What'll happen to the video platforms?

Matt Bowman · August 12, 2009 · Short URL: https://vator.tv/n/9ee

Online video services proliferated like rabbits in the last few years, but can the market keep up?

 Silicon Valley has a way of getting ahead of itself. The bust in 2000 didn’t happen because the internet was overhyped—it is, as promised, transforming the world economy at breakneck speed. The bust happened because the Valley wanted it to change just a few years faster. Speculation in anything that ended in .com outpaced the need for capital, and the valley tripped in its sprint.

Something similar is happening in online video. YouTube busted open the floodgates on pent-up demand for auto-broadcasting. Entrepreneurs grasped the new market, and now we have a family of MiniTubes trying to host and monetize online video: Veoh, Brightcove, Ooyala, Delve, Move Networks, Kaltura, Fliqz, Magnify…. And the live-streaming variety of Ustream, Kyte, Justin.tv, Stickam, Livestream, blogTV, Seero, Monetize Media... all trying to avoid the fate of Revver, LiveUniverse, Maven Networks and Mevee.

A lot of these started out with ad-based business models, but the ad dollars still haven’t shifted online as image-conscious brands stall for better solutions, and the recession slows online ad growth.  The recession also dealt a blow to venture capital, and the Sequoia Slides said everyone had to monetize, so many of the platforms shifted to a SaaS model, offering premium hosting services for mid-level professional sites.

A few have grabbed the big ABC / Fox / ESPN clients. Brightcove and Move Networks will probably corner the premium market. Brightcove has deals CBS News and Fox, and Move works with ABC, Fox, the Discovery Channel, and Animal Planet. Move showed signs of intelligent growth in April with its acquisition of Inuk.

Most of the others platforms are gunning for the mid-tail, but the market for mid-level publishers who can pay $10,000 / month for video solutions just isn’t big enough, yet, and cutthroat competition for growth means the video services themselves still offer plenty of free solutions.With Capital harder to come by and video hosting as expensive as it is, we could be in for some serious online video carnage.

Some of them may shop themselves around to old-school media companies in need of online video talent. Magnify may be well positioned for this, having raised only $3 million, including $500k just this month, and keeping a lean team of 12 while attracting the attention of big clients like New York Magazine, Etsy and the Weather Channel.

Sometime soon, every small business will do in-house video production, and ad dollars will support mid-tail publishing, but those markets just can’t mature as quickly as the Valley’s imagination. Whether this crop of hosting companies will tap the coming market depends on whether they can slow their pace from sprint to jog.

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