April 2, 2024
By Jake Ward Business Development Director at Groovy Gecko
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For the rest of the Spring 2024 - Industry Sourcebook issue of Streaming Media magazine please click here

The State of Corporate Video

Looking at a variety of research reports on the value of the global video streaming software services market, there is a broad consensus that the market was worth somewhere between $10–$11 billion in 2023. However, the growth forecast for the market until 2030 is very mixed, ranging from a mere $12 billion to more than $34 billion.

The lack of clear direction in the projections for those 7 years speaks to a wider problem with growth in the sector. After the growth of the pandemic years, a number of existing platforms have failed to either capitalise on that growth or to continue it.

In terms of the key platforms, there was a distinct divide between those showing continual growth and those that have stalled. The former has tended to be those platforms with video calling/conferencing, video events, and video archive capability, with the latter having only a limited set of those abilities.

Hopin

Hopin, one of the companies that surged to the front of the pack of corporate video services during the pandemic, has since diminished substantially. Its proprietary platform was valued as high as $7.8 billion in 2021, but in August 2023, the assets were sold to Ring Central for an initial fee of just $15 million.

Since 2020, the platform claimed to have hosted more than 80,000 events, working with a wide range of organisations, including the United Nations, NATO, and Unilever, with more than 100,000 customers. It also purchased a number of companies to bolster its functionality, including the life webinar platform StreamYard.

Hopin will continue with a new CEO, former chief technology and product officer Badri Rajasekar. Hopin founder Johnny Boufarhat has stepped aside as CEO, joining the board of the company and launching a new community platform called Superwave.

With Hopin billed as the future of virtual events, it is hugely damaging to the sector to see one of the key investments of the pandemic brought so low, but it probably speaks more to two key factors. First, Hopin was grossly overvalued at $7.8 billion. Second, it seems obvious that other platforms with established client bases would move into this space, and that was not truly quantified either by Hopin or by those investing.

Hopin acquisitions such as the live webinar platform StreamYard didn’t prevent it from losing value or being acquired
by Ring Central.

Brightcove

Another company which appears to have stalled is Brightcove. It announced that its Q3 revenues had dipped by 5% to $51 million, with subscribers and support revenue down by 6%. Gross profit dipped by a percentage point, with premium customers delivering an average static revenue of $95,900.

Brightcove reported a rise in net losses to $2.4 million for Q3 2023, compared to a net loss of $1.7 million for Q3 2022. Overall, 2023 yearly revenue is looking to fall in the $200–$202 million range, which is down from $211 million in 2022.

The impression this gives is that despite some interesting integrations, including Shopify, Instagram, and Salesforce, to expand its ecommerce capabilities, as well as some new clients, Brightcove’s growth has stalled. Revenue is static, and the company did not make any real steps forward during the pandemic. This is perhaps due to the lack of a clear live/videoconferencing workflow.

Discussing an integration with Socialive Studio, a tool to help in the development of video content, Marty Roberts, SVP of product strategy and marketing at Brightcove, highlights an issue that a lot of the platforms are facing: how to improve the quality of the live content generated and distributed through them.

Roberts says, “Integrating Brightcove’s livestream technology with Socialive helps our customers uplevel their internal communications with more robust production tools to better manage all aspects of a live stream, such as the control room, multiple presenters and interactive elements.”

The theme of improving the quality of content generated through the main platforms is a theme we will return to, as I believe it will be the key to continued growth for all platforms in the coming year.

Brightcove Socialive Studio

Kaltura

Kaltura is another company that seems to have stalled since the end of the pandemic. With relatively low growth on the horizon, the company’s EBITDA profitability seems to be showing fragile margins. Financial results for Q3 had revenue at $43.5 million, an increase of 6% compared to $41.1 million for Q3 2022. Subscription revenue for Q3 2023 sat at $40.8 million, an increase of 8% compared to $37.9 million for Q3 2022.

For the year, that would mean subscription revenue growth of 5%–6% year-over-year to between $160.3 million and $161.7 million and total revenue growth of approximately 2% year-over-year to between $171.5 million and $173.0 million.

The numbers reflect a business which isn’t really showing significant growth and is still experiencing a significant loss year-over-year, even if 2023’s is likely to be less than the $42 million loss from 2022. The company also appears highly valued, given the size of its balance sheet.

Vimeo Enterprise

Vimeo’s transition from indie YouTube to a business solution for cloud-based video hosting, with video creation and editing tools for the enterprise, finally neared completion in 2023. This repositioning immediately put Vimeo into the same market space as Kaltura and Brightcove, and although still smaller than both of those companies, Vimeo is showing growth and some potential as a consequence of its changed business model.

The transition has had a few bumps in the road, including a notable copyright case in Italy which will cost Vimeo $12 million in compensation to be paid to Mediaset’s RTI, but it is now beginning to bear fruit with bookings growth of 55% year-over-year in Q3 2023. This included some notable enterprise customer wins such as Boston Consulting Group, Forrester Research, Omni Hotels & Resorts, SHEIN, Oxford University, and Shutterstock.

Vimeo reported Q3 2023 earnings of 5 cents per share, which comfortably beat analyst expectations of a loss somewhere between 4 cents and 9 cents, despite revenues falling 1.7% year-over-year, but total bookings rising 4% year-over-year to $106.25 million.

Vimeo’s interim CEO Adam Gross has commented on the overall strategy going forward. “We are opening up our product to more free users as we believe that they are more likely to buy after trying,” Gross says. “We are fortunate to have a funnel of millions of free users to source from—it is among the many assets we have built over the last decade. Additionally, we believe a stronger product focus should benefit retention over time. Shifting in this direction could cause some headwinds on new bookings in 2024, but we believe we will generate more, and higher margin, long-term revenues.”

The established customer base is key to Vimeo’s future growth plans. If it can continue to convert free users, of even relatively small scale, into paying customers as well as win some big corporate accounts, then this is likely to allow the company to show continued growth going forward and begin to reach the revenue levels of both Kaltura and Brightcove, perhaps even to exceed them.

Vimeo Enterprise

Zoom and Teams

The platforms that have shown real growth post-pandemic tend to have a key difference from those such as Kaltura and Brightcove and those that provide a core service based around video calls augmented with video platform and event functionality. The two major platforms in this area are Zoom and Teams.

Zoom, like Teams, was initially focussed on the live collaborative video space but has expanded that offering to encompass live webcasting and events. Zoom is now used by 86% of Fortune 100 and 71% of Fortune 500 companies. The platform had an annual revenue of $4.39 billion, a 7.15% increase on FY 2022, with a total of 219,700 enterprise customers, not including SMEs or educational or governmental institutions.

Zoom continues to have a very high level of brand awareness in the UK (87%). It also remains the most popular video call tool in Russia, Scandinavia, and France, whereas Central Europe and Italy are dominated by Teams.

2023 showed promising results. Zoom generated $4.39 billion in revenue with a 3.5% year-over-year growth and 3.3 trillion meeting minutes viewed by customers. While this is not a huge percentage gain, in terms of size of revenue, it is obviously far bigger than that of the video platform companies.

However, revenue from the Europe, Middle East, and Africa (EMEA) region in the year fell by about 2%, suggesting that in Europe, the economic headwinds were beginning to have an impact while the US market kept growing. There is also the possibility that the platform is beginning to hit a ceiling when it comes to acquiring a bigger share of the market as it matures.

Zoom’s ubiquity during the pandemic allowed the platform to build on its base video call feature set to now offer features ranging from the core video calls to events along with an expansive API set and a full app marketplace.

The webinar and event market space is, of course, where Zoom begins to overlap its offering with other webinar and live-event video platforms such as Brightcove and Hopin. In this area, it has shown significant growth, but with the increasing use of Zoom for both calls and events, there is evidence that Zoom fatigue is becoming a real issue.

A 2022 Hubspot survey showed 49% of respondents said on-camera meetings make them more tired, while just more than 37% believe the biggest issue with online meetings is fatigue. In various reports, this fatigue has been linked to the stress caused by excessive calls/events and the unnatural behaviour being on camera enforces, such as the need to constantly look engaged and to respond with visual acknowledgement every time someone speaks.

This is why acquisitions and integrations, such as Brightcove’s of Socialive Studio, are important, as they give a more distinct feel to events. Going forward, I believe more customisation of both content and the ability to manage events will be key in driving growth in Zoom and other similar platforms. This will happen through bolt-on integrations to improve the quality of the content, or it may be through third parties being used to deliver events, be they service providers or software components such as vMix.

According to Zoom, 78% of British companies believe that videoconferencing boosted morale during the pandemic, but now, with a return to the office, these types of tools are likely to become one of a plethora of options available. The virtual event and exhibition space does open up new opportunities for growth for the platforms, but there are issues of customisation, Zoom fatigue, and general user experience to conquer if there is to be ongoing growth.

Teams was, of course, the other big winner in this space. It now has 320 million users around the world, a year-over-year increase of around 50 million, and generated $8 billion of revenue in 2023.

In September 2023, after the European Commission launched a probe into whether bundling Teams with the suites was anti-competitive, Microsoft decided to unbundle Teams from its Microsoft and Office 365 suites. The move seemed to defuse the situation, avoiding a lengthy legal battle with the EU, and gave Microsoft more opportunity to sell Teams services to smaller organisation for a much lower monthly fee.

In the US, for example, 91% of the Fortune 100 companies and 47% of medium-sized organizations use Teams, but only 21% of small organisations use the platform. This new entry-level pricing could help Teams expand further into that market.

As with Zoom, Teams will need to look for new market areas to move into, such as more complex virtual events, if it is to maintain its ongoing growth.

Zoom App Marketplace

The Overall Market

Overall, the market seems to be beginning to stratify into those large players which have created significant volume in terms of revenue and customers who are able to leverage their size and scope, such as Teams and Zoom with both their video call functionality and event/webinar streaming. The two big issues they face are overcoming Zoom fatigue and determining how much opportunity remains to grow the market.

Companies which have failed to make hay while the sun shines, such as Kaltura and Brightcove, appear likely to show moderate but unspectacular growth over the course of 2024. Potentially, these companies will become targets for the bigger players, not so much for their technology but for their clients. However, if Zoom and Teams decide to expand further into their core business areas, these companies may find themselves at risk.

The middle ground consists of the likes of Vimeo, which is trying to build a unique niche in the video platform space with the advantage of being able to leverage its significant userbase to convert them to higher-paying customers, which may enable the company to overtake the incumbents.

Moving forward, each platform will have to consider how to expand its share of the market but also how to overcome Zoom fatigue so that the content created for its platforms continues to engage audiences and helps to drive growth in market share and revenue.

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