-->

Brightcove Acquires Zencoder

Article Featured Image

Brightcove's earnings announcement today came with two surprises: a significant increase in revenues and an acquisition announcement. Revenues increased by 41 percent, to $21.6 million, to end the quarter with a loss of $4.3 million, significantly lower than its first quarter loss. In addition, Brightcove announced it was acquiring Zencoder for $30 million.

Brightcove's chairman and CEO, Jeremy Allaire, said the acquisition isn't just about adding a service to its existing online platform, but also as an opportunity for Brightcove's existing and potential customers to use Zencoder as a standalone solution outside of the Brightcove Video Cloud platform.

"Zencoder not only strengthens our Video Cloud online video platform in a key technology area," said Allaire, "but it also signals our expansion into standalone cloud services that developers can use as building blocks for custom systems."

The idea of a standalone service plays to Zencoder's strengths as a cloud-based encoding solution, and a Zencoder blog post announcing the acquisition stated that the company will continue to operate as an independent entity.

"Zencoder will continue to operate as an independent service, but we will do so as a part of Brightcove," the blog post states. "Brightcove is a complementary company in the video space who believes in our developer focus, is committed to standalone API-based services, and will keep Zencoder operating largely as you see it today - only better, and with more resources behind us."

Zencoder had raised $2 million just four months ago, and has over 1,000 customers, only a few of which overlap Brightcove's 4,697 customers. The Zencoder blog post, perhaps in a bid to assure customers that Zencoder will remain independent, assures customers that they won't have to switch services.

"Brightcove offers a full-stack online video platform, but Zencoder customers will in no way have to switch over," the blog states. "Transcoding will remain a standalone service. Over time, don't be surprised if you see more standalone services from Brightcove."

The fact that Zencoder's blog post forecasts other standalone services is a bit odd, but it shows a bit of the trust growing between Zencoder and Brightcove management. In addition, it may show how quickly Brightcove is attempting to diversify in to a larger market share, especially as customers look to build their own standalone video platforms and streamlined workflows.

With Zencoder becoming the Bay Area research and development arm of Brightcove, there's also the question of what happens to the Brightcove competitors that Zencoder currently powers. According to the Zencoder blog post, there will be no intentional change to Zencoder's ability to power competing services and there may even be an increase in powering competitors' platforms.

"Zencoder provides encoding services to several of Brightcove's Video Cloud competitors," the blog post states. "We plan to continue to offer our services to anyone who wants high performance encoding in the cloud. We also believe that as cloud services continue to grow and mature, this will become more and more common."

Whether Brightcove is taking a gamble powering other competitors through Zencoder, or whether it sees this as a flanking maneuver that allows competitors to resell the Brightcove platform, remains to be seen. But Brightcove also gains an HTML5 video player that has several months of testing under its belt, which may be an enticement to competitors -- or select competitors' customers -- to join the Brightcove fold.

Streaming Covers
Free
for qualified subscribers
Subscribe Now Current Issue Past Issues
Related Articles

Yelp Adds User-Submitted Videos Powered by Brightcove, Zencoder

Reviewers can now upload short video clips from their iPhone apps; Android support should be coming soon.

Brightcove Talks Advanced Video Format Support at NAB

By adding support for broadcast video formats to Zencoder, Brightcove aims to help more organizations move to cloud workflows.

AOL Chooses Zencoder to Transcode 15 AOL On Video Channels

Cites Zencoder's support for Apple HLS and fast transcoding times as the reasons its making the move.

Brightcove Announces Video.js 4.0

Improvements include greater stability and performance in the first update since Brightcove acquired the popular player,

Zencoder Offers API for Live Cloud Video Transcoding

Brightcove's Zencoder now works with live video events, promising a simple cost-effective solution for publishers.

Brightcove Pushes HTML5 Video Forward with Monetization Plan

Publishers can tap into four video advertising networks to serve pre-, mid-, and post-roll video ads.

Brightcove Announces Live Cloud Transcoding and Instant Play

Just one month from its Zencoder acquisition, Brightcove is already benefiting. Also announces Widevine DRM encryption.

The 2012 Encoding and Transcoding Buyers' Guide

Discover the best hardware and software for video encoding and transcoding. We spotlight solutions from Elemental, Digital Rapids, Apple, Adobe, Sorenson, Harmonic, Telestream, Wowza, and Encoding.com.

Zencoder Says Pro Services, Speedy Cloud Encoding Set it Apart

In a competitive market, cloud video encoding company Zencoder is targeting the needs of large studios and enterprises.

Brightcove Offers Dual-Screen iPad Apps, Free App Cloud Edition

Unveiled at the Brightcove Play 2012 conference are features that extend the usefulness and lower the cost of App Cloud.

Brightcove Debuts App Cloud, Platform for App Development

Content companies can unify their iOS and Android development efforts, trimming costs and gaining centralized management.

Companies and Suppliers Mentioned