5 Questions With the CTO of Livepeer on Its Business and Funding
Could your next video encoding provider be an anonymous cryptocurrency miner with extra server capacity? Decentralized video encoding startup Livepeer wants to make that a reality. Before scoffing at the idea, consider that the company announced an $8 million Series A round last year, and that Haivision and a former Brightcove CEO are already onboard.
To hear more about what sets Livepeer apart, we sent five questions to founder and CTO Eric Tang. Here's what he said:
What’s the idea behind your company? What does it mean to offer decentralized video encoding?
Livepeer is building an open, reliable video infrastructure to power the internet. Today, 80% of all internet's bandwidth is consumed by video streaming. The Livepeer protocol allows an open and transparent marketplace to naturally form between encoding providers with excess capacity and application developers who need streaming services. This marketplace unlocks the hidden encoding capacities around the world to make video services truly affordable and reliable.
For example, the millions of GPUs owned by crypto miners has the idle capacity to handle video encoding using the ASIC encoding/decoding chips onboard. The Livepeer network allows the miners to efficiently share their resources and be properly compensated for it. Excess compute power like this can drive prices down to over 10 times more affordable than incumbent streaming providers, and in the process, significantly improving reliability for streaming workflows.
To the application developers, using decentralized video encoding is a more flexible, more reliable, and more affordable way to run your infrastructure using open source software and a transparent marketplace for encoding services. It is as easy as using an API or a plugin for your existing media server.
What encoding formats and codecs will you support?
Livepeer currently supports RTMP and HLS in H.264, but this is just a starting point. Since the codebase is open source, anyone can decide to add more video formats like MPEG-DASH or codecs like VP8/9. With the rise in popularity for low-latency formats like CMAF and LHLS and next-generation codecs like AV1, they will likely be added into the codebase soon as well.
So people/companies with extra capacity can earn Livepeer Tokens by being part of your P2P network. Why would they want that? What do LPTs get them?
People with extra capacity will currently earn Ether. And over time, they will be able to earn any digital currency they prefer. We think, in the long-term, people will likely prefer to earn price-stable digital currencies with the value equivalent to dollars.
LPT represents security of the Livepeer network for participants. It's kind of like a "security deposit" for people who want to provide services for others. And if they act maliciously, their deposit is taken away. LPT is rewarded to good participants so they can continue to expand the services they offer on the network.
Your site says you're making possible business models that aren’t possible with current video encoding models and costs. What does that mean? Who are your target customers?
Current business models for video applications are limited by the high cost of video infrastructure. It's very difficult to create a profitable video application based on advertising when you have to subsidize the infrastructure cost. With Livepeer, application builders will have more options with an infrastructure that's 10x more affordable and truly "pay-as-you-go." We have spoken with many entrepreneurs in the industry who pointed out use cases or content types that are simply too expensive to offer with the current video infrastructure options. Just like the reduction in web infrastructure pricing brought us a tremendous amount of innovation through new types of web applications, Livepeer aims to enable the next wave of innovation in the video industry through unlocking new use cases and content types.
The decentralized nature of Livepeer also has interesting implications. Combining with the usage of digital currency, we can see interesting new opportunities for developers in the future. For example, app developers can use micropayments and ask users to pay for the video sessions based on infrastructure cost. They can also use virtual goods as incentives for users of the application to contribute their bandwidth/local compute to the application itself.
In a world of full automation, instant and permission-less payment is a requirement for autonomous agents to interact with each other. Without it, there is always room for manipulation or a governance cost overhead. This is not only true for P2P video transcoding but any form of decentralized marketplace.
Contrats on the $8 million in Series A funding. Who are your investors? And what will you do with the capital? When do you expect to fully launch?
The series A funding for Livepeer is led by Northzone. Additional participants include Digital Currency Group, Libertus, Collaborative Fund, Notation Capital, Compound, North Island, Coinfund, and StakeZero. Also participating were video technology company Haivision, inventors of the SRT protocol and industrial encoding leaders, and Ben Rubin, founder of video applications Houseparty and Meerkat. David Mendels, former CEO of Brightcove, has joined the company as an active advisor as well.
The Livepeer network has been live for over a year. Today, developers can integrate Livepeer inside their apps by downloading the node, running the Livepeer media server and funding their account with Ethereum. With the new capital, Livepeer Inc. is helping bootstrap the demand for the decentralized network by developing products that will bring more videos onto the network, starting with a media server plugin. If you are already using a media server, you'll be able keep your existing workflow and tech stack, and simply plug into the Livepeer network for video encoding through the plugin. Engineers who need live video encoding with guaranteed reliability, on-demand, at scale, are invited to join Livepeer as a design partner. We’re providing five companies who join as design partners with free live video encoding for 6 months, up to 100 concurrent streams.
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