Wednesday, January 13, 2010, 9:52 AM ET|
Encoding.com, one of the earliest companies to offer video encoding/transcoding as a service, announced yesterday that it would now be using The Rackspace Cloud as its primary cloud computing environment, a switch from Amazon's EC2. The move is significant as it is another indicator of how the still nascent video encoding as a service is evolving to fit into the overall encoding landscape. Jeff Malkin, Encoding.com's COO and Chandler Vaughn, The Rackspace Cloud's director of product development, gave me an update yesterday.
Media companies have traditionally done their encoding and transcoding in-house, using software from companies like Anystream, Telestream, Digital Rapids, Rhozet and others. As I originally wrote last April, companies like Encoding.com, mPoint and HD Cloud have begun offering alternatives that allow these processes to occur in the "cloud." The idea is that media companies can essentially rent encoding/transcoding capabilities as needed for a fee from companies who do their processes on a third party's infrastructure such as The Rackspace Cloud or Amazon's EC2. For media companies, the new encoding/transcoding service providers' primary value propositions are lower overall cost (both opex and capex), elimination of on-site responsibility for hardware and software, and flexibility.
Jeff reported that Encoding.com is now serving 400 customers, with user-generated content sites like StreetFire still a meaningful part of its business. The company has encoded 3.5 million videos to date and is now encoding 30K source videos/day. Jeff said that established companies like MTV and Brightcove are using Encoding.com's services, but noted that larger media companies are still just dipping their toe into encoding as a service. In particular Jeff said that given turnaround times, the ability to do encodes for full-length HD-quality files on a service basis is not yet practical.
This echoes what an executive at a large encoding software company told me recently - that for the biggest media companies, which have large files that need to be turned around quickly, encoding in the cloud doesn't yet make sense. Another issue is the reluctance to move source files outside the media company's firewall.
Encoding.com's move to Rackspace begins to address some of these issues. Jeff highlighted 3 primary reasons for the switch - Rackspace's CPU bursting capability, which can offer 2x the processing performance of EC2 (The Bitsource just posted a performance comparison analysis); closer proximity to customer's files, as Rackspace is the managed hosting provider for thousands of web sites; and Rackspace's customer support, which improves Encoding.com's ability to deliver on its service level guarantees.
With the volume of online and mobile video exploding, this will be a key part of the market to watch. It is still early days for encoding as a service, but as Encoding.com and others continue to strengthen their operations and maintain attractive pricing, it seems likely that they will eventually gain attention from additional media companies.
What do you think? Post a comment now.
Thursday, May 7, 2009, 8:40 AM ET|
Three weeks ago, in "HD Cloud Launches Video Encoding Platform, Capitalizing on Cloud Computing," I detailed how the company is offering video content providers a new, "cloud-based" approach to meet their escalating transcoding needs. Today's post is about mPOINT, another new entrant in cloud-based transcoding and syndication, whose TranSend service goes a step further by also offering metadata creation and management. Chiranjeev Bordoloi, mPOINT's co-founder and CEO and Chris Cali, co-founder and CTO, gave me a rundown recently.
There are multiple drivers behind TranSend (and others in this space): an exploding array of video encoding and metadata formats, skyrocketing premium-quality content consumption and syndication, distribution to mobile devices and various business models/rules, to name just a few.
In fact, though I'm often skeptical of vendor-written white papers, mPOINT's recently released free white paper "Content Syndication in the Cloud" provides a pretty unbiased overview of the evolving video market and the resulting operational complexities. Many of its themes resonate with what I've been hearing from content executives for a while, which are genuine inhibitors to the further development of the "Syndicated Video Economy" I've written about so often. Especially for those new to cloud-based computing, the white paper is an excellent resource. There's even a handy "buyer's guide" to assist in evaluating alternatives.
As Chiranjeev and Chris explained, one of the key differentiators for TranSend is its comprehensiveness. It offers transcoding, metadata creation and management, syndication, packaging, delivery and reporting - all performed in the cloud, which generates cost-savings and simpler work flows. Another focus is on mobile video advertising, where TranSend is able to call an ad server like DART and the source file for the requested video and on-the-fly encode both into the phone's optimal file format.
Chiranjeev and Chris said they're repeatedly told by customers that simplicity, without feature sacrifices, is a key goal. And on the cost side, with a model based on GB in and GB out, plus the number of transcodes, the price usually works out to approximately $2/GB, which mPOINT believes is a fraction of non-cloud alternatives.
mPOINT is focusing on mid-tier and larger media companies that emphasize syndication, which increasingly is most everyone. Yesterday the company announced SnagFilms, the independent film aggregator backed by former AOL executives Ted Leonsis and Steve Case as an early customer. Other announcements are in the hopper. mPOINT bootstrapped itself to profitability and took a seed round in December '08 from Greycroft Partners to tap its relationships for growth. The company is also building out a growing ecosystem of partners which currently include Amazon, Aspera and IBM.
TranSend and others offer the kind of infrastructure advances that are helping lubricate the broadband video business model. I constantly hear from small-to-mid video content providers who are enticed by the surging popularity of online distribution but are often still daunted by its immature business models and operational complexity. mPOINT and others are showing that clever entrepreneurs are steadily addressing these needs.
While executives at other incumbent encoding/transcoding vendors have told me that they have not seen any customer erosion due to cloud-based alternatives, they are watching the developments closely and planning their own initiatives. For now the largest content providers, who have the deepest pockets to staff their own encoding, syndication and metadata operations may be reluctant to be early adopters of cloud-based alternatives. Their concerns span security in the cloud to insufficient proof of cloud success as yet. But with TranSend and others addressing so many critical market drivers, my sense is that this space is going to attract a lot of attention quickly and is poised to become quite hot.
What do you think? Post a comment now.
Tuesday, April 14, 2009, 10:09 AM ET|
Three significant trends are behind today's launch of HD Cloud, a new video transcoding service being announced today: the proliferation of video file formats and encoding rates, the increase in syndication activity to multiple distributors and the cost and scale benefits of "cloud computing." HD Cloud founder and CEO Nicholas Butterworth (who I have known since he ran MTV's digital operations 10 years ago) walked me through the company's plan yesterday and how it benefits content providers looking to cost-effectively capitalize on broadband video's surging popularity.
Anyone who spends a little time watching broadband video will notice variations in video formats and quality. Behind the scenes there are diverse encoding specs for how video is prepared from its source file before it is served to users. This video encoding work is multiplied significantly for content providers if they also want to distribute through 3rd parties like Hulu, Netflix, Fancast, TV.com, etc, all of which have their own encoding specs. Further, these 3rd parties all have their own ways of accepting video feeds and associated metadata from content partners. Yet another driver of complexity are adaptive bit rate players like Move Networks which automatically hop between multiple files encoded at different bit rates depending on the user's available bandwidth. Combine it all and it means encoding has become a labor-intensive, complicated, yet highly-necessary process.
Traditionally encoding has been done locally by content providers using encoding solutions from enterprise-class companies like Anystream, Telestream, Digital Rapids and others. By offering encoding as a service, HD Cloud gives certain content providers an alternative to spending capex and running their own encoding farms. Content providers choose which source files are to be encoded into which formats and bit rates. They also provide HD Cloud with their credentials for distributing to authorized 3rd party sites. When a job is configured, HD Cloud performs the encoding and 3rd party distribution. HD Cloud doesn't store the files or keep a copy, mainly for security reasons.
The key to making all this work is so-called "cloud computing," whereby HD Cloud (and many others) essentially rent computing capacity from providers like Amazon's EC2. As new jobs come in, HD Cloud requests capacity, temporarily loads its encoding software (which is a combination of open source and its own custom code) and runs its jobs. When they're done, HD Cloud releases the capacity back to Amazon. It's all a little analogous to the old days of timesharing on mainframes, except with new efficiencies. HD Cloud's economics are based on Amazon buying the computing capacity and operating the facilities and utilizing them at a far higher rate than HD Cloud or any other customer would have on their own.
The result is that HD Cloud prices its encoding at $2/gigabyte, which Nicholas thinks will only get cheaper as bandwidth prices continue to fall. A financial model he sent along suggests that the content provider's ROI given certain assumptions about the amount of content encoded and streamed could be 3-4 times higher than with traditional local encoding solutions. This also assumes the avoidance of upfront capex for local software and hardware encoding alternatives, an important cost-savings for many given the economy. HD Cloud is announcing Magnify.net as its first client today. Others in this space include mPoint, Encoding.com, ON2 and others.
Between encoding's growing complexity and syndication's appeal, content providers are going to need more extensive and cost-effective encoding solutions. Cloud computing in general, and HD Cloud (and others) seem well-positioned to address these needs.
What do you think? Post a comment now.
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