The State of Corporate Video 2020
In last year's edition of this article, I looked ahead to 2019 and suggested that there was the possibility of some consolidation in the OVP space with the potential acquisition of smaller players by some of the larger ones. This happened even sooner than I expected—and on a scale I didn't expect at all—when Brightcove completed the acquisition of Ooyala for $15 million in April 2019. Ooyala itself had only completed a management buyout from Telstra 6 months prior to the purchase.
The devaluing of Ooyala from its height of $500 million after the Telstra purchase in 2014 to just $15 million last year is a sobering lesson for the OVP market. At the time of the purchase, the total size of market predictions for OVPs in 2020 was vastly inflated, which led to the overvaluation. Along with an inability by Telstra to leverage Ooyala's strengths, the valuation was only ever likely to head in one direction. Even so, the reduction in value by 97% was a very sharp fall.
Brightcove obviously saw that the value in the acquisition came from Ooyala's existing customer base, which included Tribune Media, Turner, and the PGA Tour, as well as brands such as Sephora, Dell, and Audi. In addition, at the time of the acquisition, Brightcove made it clear it intended to take on "substantial portions" of Ooyala's staff across engineering, support, and sales, bolstering its workforce.
As Brightcove CEO Jeff Ray said in a statement regarding the acquisition, "Ooyala has tremendous global customers who understand the power of video and its ability to transform business and reach new customers. This transaction, which includes immediately growing our highly skilled and committed global workforce, accelerates our ability to deliver faster innovation and deeper support for all customers."
Brightcove's original intention was that Ooyala would keep operating its Flex Media Platform as a separate company and continue to onboard new customers to it. "With this transaction we're ushering in an exciting new chapter for our company as we continue to focus and expand on Ooyala's flourishing workflow and media-asset-management solutions, centred around our highly successful Ooyala Flex Media Platform, which continues to grow rapidly and is serving an expanding roster of film and TV studios, networks, and broadcasters globally," Ooyala CEO Jonathan Huberman said in a 13 February 2019, Variety post.
However, over the course of 2019, things changed rapidly with little warning. In August, Brightcove began to warn customers that the Ooyala platform would be entering an end-of-life (EOL) phase to be completed by April 2020. This was particularly surprising for customers who had been assured that the platform would continue to be supported for at least another 18 months. The EOL journey was also far from usual, with no advanced warning, no clearly defined migration path, and a very abbreviated timeline.
So what does this mean for Brightcove's future and for both organisations' customers? In terms of profitability, Brightcove is managing to hit its revenue growth targets while reducing losses. If the current predicted revenue figures for 2020 remain accurate, then Brightcove is likely to show profitability of around $0.08 per share in 2020. However, what is the potential fallout from shortening the EOL timescale for the Ooyala products?
According to existing Ooyala clients, the key problem here appears to be that there is no clear and efficient upgrade path from the Ooyala OVP platform to Brightcove. This means that there is no real incentive for existing Ooyala clients to stay with Brightcove rather than to look at other providers. Given the acquisition was about a purchase of clients and some staff, if there is a mass exodus of high-profile clients to other providers, it could prove to represent very poor value for Brightcove.
One of the other big players in the market, Kaltura, announced a major partnership with Oracle in early September as they began to OEM its Video Platform as a Service. The integration will give customers access to the Kaltura API through existing Oracle products such as Marketing Cloud and should expose the platform to a wealth of new customers. The companies have been working together since 2013, but this integration signalled a significant increase in functionality.
Kaltura invested in a number of areas to improve functionality in 2019, including a new analytics engine and the Kaltura REACH video capturing and enrichment suite, which is designed to encourage the use of AI and machine learning (ML) services for video accessibility, search, discoverability, and engagement. The core REACH product itself still suffers from the main issue affecting lots of AI subtitling solutions—namely accuracy. However, by opening up the functionality and Marketplace, Kaltura may well find a shortcut to increasing the quality of applications in this area.
In unified communications, Kaltura completed more third-party integrations for Zoom, Skype for Business, and others; incorporated real-time analytics for both engagement and QoS; and relaunched its Kaltura Pitch video messaging tool.
Kaltura has also been trying to leverage its existing interactive video capabilities to offer enhanced personalised experiences in both education and marketing, but the actual size and longevity of this market remain to be seen. In January 2020, Kaltura acquired NewRow the webcasting and e-learning platform to further bolster its offering in these areas.
Kaltura's broad-brush approach means it now offers a very flexible product that is highly adaptable, making it suitable for a wide range of use cases. However, that could also be a weakness as the platform may suffer a death of a thousand cuts as more specialist OVPs invade its core markets.
Having previously turned down a $500 million offer for the company, Kaltura now may complete an IPO next year with a valuation that could be close to $1 billion. Its ability to deliver this valuation will rest on how much it can maintain and expand its market share.
Panopto has a strong focus in higher education but has continued to try to make further inroads into the corporate markets. In both markets, the company has seen growth in the past, which will be essential with Kaltura's acquisition of NewRow.
Having already aimed to improve its analytics late in 2018 with a more corporate-focussed analytical view of video content consumption and audience behaviour, Panopto wanted to continue to enhance its credentials further with live video featuring new multi-camera streaming capabilities and enhanced live video analytics.
A partnership with Shuttle Computer delivered a branded capture appliance married to its extensive range of unified communications integration with support for BlueJeans, LogMeIn, and Zoom, allowing Panopto to significantly bolster its corporate offering. The further integration with corporate learning packages such as Canvas Saba and SharePoint means that, for a corporate with a heavy OVP focus on learning, it could make for a very compelling offering.
Microsoft has offered Stream as part of Office 365 for a number of years, and its integration more tightly into the package to work across all of Office, including Yammer, is a big step forward in terms of trying to gain traction in the corporate space. The addition of good-quality close captioning is also a bonus, particularly when used in association with the live event streaming capability. The ability to easily record existing Teams meetings, along with the addition of new interactive functionality such as polling, means that for a lot of Office-based corporates, it will be a solid default choice.
The main issue for wider corporate adoption arises when elements such as synchronised PowerPoint needs to be added, as this functionality is sorely lacking. For the moment, corporates are likely to take a two-handed approach, with Stream doing the heavy lifting in terms of day-to-day streams displacing platforms such as Cisco Webex, while higher-end internal communications are delivered by other, more sophisticated, platforms. With Microsoft continuing to add features, how long that remains the case is an open question. More functionality may lead to Stream being able to displace existing OVP platforms.
Another player now well-established in the market took a different approach, as IBM rebranded its diverse range of cloud video products as Watson Media. The AI capabilities of Watson married to an OVP certainly offer a unique proposition, with functions such as video assembly, speech to text, and captioning being somewhat ahead of competitors.
IBM's focus seems to be moving away from the corporate market, despite the launch of a corporate-focussed app, and looking at one of the markets in which IBM is strong—media and entertainment. With the robust CDN tech that it has acquired and the ability to leverage its expertise in this sector, IBM may well be able to create a beachhead in this market before turning its attention to related sectors.
The final large established player in the space is, of course, Qumu. Qumu announced a number of developments during the past year, starting back in December 2018, when it agreed to a distribution partnership with British Telecom to enable it to be offered to new potential clients. This could continue to be an important growth driver. In June, Qumu announced a partnership with CaptionHub to try to tackle the knotty issue of AI-based captioning.
In September, it also announced a major update to its on-prem offering as it continued to offer robust solutions for cloud and on-prem users. However, perhaps the most significant development was Qumu opening its ecosystem to third-party partners to offer a range of peer-to-peer and other functionality. This could be an important step in broadening the functionality of the platform and expanding its usefulness in new sectors.
In February, a new platform entered the live-streaming market, one which, if it can create a compelling and robust offering while delivering viewers, could finally produce a suitable platform for B2B live video, which has been sorely lacking up to this point.
The platform is the Microsoft-owned networking site LinkedIn. The new live feature is still in a very limited beta release, with content creators having to be approved by LinkedIn before being able to stream live.
Currently, thought leadership and events content seem to be delivering the biggest audiences, but as the number of brands able to live stream increases, we are likely to see more growth in both the depth and sophistication of the available content.
If LinkedIn can expand the offering to more creators while maintaining the quality of both the output and the service, it could not only be the new platform to watch but also the one most likely to deliver significant growth and success in 2020.
A final development in the corporate space was Amazon's introduction of live streaming onto product pages in Europe, something that is likely to expand significantly in the next year. This capability, currently available in Germany and the UK, enables live streams to be displayed on both product and campaign-specific pages, with interactive elements such as Q&A and polling, while being delivered through the app, the webpage, and Fire TV.
The initial uses of the functionality for streams such as live mobile phone launches and interactive whisky tasting have shown a great deal of promise, so it will be interesting to see how the functionality will be refined and made more available in 2020. Certainly, in terms of creating bespoke products for live stream to engage audiences, it offers a unique proposition.
With the surprise acquisition of Ooyala and the strong emergence of some new platforms, 2019 was a year of potentially definitive shifts in the overall market. The emergence of Stream, while not yet a viable alternative to the Qumus and Brightcoves of the world, does suggest some of the established players will have to redouble their efforts to differentiate themselves in a crowded market, with Microsoft offering at least some of its functionality for "free." For those with a smaller and more specific market share, such as IBM and Panopto, specialisation looks like the way forward to leverage their unique strengths.
Could more consolidation be in the cards? Possibly, as I think after an IPO or even before, Kaltura looks like it may be acquired by an existing partner to augment their own offering, with Oracle being an obvious candidate.
In general, however, we are looking at 2020 as a year with a significant amount of growth in the general market, while the various second-tier platforms exploit their niches and the brand-new offerings endeavour to massively expand their reach.
Brightcove, Qumu, Kaltura, and other platforms' expansion will likely continue even while they keep one eye on which platforms are catching up behind them.
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