Brightcove aims to create video marketplace

Web sites select the services they want--ad placement in videos, a virtual video store, etc.--from a click menu on the Internet Protocol TV specialist's network. For example, a news site on extreme sports could get a feed on foreign surf competitions from an established news agency like Reuters, resell or syndicate its own clips to online outdoor-clothing merchants, and put ads in the videos it produces.

The services are free, but the Cambridge, Mass.-based company keeps 50 percent of the ad revenue generated via videos broadcast through its network in most cases, and 30 percent of product sales. Several advertisers have already lined up to place ads in the videos that Web publishers will broadcast using Brightcove's tools.

"Anyone in the world can launch a channel. You can use as much bandwidth as you want and you can generate revenue in a variety of ways," said Brightcove CEO Jeremy Allaire.

The company is also setting up a video-sharing site, similar to YouTube, but the company's main focus is to get individuals to integrate video on their own sites instead. In the future, consumers will turn away from portals and begin to get their videos straight from the producers, Allaire speculated.

"People don't go to Google to get content. They go there to find Web sites," he said. "The vast majority of content is not consumed in the portals. It is consumed on the Web."

Still, to get momentum, every video on a user's site that uses some of the Brightcove tools will automatically get posted to the company's video site.

Internet video has gone from a curiosity to one of the primary drivers of online traffic. YouTube founders cleaned up when they sold their company for $1.65 billion to Google. YouTube serves up more than 100 million videos a day, according to various traffic surveys, but analysts point out that the company has yet to fully capitalize on its advertising potential. The threat of copyright suits also hangs in the air.

These potential vulnerabilities give hope to companies like Revver, DaveTV, Metacafe and Brightcove that YouTube can be toppled. Google, after all, wasn't even formed until after analysts declared that the search market was already saturated.

Giving people a cut of the ad revenue is one of the techniques that Revver and Brightcove hope to exploit. Now if you put a video on YouTube, YouTube keeps all the ad revenue the video might generate.

The astounding number of Internet videos has also made navigation difficult. Companies such as IBM and Blinkx have proposed techniques such as image recognition search or searching on video dialog through speech-to-text technology.

Microchannels run by individuals ultimately might serve as a low-tech solution to the search problem, said Charles Moldow, a general partner at Foundation Capital, in a separate interview. Rather than go to generalist portals, consumers would gravitate toward sites with similar tastes.

"The more video becomes available, the harder it is for me as a consumer to figure out what I should watch," Moldow said. "The only way to do that now is to go to a site like YouTube and see what other people are watching. But I sometimes watch the most frequently viewed and think 'What a waste of time.'"

In some ways, Brightcove can be viewed as the anti-YouTube. YouTube came to prominence by giving individuals a centralized place to publish their videos. While pirated material and professionally made content gets onto the network, most of YouTube's programming comes from average people armed with a video camera. YouTube makes money through selling ads.

By contrast, Brightcove started by selling software tools to the likes of companies like Sony, Dow Jones, the Independent Film Channel and Newsweek, and has not catered to the hoi polloi. The videos and music delivered through its software are housed mostly on sites owned by the content providers themselves, not centralized portals.

"We've worked closely with the rights holders," Allaire said.