Brightcove Acquires Unicorn Media
Brightcove announced today its intent to acquire Unicorn Media via a mostly stock offering at an anticipated $49 million purchase price.
"Media companies are struggling to effectively deliver ad-supported video content to a fragmented landscape of platforms, including mobile devices” said Brightcove CEO, David Mendels in a press release announcing the acquisition.
Unicorn Media, which is a co-sponsor of the Second Screen Summit being held today in Las Vegas in conjunction with the Consumer Electronics Show (CES 2014), has mastered the art of maneuvering around ad blockers via a patented "stitching” technology.
StreamingMedia.com covered this technology, called Once, almost exactly two years ago, when we posited that MSNBC ads and video playback for on-demand content might be getting a "Once over” treatment. Later information confirmed that MSNBC had switched to Unicorn Media to deliver content.
Unicorn provides up to 4,400 customized strings that covered over 500 different devices, although the company pointed out in our earlier coverage that no more than 100 mobile devices account for about 99 percent of all video content consumed in the marketplace today.
Mendels noted that Brightcove holds the belief that "online video has the potential to surpass traditional TV by offering mass personalization, superior ad targeting, and frictionless distribution" but he also notes that media companies are concerned that 2013’s major viewing devices—set top boxes, connected living room devices, and PCs—are keeping pace in the cat-and-mouse game of blocking ads.
"A growing number of PCs have ad-blockers installed,” said Mendels.
Some estimates place the number of ads blocked on a typical PC as high as thirty percent, which accounts for a sizable revenue loss for both static and media-driven ad sales.
"Through the acquisition of Unicorn Media, Brightcove will empower media companies to address these challenges,” said Mendels.
Unicorn Media’s technology has been expanded over the past two years to cover live stitching, so it’s fairly easy to see where Brightcove could use this technology, especially given Brightcove’s purchase of Zencoder in mid 2013.
One technically savvy source noted that the tie-in between Zencoder and Unicorn’s Once, coupled together with a video.js based player, covers a large part of the ecosystem.
One difference between the Zencoder and Unicorn Media acquisitions is the branding and stand-alone nature of the former.
"Brightcove has acquired Zencoder as a business, to operate as an independent product line,” the Zencoder blog post noted in late July 2013. "Brightcove is committed to continuing the mission of Zencoder: creating the best suite of API-based media services in the cloud."
By contrast, Brightcove will continue to develop Once—which has 14 patents backing it—but now as a rebranded product called Brightcove Once, and many of Unicorn's employees, including founder Bill Rinehart, will join the Brightcove team.
"[Once] reduces or eliminates the need for platform-specific ad technology,” Brightcove's press release stated, adding that its customers could "reliably deliver live or on-demand video with dynamically customized programming and targeted advertising to the maximum range of devices.”
While pointing out the technical benefits of the Once service, Brightcove was also quick to point out the existing customers that use Once. Unicorn had significant customer traction—including NBC News, The Weather Channel, and sports giant ESPN—with ongoing revenues, which may have accounted for the $9.0 million cash as well the 2.9 million shares of Brightcove stock that are part of the total $49.0 million estimated purchase price.
See Dan Rayburn's blog post for his take on the Brightcove-Unicorn acquisition.
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