Cisco, Technicolor Invest in Metadata with Digitalsmiths

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Just a few months after Cisco's acquisition of Raleigh, NC-based Inlet Technologies, Cisco is participating in an investment round for another Research Triangle Park (RTP)-based company: metadata-focused Digitalsmiths. Other investors include Technicolor.

News of Cisco's participation in Digitalsmiths' $12.5 million expansion funding round is as important for Cisco as it is for Digitalsmiths, given Cisco's recent high-profile decision to "get out of video" in the consumer market. The death of the Flip camera, which was acquired for $590 million in 2009, leaves Cisco without an end-point strategy, a problem the company also faced for more than a decade in the videoconferencing industry until its acquisition of Tandberg.

With the Inlet acquisition, which complements the earlier Tandberg acquisition by being equal parts video—a growth area that John Chambers has long espoused as "the next big thing"—and networking, Cisco has an end-point strategy for both broadcast and bi-directional video transmissions over Cisco's core networking products.

The Digitalsmiths' investment could, on the surface, appear about as nebulous than the Flip investment of a few years ago. Yet the need to move to searching within videos—rather than just the video title or meta tags that are used in more simplistic searches on YouTube—will power more content moving across networks, fueling growth in Cisco's core networking business.

Technicolor, which we wrote about in March after it sold off the Thomson Video Network, led this round of investment—a strategic move for a company so tightly tied to Hollywood, Bollywood, and other premium content studios. In addition, existing investors  including .406 Ventures, Aurora Funds, and Chrysalis Ventures are also part of the expansion round.

Perhaps the most interesting existing investor is Capitol Broadcasting, a Raleigh-based conglomerate of traditional over-the-air broadcast and media outlets that also had a partial stake in Inlet Technologies. Capitol Broadcasting is also joining the most recent round, after having been an early investor in Digitalsmiths.

Ignoring, for a moment, claims in Digitalsmiths' press release that without its "ever-advancing video search and discovery products, the industry would be frozen in the dark ages"  it is worth noting the fact that relatively new Digitalsmiths is attracting another significant round of funding, even after other solutions have been available and in widespread use for more than a decade. 

The fact that one company has raised two recent rounds, while overall investment in metadata companies has been somewhat stagnant, raises an interesting question: just how problematic it is for indexing, search, and retrieval (ISR, the old name) or video discovery (the new name) to explain the market value of metadata to both enterprise and entertainment customers as well as to potential investors?

For its part, Digitalsmiths doesn't see metadata as the end game, but as an enabler to refine search and—by extension—video consumption.

"Our mission is to redefine video consumption," said Ben Weinberger, Digitalsmiths co-founder and chief executive, "by reaching the broadest array of devices with the most powerful video discovery platform available."

Weinberger has said in the past, and continues to emphasize, that metadata isn't just about being able to find content within a local repository, but is a key to unlocking the monetary potential of long-tail content tailored to individual users.

"Digitalsmiths is fanatical about video discovery, and has long worked to equip members of the video ecosystem with next-generation products to evolve search and recommendations," said Weinberger.

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