementation characteristics. These include things like multiple formats, encoding rates, business rules, file transfer processes, approvals and so forth. Do enough deals and pretty soon you've introduced massive complexity into your organization involving tons of manual tasks and costs which can quickly erase any profitability the underlying deal assumed.
This is where a company named Signiant comes into play. They're a sort of "plumber for the broadband video era." This unglamorous-sounding description does them no injustice; just think for a moment what the world would be like without actual plumbing, and you then you'll begin to appreciate how important the role is that Signiant plays in powering broadband video. The executive team includes a number of ex-Avid people, who bring a valuable perspective to the challenges of broadband video distribution. And as the broadband video market matures further and a spiraling number of deals get done, the plumbing to move all this video around only becomes more complex.
Last week I caught up with Tony Lapolito, Signiant's VP of Marketing who shared the company's strategy and product details. While the company's been around for over 10 years (staring as an internal project at Nortel), it has only identified the media industry as a key vertical focus in the last 2 years. It has quickly won respect, working with marquee customers like NBC, Disney, BT and just yesterday announcing a deal with Current.
Signiant brings an enterprise orientation to broadband video delivery, considering itself a "digital media supply chain" company. This may be unfamiliar territory for some of you, so to boil it down, the point of Signiant is to ensure that desired content is where it needs to be, when it needs to be there, and delivered with maximum efficiency, least cost and highest security/reliability. Below is a basic diagram depicting how Signiant works.
Signiant allows users to set up work flow processes to automatically handle a wide range of tasks. For example, NBC currently uses Signiant to securely distribute its content to approximately 20 partners following business rules for each. Tony said NBC expects its partnership roster to rise to 200 in the next 2 years and that Signiant will allow it to scale by allowing easy configuration of the content distribution process and business rules for each of these new deals.
Signiant does a lot of other things, such as prioritizing and allocating bandwidth, tracking all digital assets and managing approvals, all while tying into existing digital asset management systems and other legacy platforms in use. For Current, Signiant is streamlining the process of uploading viewer-created content, allowing Current to more quickly collect, approve and post inbound video.
There's not enough space to get into further detail, but suffice to say, if your operation is already groaning under the weight of implementing myriad deals, and/or you're pursuing a distribution-centric business strategy for your broadband video assets, it's well worth understanding the technology and business case behind Signiant.