The claim on Maven Networks web site proclaiming ‘We power internet TV,’ is rather reminiscent of the Cisco’s ‘we power the internet’ campaign that has been its mantra over the past ten years.
But this week Maven tried to launch its one stop shop for hosting and software tools for putting major video projects on the internet, with a bevy of majors supporting it, led by a new deal with Hearst Corporation, plus the news that already Fox, A&E TV, CBS and Sony Pictures Television plus 500 affiliates that are either using the new technology, or promoting the web sites that do, are already using it.
In the end this is perhaps not the first, but one of the first companies, to target a toolset around Flash 8, and subsequent Flash implementations that promote streaming video just by placing video files on web servers, and it’s perhaps that development that is really powering internet TV, rather than companies like Maven, which are perhaps making the experience easier to embark upon rather than actually powering it.
Maven offers four components, the first being its Core Internet TV Services module that handles content management, workflow and publishing, player experience, advertising, and business analytics, in other words all the essential bells and whistles to turn Flash video into TV channels.
The other modules, Syndication Services, Community Services and Media Services add various extra capabilities to the core unit. Syndication is about linking video to affiliates, and keeping track of which media is consumed on what partner web site; Community is about putting video out to social networking sites, and creating viral marketing campaigns, while Media is just professional services for ensuring best practice in creating quality Flash video.
The truth is that it takes a while for a market like Flash 8 to mature, and initially the only tools in the market that anyone needed was a utility to turn other forms of video files into Flash video files (.FLV), and the player itself which Adobe’s Macromedia has spread far and wide already over the entire internet universe.
In a way this is all about a monopoly, the PDF document reading monopoly, and its Flash player front end for jazzing up web sites, extending through the use of one of the more popular low priced codecs, in this case from On2 Technologies, into video. Flash 8 does away with the need for a web server to be specially configured for managing video streaming using RTP and RTSP protocols, hence crashing the price of video delivery over the internet.
This has meant that Microsoft has effectively fumbled the video ball, and now there is more On2 based video hitting PC screens that Windows Media video formats, which has been confirmed, to Microsoft’s chagrin, by internet traffic sites.
But initially only the founders of Flash 8 have been offering toolsets, with Macromedia authoring tools such as Flex outputting to the new format, and On2 Technologies offering its own tool called the alarmingly similar, Flix.
But once you have dealt with the raw video, the next thing is to turn it into a business, and that’s where Maven, and we would expect in the near future many other companies like Maven, begins its offering. Brightcove was the first to try this, led by executives that had just left Macromedia and Adobe, and who got a head start when they saw how exciting Flash 8 was while it was still in the labs.
But Brightcove is happy to monetize your video for you, selling advertising and inserting those adverts into the video streams on a pre-determined model, or it can leave that job to you. But by doing this it is likely to compete with its customers for revenue. What Brightcove does is rather like a Flash 8 version of Joost or Babelgum, both of which set out to define the business model and do most of the work for the content owner.
In the end companies like Maven, that set out to empower the video content owner to try any business model they like, and to set up their own list of affiliates, is more likely to get the approval from major content owners. Not that Brightcove hasn’t done well with customers like Sony BMG, Warner Music, AOL, Dow Jones, Time and the Washington Post, all using Brightcove for video services.
Both Brightcove and Maven will use third parties for actual hosting, so Akamai and Limelight are likely to own the servers and the bandwidth that this video is finally distributed over, but they can treat it as a simple bit stream thanks to the Flash and On2 technology.
Interestingly On2 announced its financial results this week, ramping quarterly revenues to just over $2 million, while costs continue at about $2.4 million, rising slightly. It is reveling in the attention that Flash 8 has brought it, has triple digit growth compared to last year, and is set fair to be cash positive in one of the next two quarters.
Last year it brought in $6.5 million in revenue but spent just over $10 million, with nearly $1 million of that on legal fees associated with investigations into a former CEO’s activities.
The company has almost $5 million in the bank and grew 36% from the preceding quarter and says it has signed more customers that are about to drive up its renewable revenue stream. Today the company is worth $118 million on the stock market, some 18 times revenues, but somehow we can’t see the company remaining independent despite this massive valuation, and if Adobe doesn’t buy out its intellectual property at least in the next few quarters, the price of the company is only going to double.