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Wednesday, April 23, 2014

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Analysis for 'Transpera'

  • Quite a Week for M&A In Online/Mobile Video

    It's been quite a week for M&A in online and mobile video. On Monday, KIT Digital announced it was acquiring Kewego, KickApps and Kyte. Then today Cisco bought Inlet Technologies to flesh out their Videoscape platform and Tremor Media reportedly acquired mobile ad manager Transpera. That's a lot of activity for just one week, and points to how key players are jockeying for bigger slices of the online and mobile video market. The trend will no doubt continue.

    What do you think? Post a comment now (no sign-in required).

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  • Mobile Video Ad Network Transpera Raises $9 Million

    Mobile video ad network Transpera is announcing this morning that it has raised a Series C round of $9 million, led by BlackBerry Partners Fund, with participation from existing investors Flybridge Capital Partners, First Round Capital, Intel Capital and Labrador Ventures. Transpera CEO Frank Barbieri told me yesterday that total company funding to date is $18 million.

    In addition to the financing, the company is also now promoting its network as "The Audience Network," reflecting what Frank said are significantly higher engagement metrics Transpera campaigns are achieving vs. comparable online video ones. Transpera has worked with brand research firm Insight Express to study performance of 5 recent video ad campaigns that ran on Transpera's network. Compared to norms that Insight Express keeps for similar online video campaigns, for the Transpera campaigns it found 9 times higher increase in purchase intent, 19 times higher increase in aided awareness, 4 times higher increase in unaided awareness and 2 times higher increase in ad awareness.

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  • Mobile Video Continues to Gain Traction

    I continue to be impressed with how the mobile video market is gaining traction. It seems like rarely a day goes by now where there isn't an announcement by a technology vendor, content provider or service provider related to mobile video. Though it's still well behind online video's adoption, all of the pieces continue to fall into place for mobile video's continued growth.

    From a consumer usage standpoint, the iPhone has of course been the key driver. Whenever I'm with an iPhone owner, I'm struck by how deeply they've integrated video into their mobile experience. It's not just that they've downloaded TV shows and movies to watch on planes and so forth, but rather how natural it is for them to start playing a video and then pass their phone around so others can watch also. The iPhone has turbocharged the whole concept of shared, out-of-home video experiences.

    And though the iPhone's 30 million estimated units sold represents a huge footprint of new mobile video users (in turn generating a large ecosystem of app developers), from a device standpoint, new entrants are poised to grow the market even further. Devices powered by the Android mobile operating system are continuing to come to market, with the most recent, high-profile example being Motorola's Droid, offered by Verizon Wireless. Verizon is putting a huge marketing push behind the Droid, contributing to a growing sense of awareness by consumers of the appeal of smartphones and their video capabilities in particular. Not surprisingly given its Google parentage, YouTube has also weighed in on the benefits of Android in allowing easier uploading at higher video quality.

    In addition the iPhone and Android, among business users, Blackberry continues to dominate and internationally, Nokia has the largest smartphone position. This all suggests there will be vigorous competition among these 4 platforms, leading to lots consumer-facing promotion and rapid innovation. In a recent AdAge piece, IDC estimated that 6% of U.S. cell phone users, or 18 million people, will watch video on their cell phones this year, rising to 27 million in 2013.

    Content providers have taken notice of these dynamics and have been aggressively creating video-rich mobile apps, initially for the iPhone, but now also for Android, Nokia and Blackberry smartphones. In a recent conversation I had with Ujjal Kohli, CEO of Rhythm NewMedia, which specializes in "mobilizing and monetizing" broadcast and cable networks' TV shows, he explained how clients continue to bulk up their teams devoted solely to mobile video initiatives. An example of this is Warner Bros, which is among a number of film studios now pursuing mobile initiatives. In addition to building mobile video apps, Rhythm is also creating a mobile video ad network, like Transpera (which I last covered here). As mobile video usage surges, advertising will grow right alongside it. Mobile advertising in general received major validation earlier this week as Google acquired mobile video ad display network AdMob for $750 million.

    With all this mobile video activity, technology providers are increasingly their attention to serving their content customers. Just yesterday, Kyte, a video platform company that focused early on mobile, announced that it has launched "application frameworks" for Android and Nokia, following on previous frameworks for iPhone and Blackberry. As Gannon Hall, Kyte's COO told me, its content customers have pushed Kyte for other platforms. Now with native support for all four platforms, Kyte's customers can quickly and cost-effectively adapt existing apps, incorporating full social and monetization functions. While Gannon believes Kyte has taken the lead among OVPs in offering mobile capabilities beyond just APIs, he envisions others ramping up as well. Some evidence of this is today's partnership announcement by VMIX and Qik, to integrate mobile live streaming into VMIX's platform. More will surely follow.

    There are plenty of other examples of how the ecosystem supporting mobile video is being built out, such as Clearwire announcing this week $1.5 billion in additional capital raised for its 4G WiMax network, Verizon leading a group of venture investors in a $1.3 billion "LTE" 4G opportunity fund, Adobe releasing Flash Player 10.1 targeted for mobile devices, AT&T accelerating deployment of "HSPA 7.2" technology in 6 cities to boost 3G speeds and Akamai launching its "Akamai HD" network, which among other things supports HD video streaming to the iPhone. These and many other examples form the foundation for ever more robust mobile video experiences in the future.

    One of my predictions for 2009 was that after many fits and starts, mobile video finally seemed poised to take off. Nearly 11 months into the year, I think we're seeing ample evidence of this happening. I expect only continued growth going forward.

    What do you think? Post a comment now.

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  • thePlatform Adds Partners to Its Framework Program

    thePlatform is announcing this morning that another 20 companies have joined its "Framework" partner program originally rolled out in Feb. '08. There are now over 80 companies participating.

    In its release, thePlatform notes that its "role is to make online video publishing a seamless process for our customers...." That's a commonly-shared goal among video platform companies, yet I continue to hear from various content providers that stitching together the various pieces they require into a total solution can be difficult. That's why these kinds of programs, where partner products are pre-integrated, add a lot of value for customers.

    Among the many companies thePlatform cites as new partners are quite a few I've written about previously on VideoNuze (click to see each write-up): Aspera, Azuki Systems, BrightRoll, EveryZing, Transpera, Visible Measures, YuMe and others.

    (Note: thePlatform is a VideoNuze sponsor)

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  • MSNBC.com, Weather Channel Launch Mobile Video with Transpera

    The mobile video space is getting another boost this morning as MSNBC.com and the Weather Channel are announcing new mobile video initiatives, both with Transpera (which I previously wrote about here). Both weather and news/politics are in the top 5 mobile Internet web site categories according to Nielsen. The Weather Channel is the number one mobile content site and MSNBC has been the leader in Current Events and Global News for six months. All that suggests that video should be heavily consumed on both mobile sites.

    Weather is offering video forecasts for the top 100 cities, along with national forecasts, top stories, weekend outlooks, severe weather reports and travel-specific conditions. Meanwhile, MSNBC intends to deliver the same kinds of video on mobile that it's been offering online for some time now, including NBC News video like segments from news shows "Today," "NBC Nightly News with Brian Williams," and "Meet the Press."

    The Weather and MSNBC initiatives are the kinds of things that make a lot of sense to me (and cause me to be confident about my '09 prediction that mobile video is going to be big this year). Both sites have been deep into video for some time now, and as users develop a set of online expectations, it's only natural that they'll transfer these to their mobile experiences as well.

    Soon enough, high-quality video on mobile devices will become table stakes. Transpera is gaining a lot of momentum by helping content providers quickly deploy their video to mobile users. Their emphasis on advertising, including selling inventory as part of their network, has been a key to their success. The mobile video space is one to watch in '09.

    What do you think? Post a comment now.

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  • 7 Broadband/Mobile CEOs Explain How to Raise Money in the Down Economy

    Amidst all the gloomy economic news, there are actually still some earlier stage companies that are raising new money. To learn more about their how they're doing it, I emailed the CEOs of seven broadband/mobile video companies which have collectively raised nearly $80M in the last 3 months. I asked 3 basic questions:

    1. What are the key success factors for raising money given the difficult economic climate?
    2. What are the biggest challenges?
    3. Is there any specific advice you'd offer to those trying to raise money these days?

    While there were some common themes in their answers (many of which echoed the usual fundraising maxims), there was plenty of variety and a few outliers. Space constraints don't allow for me to share all of their specific answers, so I've tried my best to summarize the common themes and highlight key nuggets of wisdom below. If you have any questions, drop me an email.

    The seven CEOs who graciously took time out of their busy days to contribute their thoughts (along with the recent rounds they've raised) are:

    1. What are the key success factors for raising money given the difficult economic climate?

    The answers that dominated were all around revenue, profitability and cash flow. All the CEOs mentioned, in one way or another, that being able to demonstrate real revenue growth and momentum is essential. Some noted that in the past traffic or usage may have been sufficient, but now the "premium is on paying customers," and how get to profitability and cash flow breakeven using reasonable assumptions. Several mentioned that investors are as risk averse as ever, which of course comes as no surprise. They want to see concrete, well thought-out plans.

    Investors have also become more sophisticated about the whole broadband video sector and expect entrepreneurs to be able to explain where they fit into the ecosystem and what their points of differentiation are. Importantly, they are looking for proven models (unfortunately an oxymoron for a pure startup), or at least some minimal history of success that goes "beyond PPT slideware."

    A couple of CEOs noted that investors have shifted from asking "how fast can you scale?" to "how will you get through this crisis?" They no longer expect a quick exit. They are looking for a real plan which includes contingency tactics if for example, competitors do something desperate like cut their prices in half.

    2. What are the biggest challenges?

    The prevailing theme here was uncertainty, starting with investors' own business models. They're focused on how much of their funds to hold in reserve to shore up existing portfolio companies. They're trying to gauge their own limited partners' appetite for venture investing given the credit squeeze. Then of course they're trying to understand the impact of broadband market drivers like ad spending and user adoption. One CEO lamented the difficulty of persuading people to put new money to work on the very day the stock market's dropping by 500 points. Still another noted that all of this can lead to a "self-fulfilling prophecy" where everything freezes and missed opportunities abound.

    With respect to the broadband market specifically, one CEO said the key challenge is showing how "you monetize video for your clients." Absent that, "it will not only be hard to raise money, but harder still for your client to spend money with you."

    Another said that the level of scrutiny has gotten so high that it's not even worth talking to any investor which doesn't have its own track record of investing in the broadband video sector. It's just too hard to educated people in this environment. Another CEO added that your model needs to be "brilliant and bulletproof, with an A-level management team already in place." Boy, there's a steep hurdle to clear.

    3. Is there any specific advice you'd offer to those trying to raise money these days?

    Many of the answers to this question reflected fundraising basics: understand your business thoroughly, put a balanced team in place, seek out investors you know first, have a solid plan, and bootstrap as much as possible first.

    With respect to the raising money in the current lousy market, there was a broad range of sentiment. One CEO said "Don't...the terms are going to suck..." while another said to be "incredibly realistic about how much to raise, your burn rate and valuation." On the more optimistic end of the spectrum, one said "The market's poor performance means that investors are looking for new opportunities. Ignore all the negative energy and naysayers." And another remarked that "Even during the tech disaster of 2001-2003, angel investors, VCs and tech behemoths were still putting money to work in promising sectors." Another heavily emphasized the value of loyal and supportive existing investors (if there are any) in helping making the case to new investors.

    More tactically, one CEO said that the more you "minimize uncertainty that surrounds your business specifically, the better off you'll be." Another said to make the transaction as simple as possible, and to "get the big items off the table first." Still another said to demonstrate "you're indispensable to customers, helping them weather the downturn." Finally one cautioned to be ready to take a lot more meetings than usual and expect a lot deeper follow up..."it may require you to go well beyond investors in your backyard to find the right fit."

    Hopefully some of this is helpful to those of you trying to raise money right now, or thinking about doing so in the near future. Broadband video remains one of the hottest sectors out there; even still, if you're not getting a lot of love right now, you're not alone...

    What do you think? Post a comment now.

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  • Transpera Raises $8.25M Series B, Builds Out Mobile Video Services

    Meanwhile, Transpera, which I wrote about previously here, is also announcing today an $8.25M Series B round, including new investor Labrador Ventures and existing investors Flybridge Capital Partners, Intel Capital and First Round Capital.

    The mobile video space is earlier stage than broadband, but is coming on strong. At the recent Digital Hollywood Fall, I ran into Transpera CEO/founder Frank Barbieri, who told me that the company's phones are ringing off the hook from content providers seeking a turnkey mobile video distribution and monetization platform (recall that Transpera is both a technology provider and a mobile ad network). He explained that for now, customers are focused on the basics: getting their video out there and getting paid for it. Other more interactive features are less important, at least for now.

    We touched on mobile video briefly at my two panels earlier this week. There's definite excitement, particularly in light of the iPhone's rapid acceptance. Wherever I go, people seem to accept as an inevitable that there's strong consumer appetite for mobile video. Transpera seems well-positioned to capitalize on this.

    What do you think? Post a comment now.

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  • MTV, Discovery, AccuWeather, Others Push Mobile Video With Transpera

    With the recent launch of the iPhone and other smartphones, mobile video delivery is receiving much greater attention. Though still lagging the widespread popularity of broadband-delivered video, mobile video is getting a boost today as MTV, Discovery, AccuWeather, Travel Channel and Next New Networks have all announced new initiatives, to be powered by Transpera, a mobile video services platform.

    Mobile has long been an alluring opportunity, but to date most of the activity has been from wireless carriers or their partners' efforts. These so-called "on deck" video offerings were largely subscription-based (Verizon's VCast, MobiTV, etc.) and available on only a minority of all handsets. The limited, carrier-controlled nature of traditional mobile video has been a key differentiator from the open broadband video world.

    Further, as Greg Clayman, MTV's EVP of Digital Business Development explained to me on Friday, neither the tools for content providers to manage, publish and monetize mobile video nor the network capacity for delivering mobile video have been in place until recently.

    Transpera is one of a number of companies addressing the mobile video opportunity (see also my recent post on upstart Azuki Systems and also another player called Vantrix). I spoke to Transpera's CEO and co-founder Frank Barbieri a few weeks ago, and he noted that given how nascent the mobile video space is, the company is today providing both a full technology platform to content providers and ad sales capabilities. I pointed out that in broadband that integration of technology and ad sales had been tried (most notably by Brightcove), but largely been dropped. Today there is a clear bifurcation in the broadband ecosystem between technology platforms and ad sales networks.

    Frank sees the same thing happening in mobile video (in fact, we agreed that comparisons to broadband's development are useful in thinking about how mobile video delivery will shape up). Transpera's longer-term goal is to be a full-fledged mobile ad sales network, so its management/publishing/delivery platform is more of a means to that end. Frank sees Transpera already providing real monetization value to many of its customers; the company has strong reach into media buyers and agencies and credibility in selling this new medium's benefits (it should be noted however that MTV, for one, continues to retain its mobile video ad inventory to sell itself).

    With its focus on building out a mobile video ad network, my guess is that eventually Transpera will see competition from today's broadband ad networks, who are arguably well-positioned to play in the mobile space as consumption surges.

    For now though, given how early it is in mobile video's evolution, the key is building trial and usage. For many content providers mobile video is brand new and the ROI unproven. Though they've likely maintained so-called WAP sites for mobile browsers, video is a whole new ball game. Driving video consumption and legitimizing the mobile medium - as has happened with broadband - is job #1 for all the players in this exciting new space.

    What do you think? Post a comment now!

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