Posts for 'Digitalsmiths'

continue reading

Video metadata solutions provider Digitalsmiths has closed a $12.5 million Series C round, led by strategic investor Technicolor, with participation by existing investors .406 Ventures, Aurora Funds, Chrysalis Ventures, Capitol Broadcasting and Cisco. With the financing Digitalsmiths has raised a little over $30 million.

continue reading

continue reading

continue reading

Following are 4 items worth noting for the Dec 14th week:

1. New pre-roll data shows format's strength - Though many in the industry still scorn the pre-roll ad, this week 2 ad networks, ScanScout and YuMe, released data showing its continued prevalence as well as innovation that's improving its performance. ScanScout said its "Super Pre-roll" unit, which allows for integrating overlay graphics on the video that viewers can engage with, is driving 350% higher click-through rates compared with typical pre-rolls. In this example for Unilever's Vaseline, note how the creative nicely reinforces the messaging. The enhanced interactivity feels like the start of a new trend; another pre-roll that offers something similar is Innovid's iRoll unit. ScanScout separately announced this week a host of new premium publishers have joined its network.

Meanwhile YuMe released its Video Advertising Metrics Report for Jan-Nov '09, which showed that, at least within YuMe's network, 90%+ of all ads served were pre-rolls, with 30 second spots generating a 1.8% overall click-through rate, a 50% higher rate than the 1.2% that 15 second spots achieved. The volume of 30 second ads also grew 50% faster than 15 second volume in Q3 '09. Kids age 6-14 achieved a 3.7% click-through rate, the highest of any group, which YuMe's Jayant Kadambi told me could be explained by the more engaging nature of child-focused ads (e.g. click to play games, etc.). Jayant believes the sizable amount of existing creative for TV ads that can be easily repurposed for online is a key reason pre-rolls continue to dominate.

2. Paramount clipping site powered by Digitalsmiths is slick - I was impressed with a demo of Paramount Pictures' newly launched ParamountClips.com site that I got this week. The site is only open to Paramount's business partners, allowing them to either choose from an existing stock of clips from over 80 different Paramount movies, or to easily create their own. Desired clips are moved into a shopping cart and released for download, per previously determined licensing terms.

The site is powered by Digitalsmiths, which indexed all of the scenes from the movies using their proprietary recognition process, and then generated meta-data for each, which makes searching a snap. The new self-service site replaces the laborious previous process of a Paramount staffer working with each partner to extract jus the scene they want. As a result, a new highly-scalable licensing opportunity has been created. Paramount is taking advantage of Digitalsmiths VideoSense 2.5 release announced last week that is focused on clip generation, for both on demand and live streams, improved asset management and more integrated reporting.

3. Thwapr launches beta of mobile-to-mobile video sharing - Continuing the buildout of the mobile video ecosystem, Thwapr, a new mobile-to-mobile content sharing platform, launched its beta this week. Duncan Kennedy, Thwapr's COO told me that although there's been a proliferation of video capable smartphones, there's currently no easy, fool-proof way of sharing videos from one device to another (e.g. from an iPhone to a BlackBerry). Enter Thwapr, which lets the user upload videos to Thwapr and then have them shared with their contacts. Thwapr identifies the receiving phone's "user agent" so that it can dynamically decide the optimal format the video should be viewed in. The user simply clicks on a link and the video plays. I can attest that it worked beautifully on my BlackBerry Pearl.

Thwapr's raised about $3 million from angels and has a very strong team, including Duncan and others who worked on Apple's QuickTime. I'm a fan of how video, social/sharing and mobile intersect to create new opportunities, though there are business model unknowns. For now Thwapr is focused on a free ad-supported model, with a particular emphasis on geo-tagging videos to make advertising especially appealing for local merchants. Still, YouTube has illustrated how difficult it is to monetize user-generated content. Thwapr also envisions a business-grade option for real estate, travel, dating type applications which sound promising. I wonder too about whether a freemium model should be explored, though Duncan said Thwapr's analysis suggested this would be a relatively small opportunity. We'll see how things shape up.

4. Next week is 2009 wrap-up week on VideoNuze - Keep an eye on VideoNuze next week, as I'll be summarizing Q4 '09 venture capital investments and deals in the broadband/mobile video space, reviewing my 2009 predictions and looking ahead to what to expect in 2010. It's been an incredibly active year and based on the pre-CES briefings I've been doing, there's lots more to look forward to next year.

Enjoy your weekend!

Surely one of the most enduring questions I and others who watch the online video industry are asked (and in fact often ask ourselves) is: How can video management and publishing platform companies continue to launch, even as the space already seems so crowded?

Personally I've been hearing this question for at least 6 years, going back to when I consulted with Maven Networks, whose acquisition by Yahoo was one of the few industry exits (and likely the best from an investor ROI perspective, regardless of the fact that it was shut down little more than a year later as part of Yahoo's retrenching. With yesterday's launch of Episodic and the recent launch of Unicorn Media, plus last week's $10M Series C round by Ooyala, it's timely to once again try to make sense of all the activity in the platform space.

The best explanation I offer traces from my Econ 101 class: supply is expanding to meet demand. Over the past 10 years, there has been an enormous surge of interest in publishing online video by an incredible diversity of content providers. Importantly, interest by content providers has intensified in the last few years. I can vividly recall 2003 and 2004, trying to explain to leading content providers why online video was an important initiative to pursue. Still, their projects were often experimental and non-revenue producing. Contrast this with today, where every media company on earth now recognizes online video as a strategic priority.

But even as online video's prioritization has grown, many media companies don't have all the strategic technology building blocks in place. In fact, many continue to use home-brewed technology developed a while back. The range of video features needed continues to grow and evolve rapidly. Consider how requirements have expanded recently: live, as well as on-demand video; long-form programs as well as clips; paid, as well as ad-supported business models; mobile, as well broadband distribution; multiple bit rate, as well as single stream encoding; in-depth analytics as well as top-line metrics; widespread syndication as well as destination-site publishing; off-site, as well as on-site ad management. The list goes on and on.

As media company interest has grown, technology executives and investors have taken note. Venture capital firms continue to see online video as a high-growth industry (even if the revenue model for content providers is still developing, as are many of the platforms' own revenue models), with significant macro trends (e.g. changing consumer behavior, proliferation of devices, improved video quality, etc.) as fueling customer interest. Another important factor for platforms is rapidly declining development costs. As Noam Lovinsky, CEO of Episodic told me last week, open source and other development tools has made it cheaper than ever to enter the market with a solid product. With ever lower capital needs, a new video platform entrant that can grab its fair share of the market has the potential to produce an attractive ROI.

Of course all the noise in the platform space means media executives need to do their homework more rigorously than ever. I'm a strong believer that the only way to really understand how a video platform works, how well-supported it is and how well-matched it is to the content provider's needs is to vigorously test drive it. Hands-on use reveals how comprehensive a platform really is, or how comfortable its work flow is, or how well its APIs work. While I get a lot of exposure to the various platforms through the demos I experience and the questions I ask, I'll readily concede this is not the same as actually living with a platform day-in and day-out.

Another complicating factor is that while there are some companies purely focused on video management and publishing, there are many others who offer some of these features, while positioning themselves in adjacent or larger markets. When I add these companies in, then the list of participants that most often hits my radar would include thePlatform, Brightcove, Ooyala, Twistage, Digitalsmiths, Delve, KickApps, VMIX, Grab Networks, ExtendMedia, Cisco EOS, Irdeto, KIT Digital, Kaltura, blip.tv, Magnify.net, Fliqz, Gotuit, Move Networks, Multicast Media, WorldNow, Kyte, Endavo, Joost, Unicorn Media and Episodic (apologies to anyone I forgot). Again though, this list combines apples and oranges; some of these companies are direct competitors, some are partners with each other, some have a degree of overlap and so on.

There's a long list of platforms to choose from, yet I suspect the list will only get longer as online and mobile video continues to grow and mature. At the end of the day, who survives and succeeds will depend on having the best products, pricing the most attractively and actually winning profitable business.

What do you think? Post a comment now.

Following are 4 news items worth noting from the week of Sept. 14th:

1. Ad spending slowdown continues - TNS Media Intelligence reported that 1st half '09 U.S. ad spending declined 14.3% vs. a year ago, to $60.87 billion. Spending in Q2 '09 alone was down 13.9% vs. a year ago, the 5th straight declining quarter. The only bright spots TNS reported were Internet display ads (up 6.5%) and Free Standing Inserts (up 4.6%).

Rupert Murdoch and others in the industry have lately been suggesting that advertising is starting to improve and that the worst is behind us. But TNS SVP Research Jon Swallen was less sanguine, saying only that "Early data from third quarter hint at possible improvements for some media due to easy comparisons against distressed levels of year ago expenditures." While the online video ad sector has held up far better than most, the ad spending crash has caused many in the industry to re-evaluate whether ad-only models are viable, particularly for long-form premium content online. Subscription-oriented initiatives will only intensify the longer the ad slowdown lasts.

2. Veoh's court victory is important for all in the industry - I'd be remiss not to note the significance of U.S. District Judge A. Howard Matz's granting of Veoh's motion for summary judgment, effectively throwing out Universal Music's suit alleging Veoh had infringed UMG's copyrights. Judge Matz articulated the specific reasons he believed Veoh operated within the "safe harbor" provisions of the DMCA.

As a content producer myself (albeit at a completely different level than a music publisher or film studio!), I've generally been a huge advocate of copyright protection. But the fact is that DMCA - for better or worse - set out the rules for digital copyright use and they must be enforced clearly and forcefully. Anything less leaves the market in a state of confusion, with industry participants wary of inviting costly, time-consuming legal action (Veoh has said the UMG suit cost it millions of dollars in legal fees). For online video to thrive the rules of the road need to be well-understood; Judge Matz's ruling made an important contribution toward that goal.

3. Digitalsmiths announces new senior level hires - This week Digitalsmiths announced that it has brought on board Josh Wiggins as its new VP, Business Development, West Coast and two others, who will collectively be the company's first L.A.-based presence. They'll report in to Bob Bryson, SVP of Sales and Business Development.

I caught up with Digitalsmiths' CEO Ben Weinberger briefly, who explained that with tier 1 film/TV studios and other content owners (news, sports, etc.) the company's major focus, it was essential to have a full-time presence there staffed with people who know the industry cold. Ben reported that the company has honed in on target customers who have very large files, have video as their core business/revenue center, require sophisticated metadata management and often need a rapid video capture, processing and playout workflow. Digitalsmiths is proving a solid example of how to effectively differentiate through product and customer focus in a very crowded space. Announced customers include Warner Bros., Telepictures and TMZ.com, others are in the hopper (note Digitalsmiths is a VideoNuze sponsor).

4. New EmmyTVLegends.org site is a worth its weight in gold - On a somewhat lighter note, this week the Academy of Television Arts & Sciences Foundation unveiled EmmyTVLegends.org, which offers thoughtful, introspective video interviews with a wide range of TV's most influential personalities. If you have nostalgia for the classic TV shows from your youth, or just appreciate the amazing talent that has made the medium what it is, this site is for you. It is remarkably well-organized and accessible and brilliant proof of online video's power in presenting invaluable material that was previously available only to a lucky few.

I happily got lost in the site listening to Alan Alda talk about the fabulous writers of M*A*S*H and Steven Bochco describing the magic of "Hill Street Blues." I searched by "Happy Days" and quickly found the exact clips of Ron Howard talking about the role of his "Richie Cunningham" character in the show's arc and Henry Winkler revealing the influence of Sylvester Stallone on how he developed the voice of "Fonzie." Mary Tyler Moore is irresistible discussing specific scenes of the Mary Tyler Moore show and her poignant memories of Mary Richards navigating the working world. Kudos to the Academy, the site is a gem.

Enjoy the weekend and L'shanah tova (Happy New Year) to those of you, who like me, will be observing Rosh Hashanah this weekend!

This morning Kaltura takes the wraps off its "Community Edition" open source video platform, available as a free download, thereby threatening to disrupt its established proprietary competitors (e.g. Brightcove, thePlatform, Ooyala, Digitalsmiths, Fliqz, Delve, VMIX, etc.). Yesterday Kaltura's CEO Ron Yekutiel explained open source and Community Edition's opportunity. Later in the day I spoke to executives at many of its competitors to get their take what impact open source will have on the video platform market.

As a quick primer, open source isn't a novelty; it's a standard way that certain kinds of software are now developed. Successful companies like Red Hat have been built around open source. In fact many of today's web sites run on the open source software stack commonly known as "LAMP" - Linux (OS), Apache (web server), MySQL (database) and Perl/PHP/Python (scripts). Kaltura has been pioneering open source in the video platform industry which has been dominated by proprietary competitors. Ron believes the video platform industry is ripe for open source success because it has too many proprietary companies offering minor feature differences, all using a SaaS model only and competing too heavily on price.

Kaltura Community Edition's three big differentiators are that it's free for the base platform and offers greater control through self-hosting which can be behind the customer's firewall. Ron also believes that by tapping into the open source community, CE can offer more flexibility and extensibility than its competitors.

As with all open source options though, free isn't "free," because if you're interested in support and maintenance, professional services for customization and certain features like syndication, advertising, SEO and content delivery, these all cost extra. And you can't forget about the costs of the internal staff you'd need to run the video platform or the costs of the infrastructure itself (servers, bandwidth, storage, etc.). In the SaaS world, many of these costs are borne by the provider and then reflected in the monthly fee. Determining which approach is more cost-effective depends on your particular circumstances and needs.

When it comes to features, clearly the ability to download CE and self-host is a big differentiator, and will be valued by segments of the market. As Ron pointed out, there are government agencies, universities and others who have mandates to self-host. He also noted that by customers' gaining access to CE's code, their ability to integrate with other applications and customize is enhanced (though again, not without an additional cost).

Other industry executives countered that unless you have to self-host, these advantages are diminished by the fact that in this capex and opex budget constraints make SaaS more appealing than ever, especially for smaller customers with less in-house technical expertise. They added that they're rarely asked about self-hosting options (though that could well be due to self-selection).

Further, many of the leading video platform companies offer a slew of APIs, which open their platforms to 3rd party developers without needing to be open source per se (examples include Brightcove's and thePlatform's robust partner programs). Another industry CEO noted that while there's a gigantic and highly active open source community in the LAMP world, it remains to be seen just how vibrant it is in the video space. And it's important to remember that the intense competition among today's video platforms have already driven the feature bar quite high.

So the question remains: will Kaltura's CE open source approach truly disrupt the video platform industry, causing rampant customer switching and gutting today's pricing models? My sense is no, or at least not immediately. Instead, Kaltura will definitely grow the market, creating new video customers from those who have been dissatisfied with current choices or have not yet jumped into video, but inevitably will. CE will likely peel away some percentage of existing proprietary customers who have been eager for a self-hosted, open source alternative. For many others though, they'll be keeping an eye on open source and will successfully push their existing providers to adopt similar capabilities if they're valued.

What do you think? Post a comment now.

This morning Digitalsmiths, a leading video platform company, is launching VideoSense 2.0, a suite of content management, publishing, presentation and search products. In particular, the new release includes an innovative "free form" video search box that leverages Digitalsmiths' metadata creation capability. Last week I spoke to Ben Weinberger, Digitalsmiths' CEO to learn more.

A key Digitalsmiths' strength has always been its metadata tools, which use a broader, proprietary set of algorithms such as facial recognition, scene classification and object identification. With this release the metadata tags are being organized into what Digitalsmiths' calls a "MetaFrame" - a frame-by--frame analysis of the video file(s) that are all based on time stamps. A MetaFrame in turn enables more accurate video search, content organization and monetization both within a video and across a library of videos.

With respect to video search specifically, Ben explained that VideoSense's search technology matches the submitted term against a video library to return results based on criteria like names, locations, dialogue, objects within a scene or other criteria the content owner specifies. The content owner can also tweak the rules so that specific criteria receive higher weighting. Results are typically returned in half a second or less, providing a video search experience close to what we've come to expect in web search. There's also a "Did you mean?" prompt for more refined results. The free form search box can be integrated onto any web page via an API.

The below example shows the results of a search Ben ran in the demo against a customer's library (unfortunately blurriness is added here due to customer confidentiality).

Of course the more valuable the experience is, the more video is likely to be consumed, generating more streams and ad inventory. Ads too can gain better targeting through MetaFrame processing (and VideoSense is integrated with all the major video ad servers and networks). Deeper, richer search can also power B2B use of video clips, such as when a specific scene from one video is to be incorporated into another (think of a movie like "Forest Gump" that has myriad historical scenes interspersed).

From my perspective metadata is going to become more and more important as the sheer number of videos available explodes with both long-form and derivative short clips. Content owners' key challenge will be to manage these ever-larger libraries (Ben uses the notion of "metadata as the glue" holding libraries together; I think that's an apt description). Others like EveryZing, Grab Networks and Gotuit have also recognized the importance of metadata and have their own approaches. For Digitalsmiths, a differentiator is its focus on extremely large files and its focus on studio customers. It aims to function as a full-blown video platform provider for all forms of digital distribution.

Ben said Digitalsmiths has a slew of customers it will be unveiling in the coming weeks that are using MetaFrame and the VideoSense 2.0 suite.

What do you think? Post a comment now.

(Note Digitalsmiths is a VideoNuze sponsor)

Digitalsmiths has added to its executive team, hiring Bob Bryson as SVP of Sales and Business Development and Melissa Sargeant as VP of Marketing. Both are industry veterans; Bob was most recently in a similar role at Move Networks and Melissa was director of product marketing at CA.

Digitalsmiths has been expanding beyond its roots in indexing by also offering content management and publishing solutions. In Q4 '08 it raised a $10M round, and in Q1 '09 it received a strategic investment from Cisco. The hirings continue a trend I see throughout the industry - companies with traction are able to continue to raise money and bring on new talent. Other recent examples include Betawave, Brightcove, ExtendMedia and Tremor Media.

Digitalsmiths is announcing this morning that Cisco has invested an undisclosed amount in the company. The deal adds onto Digitalsmiths' $12M Series B round from a couple months ago, led by .406 Ventures. Digitalsmiths has been building momentum in the video indexing and content management/publishing space and the Cisco investment is a nice validation for the company, particularly in this bruising economic climate. I talked to Digitalsmiths' (which is a VideoNuze sponsor) CEO/co-founder Ben Weinberger on Friday to learn more.

The deal was shepherded by the Cisco Media Solutions Group, which recently announced the general availability of its Eos (Entertainment Operating System) social media platform at CES. This follows a period of relative quiet for Eos. Almost 2 years ago I moderated an NAB Show Super Session panel which included Dan Scheinman, the SVP/GM of CMSG who was then just beginning to talk about Eos.

As Ben explained it, Digitalsmiths' indexing and video management will allow Eos to offer more advanced, targeted advertising capabilities to its customers. That certainly puts it in line with marketers' increasing desire for maximum context and ROI for their dollar. Improved navigation and a strong focus on monetization have been two critical Digitalsmiths' competitive differentiators.

At a broader level, Ben described how other Cisco groups began taking interest in Digitalsmiths during the due diligence process. In particular, the idea of Digitalsmiths-generated video metadata and indexing could become an interesting fit for Cisco's other products (remember that through its 2005 acquisition of Scientific-Atlanta, Cisco became one of the biggest suppliers of set-top boxes to video service providers. Cisco's also a leading maker of broadband access/routing infrastructure and in-home networks through Linksys).

Still, realizing this value is well down the road and will require working across multiple groups each with multiple priorities. For example, anything involving advanced advertising in the cable industry will also have to align with the growing role that Canoe is going to play in the industry. For now the upside of the Digitalsmiths investment is in how Eos leverages the company's technology.

Eos is a newcomer to the social media platform space, which has evolved considerably over the last two years. KickApps, Pluck and others have made a lot of headway in the media and entertainment vertical Eos is targeting; other verticals like sports, brand marketing and enterprise have also recently started to grow.

I have to admit that even after watching this almost year-old video of Dan explaining Eos, I'm still not sure I fully understand the role of Eos as a standalone offering from Cisco, especially when I read recently that its business model is a combination of a "nominal license fee and an ad revenue split." I mean, is there really enough financial upside in a hosted social media platform for mighty Cisco (fiscal Q1 '09 revenues of $10.3B) to pursue it? It's also worth asking whether Cisco has sufficient core software platform development competencies in this area. Certainly Cisco has plenty of financial muscle to back Eos, but is that enough to succeed in the crowded and scrappy social media space?

Yet another piece of this to consider is how players like Facebook and MySpace fit in at the intersection of social media and video. While neither is offering a white label platform (nor do I expect them to), last week's CNN/Facebook inauguration effort exposed the possibility that some major media companies may simply try to marry their video to these existing audiences. I've been a big fan of making broadband video more engaging through social applications but I'm cognizant that doing so is easier said than done. With resources increasingly scarce, some media companies may need to rethink how social they can afford to be.

For Eos, incorporating Digitalsmiths effectively would be a big help and could lay the foundation for other Cisco groups to benefit down the road as well. If Cisco's truly committed to the social media platform space this story will unfold over many years.

What do you think? Post a comment now.

I got a tip yesterday about "Game Rewind," a feature that NFL.com has apparently launched in the last week or so. For a mere $20/season, you can now watch full, commercial-free replays of all the season's games. The video is delivered in terrific quality by Move Networks, and as seen below, also offers a side window that shows a synopsis of the game's scoring. I'm not a huge football fan, but since I missed the exciting end of last week's Patriots-Seahawks game, I simply dragged to the fourth quarter and sat back and enjoyed (btw, how nice is it to watch commercial-free?!).

One suggestion for the NFL team: introduce EveryZing's MetaPlayer, Gotuit VideoMarkerPro or Digitalsmiths (or someone else's metadata-based search technology) so that fans can quickly retrieve only the highlights they care about (especially for the fantasy crowd). If I just want to see Matt Cassel's touchdown passes, it would sure be nice to enter that phrase and be shown those specific highlights only. Still, Game Rewind is a very cool new feature, of course only possible courtesy of broadband delivery.

What do you think? Post a comment now.

1. What are the key success factors for raising money given the difficult economic climate?
2. What are the biggest challenges?
3. Is there any specific advice you'd offer to those trying to raise money these days?

While there were some common themes in their answers (many of which echoed the usual fundraising maxims), there was plenty of variety and a few outliers. Space constraints don't allow for me to share all of their specific answers, so I've tried my best to summarize the common themes and highlight key nuggets of wisdom below. If you have any questions, drop me an email.

The seven CEOs who graciously took time out of their busy days to contribute their thoughts (along with the recent rounds they've raised) are:

• Amir Ashkenazi, Adap.tv ($13M Series B, 9/23/08)
• Frank Barbieri, Transpera ($8.25M Series B, 11/13/08)
• Alex Blum, KickApps ($14M Series C, 11/25/08)
• Dean Denhart, BlackArrow ($20M Series B, 10/6/08)
• Keith Kocho, ExtendMedia ($10M Series C, 12/2/08)
• Steve Rosenbaum, Magnify.net ($750K Series A1, 11/21/08)
• Ben Weinberger, Digitalsmiths ($12M Series B, 11/13/08)

1. What are the key success factors for raising money given the difficult economic climate?

The answers that dominated were all around revenue, profitability and cash flow. All the CEOs mentioned, in one way or another, that being able to demonstrate real revenue growth and momentum is essential. Some noted that in the past traffic or usage may have been sufficient, but now the "premium is on paying customers," and how get to profitability and cash flow breakeven using reasonable assumptions. Several mentioned that investors are as risk averse as ever, which of course comes as no surprise. They want to see concrete, well thought-out plans.

Investors have also become more sophisticated about the whole broadband video sector and expect entrepreneurs to be able to explain where they fit into the ecosystem and what their points of differentiation are. Importantly, they are looking for proven models (unfortunately an oxymoron for a pure startup), or at least some minimal history of success that goes "beyond PPT slideware."

A couple of CEOs noted that investors have shifted from asking "how fast can you scale?" to "how will you get through this crisis?" They no longer expect a quick exit. They are looking for a real plan which includes contingency tactics if for example, competitors do something desperate like cut their prices in half.

2. What are the biggest challenges?

The prevailing theme here was uncertainty, starting with investors' own business models. They're focused on how much of their funds to hold in reserve to shore up existing portfolio companies. They're trying to gauge their own limited partners' appetite for venture investing given the credit squeeze. Then of course they're trying to understand the impact of broadband market drivers like ad spending and user adoption. One CEO lamented the difficulty of persuading people to put new money to work on the very day the stock market's dropping by 500 points. Still another noted that all of this can lead to a "self-fulfilling prophecy" where everything freezes and missed opportunities abound.

With respect to the broadband market specifically, one CEO said the key challenge is showing how "you monetize video for your clients." Absent that, "it will not only be hard to raise money, but harder still for your client to spend money with you."

Another said that the level of scrutiny has gotten so high that it's not even worth talking to any investor which doesn't have its own track record of investing in the broadband video sector. It's just too hard to educated people in this environment. Another CEO added that your model needs to be "brilliant and bulletproof, with an A-level management team already in place." Boy, there's a steep hurdle to clear.

3. Is there any specific advice you'd offer to those trying to raise money these days?

Many of the answers to this question reflected fundraising basics: understand your business thoroughly, put a balanced team in place, seek out investors you know first, have a solid plan, and bootstrap as much as possible first.

With respect to the raising money in the current lousy market, there was a broad range of sentiment. One CEO said "Don't...the terms are going to suck..." while another said to be "incredibly realistic about how much to raise, your burn rate and valuation." On the more optimistic end of the spectrum, one said "The market's poor performance means that investors are looking for new opportunities. Ignore all the negative energy and naysayers." And another remarked that "Even during the tech disaster of 2001-2003, angel investors, VCs and tech behemoths were still putting money to work in promising sectors." Another heavily emphasized the value of loyal and supportive existing investors (if there are any) in helping making the case to new investors.

More tactically, one CEO said that the more you "minimize uncertainty that surrounds your business specifically, the better off you'll be." Another said to make the transaction as simple as possible, and to "get the big items off the table first." Still another said to demonstrate "you're indispensable to customers, helping them weather the downturn." Finally one cautioned to be ready to take a lot more meetings than usual and expect a lot deeper follow up..."it may require you to go well beyond investors in your backyard to find the right fit."

Hopefully some of this is helpful to those of you trying to raise money right now, or thinking about doing so in the near future. Broadband video remains one of the hottest sectors out there; even still, if you're not getting a lot of love right now, you're not alone...

What do you think? Post a comment now.

Digitalsmiths is announcing a $12M Series B round this morning, led by .406 Ventures, with participation from existing investors The Aurora Funds and Chrysalis Ventures. The company started life focused on video search, but now appears well on its way to successfully morphing into a tier one video management/publishing platform with indexing and analytics serving as key differentiators. I caught up with Ben Weinberger, Digitalsmiths' CEO yesterday to learn more.

Ben explained that Digitalsmiths has been landing customers like TheWB.com, TMZ, Essence.com and others TBA by focusing heavily on helping these content providers monetize more effectively. Monetization is driven by Digitalsmiths' metadata creation and indexing technology that can transform high value content into easily navigable and searchable frame-by-frame segments (this can be seen at TheWB.com).

Improved monetization is the number one challenge for the entire broadband video industry as I've been saying for some time now, and the economic meltdown has only accelerated its importance. The simple fact is that the industry has to learn how to drive more consumption by moving users beyond simple linear playback, and then achieving an ever-higher ROI against each one of these streams with more inventive ad units.

Digitalsmiths is helping accomplish these objectives by first ingesting the whole video file, then running its indexing algorithms against it, and finally generating the individual segments. These segments are then more discoverable within the site's own search, but also, importantly, by the outside world, through improved SEO (note there are some relevant comparisons between Digitalsmiths and EveryZing and Gotuit, two other companies I've written about previously). As non-linear, user-friendly experience is the result.

Ben said that Digitalsmiths' market acceptance is also being fueled by an innovative, success-based business model that ties its customers' actual gains in video consumption and monetization effectiveness to the company's own compensation. This approach obviously helps instill customer confidence, all the more so in current difficult economic times.

I also spoke briefly yesterday with Maria Cirino, the partner at .406 Ventures who led the round. Of course, it's cliche that VCs think their portfolio companies are the be-all and end-all, but I thought a couple points Maria (who's a heavy hitter in the Boston technology scene due to her success as CEO/co-founder of Guardent, acquired by VeriSign in 2003) made were quite salient.

Specifically, when I asked her about concerns she had regarding the notoriously crowded field of video management/publishing companies that have been around for far longer, she recalled the once similarly crowded web search space, dominated by well-entrenched names (Yahoo, Lycos, Excite, AltaVista, etc.). Google entered late, but broke through by offering a demonstrably better product directly addressing users' key pain point (better search results and user experience). To be clear, Maria was not inferring Digitalsmiths is the next Google (!); rather her point was that "2.0 products" can gain significant traction by tightly focusing on the market's up-to-date needs, especially if they have game-changing technology.

For Maria, Digitalsmiths' proprietary metadata/indexing capabilities, tied directly to improved monetization, are its key ingredients. That's not to say there aren't other competitors bringing their own differentiators to the table, or that content providers' motivations are monolithic, or even that there won't sufficient business to go around for a while. However, in Maria's mind, the key to Digitalsmiths' current success has been to hone in on the market's most critical decision-making driver (i.e. better monetization) and deliver against it.

I'm practically a broken record on the video management/publishing space, as I continue to marvel at the sheer number of competitors and the amount of money invested in the space as indicators of the broadband video industry's ascendance. This space has a lot more room to run and chapters to be written. It's also inevitable that the big boys will eventually follow Comcast and Yahoo (which have acquired thePlatform and Maven, respectively) in, by making their own acquisitions.

What do you think? Post a comment now!

(Note: Digitalsmiths is a VideoNuze sponsor)

EveryZing, a company I wrote about last February, is announcing the launch of its MetaPlayer today and that DallasCowboys.com is the first customer to implement it. My initial take is that MetaPlayer should have strong appeal in the market, and could well shake things up for other broadband technology companies and for content providers. Last week I spoke to EveryZing's CEO Tom Wilde to learn more about the product.

MetaPlayer is interesting for at least three reasons: (1) it drives EveryZing's video search and SEO capabilities inside the videos themselves, (2) it provides deeper engagement opportunities than typically found in other video player environments and (3) it enables content providers to dramatically expand their video catalogs, while maintaining branding and editorial integrity.

To date EveryZing's customers have used its speech-to-text engine to create metadata for their sites' videos, which are then grouped into SEO-friendly "topical pages" that users are directed to when entering terms into the sites' search box. Speech-to-text and other automated metadata generating techniques from companies like Digitalsmiths are becoming increasingly popular as content providers continue to recognize the value of robust metadata.

MetaPlayer takes metadata usage a step further by creating virtual clips based on specified terms, which are exposed to the user. A user's search produces an index of these virtual clips, which can be navigated through time-stamped cue points, transcript review, and thumbnail scenes (see below for example). The virtual clip approach is comparable in some ways to what Gotuit has been doing and is pretty powerful stuff, as it lets the user jump to desired points, thus avoiding wasted viewing time (e.g. just showing the moments when "Tony Romo" is spoken)

Next, MetaPlayer enables deeper engagement with available video. Yesterday, in "Broadband Video Needs to Become More Engaging," I talked about how the importance of engagement to both consumers and content providers. MetaPlayer is a move in this direction as it allows intuitive clipping, sharing and commenting of a specific video clip within MetaPlayer. Example: you can easily send friends just the clips of Romo's touchdown passes along with your comments on each.

Last, and possibly most interesting from a syndication perspective, MetaPlayer allows content providers to dramatically expand their video offerings through the use of what's known as "chromeless" video players. I was first introduced to the chromeless approach by Metacafe's Eyal Hertzog last summer. It basically allows the content provider to maintain elements of the underlying video player, such as its ability to enforce a video's business policies (ad tags, syndication rules, etc.), while allowing new features to be overlayed (customized look-and-feel, consistent player controls, etc.).

MetaPlayer takes advantage of chromeless APIs available now from companies like Brightcove, and also importantly YouTube. For example, the Cowboys could harvest select Cowboys-related YouTube videos and incorporate them into their site (this is similar to what Magnify.net also enables). With the chromeless approach, the Cowboys's user experience and their video player's branding is maintained while YouTube's rules, such as no pre-roll ads are also enforced.

To the extent that chromeless APIs become more widely available, it means that syndication can really flourish. The underlying content provider's model is protected while simultaneously enabling widespread distribution. All of this obviously leads to more monetization opportunities through highly targeted ads.

Bottom line: EveryZing's new MetaPlayer addresses at least three real hot buttons of the broadband video landscape: improved navigation, enhanced engagement and expanding content selection/monetization. All of this should give MetaPlayer strong appeal in the market.

What do you think? Post a comment now!

blinkx, which has been around as long as just about anyone in the video search space, is steadily building out its distribution network and advertising capabilities. I caught up with Suranga Chandratillake, CEO of blinkx, who's led the company since its spinoff from Autonomy, and successfully took the company public on London's AIM earlier this year.

Suranga said blinkx is now supporting 5 million searches/day and generating 50 million unique visitors/mo across its network. Network partners featuring a blinkx search box now include Ask.com, Real, Lycos, Infospace and scores of smaller sites that use blinkx's API. Suranga says blinkx can't distinguish between traffic coming from network partners vs. at blinkx.com itself. And the revenue splits in the business deals seem to vary widely, though typically they average out to 50-50. All deals are based on advertising, with the partner usually selling the inventory.

On the ad side, blinkx took a big step forward earlier this year, launching its "AdHoc" contextual ad program. Given the analysis blinkx is doing on video to drive search, it's a natural that the company now leverages this knowledge to improve targeting for ads. In fact, Suranga sees AdHoc as a sort of AdSense for video, dynamcially matching ads with relevant content.

With improved targeting of course comes improved CPMs. Suranga says they've seen CPMs as high as $66 through AdHoc. blinkx is relying on the scale of its 220+ content relationships and millions of impressions to make AdHoc work. Formats can vary but the one that has been most successful so far in a mid-roll banner with an invitation for user to click and engage. As I've written before, AdHoc plays in the same space as other contextual video ad companies such as ScanScout, Adap.tv, DigitalSmiths, AdBrite, YuMe and of course YouTube, plus others.

Both the contextual ad and video search spaces are growing increasingly crowded. Players recognize these are 3 interrelated Achilles heels of the current broadband video model: users finding desired content, content providers getting paid for their work and advertisers getting sufficient and well-targeted industry. blinkx seems well-positioned to address all three.