Posts Tagged ‘Zencoder’

Brightcove Grows Over 24% in Media Vertical during Q2

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Aug 12 2016

Brightcove, a provider of cloud services for video, reported revenue for the second quarter of 2016 of $37 million, a 13% increase over the second quarter of 2015, and a 1.9% increase over the preceding quarter, Q1 2016.  The revenue result was above management’s guidance of $35.8 million to $36.3 million issued during the first quarter of 2016.  brightcove

Commenting on the results, David Mendels, Chief Executive Officer at Brightcove stated, “Brightcove delivered strong second quarter results that met or exceeded our expectations from both a revenue and profitability perspective.  We are excited by the positive momentum we are seeing across our business, highlighted by the signing of multi-year, multi-million dollar contracts with two media customers, including our first 8 figure contract.”

During Brightcove’s subsequent call with earnings analyst, Mr. Mendels elaborated on the two media deals (noted above) landed during the quarter.  Both are large Japanese media companies (no additional details were provided).  One of the deals has a total committed value of more than $10 million over a 3.5 year period.

Brightcove provides services across several industry verticals including media.  Management disclosed its media business represented 51% of revenue for the quarter.  This compares to 46% during Q2 2015 and 51% Q1 2016.  These figures imply a year-over-year growth in the media vertical of 24.7% by Brightcove.

It is important to note Brightcove maintains a broad definition of media.  New or expanded customers in the media segment for the quarter included AMC and OTT service provider Pluto TV, as well as organizations such as Woven Digital and Yelp.

Gross margins for the quarter were 64%, a slight decline versus the 64.8% gross margins during Q2 2015, and a slight increase over the 63.4% gross margins from the preceding quarter.

Brightcove recorded a loss from operations of $2.2 million for the second quarter of 2016, compared to a loss of $3.2 million for Q2 2015, and a loss of $1.5 million in Q1 2016.

Net loss was $2.4 million for the quarter or $0.07 per diluted share. This compares to a net loss of $3.6 million or $0.11 per diluted share in Q2 2015 and a net loss of $1.6 million or $0.05 per diluted share in the preceding quarter, Q1 2016.

While Brightcove is not generating an accounting profit, it is generating cash.  Operating cash flow for the quarter was $2.0 million, an increase over the $385,000 generated during Q2 2015. In the preceding quarter, Q1 2016, operating cash flow was $2.9 million.

Revenue by Customer Type:

During the quarter, 95% of Brightcove’s revenue came from the Company’s premium offerings versus its volume offerings.  The volume offerings consist of Video Cloud express customers and Zencoder customers on month-to-month and pay-as-you-go contracts.

For the quarter the number of premium customers increased to 1,926 (as of June 30, 2016) from 1,910 at the end of the first quarter.  Average revenue per premium customer was $69,000 in the quarter, an increase of 8% when compared to last year’s quarter, and flat versus the first quarter of 2016.

Revenue by Service Type:

  • Subscription and support revenue contributed $35.1 million in the quarter, an increase of 10% versus the year-earlier period, and a 1.2% increase over the preceding quarter. On a percentage basis, Subscription and support revenue accounted for almost 95% of revenue in quarter.  This compares to 97.1%% of revenue for Q2 2015 and 95.5% for Q1 2016.
  • Professional services revenue was $1.9 million during the quarter, an increase of 101.9% over Q2 2015, and a 19% increase over Q1 2016. As a percentage of sales, Professional services contributed 5% of the total revenue for the quarter.  For Q2 2015, professional services accounted for 2.9% of sales and during Q1 2016 it was 4.5% of sales.

Revenue by Geography:

  • Revenues in North America were $22.6 million for the quarter, an increase of 7.4% against the year-over-year period, and a 1.9% decrease versus the preceding quarter. As a percentage of sales, North America was responsible for 61.2% of Brightcove’s revenue in the quarter, compared to 64.1% in Q2 2015 and 63.4% in Q1 2016.
  • The European region contributed $6.4 million, a decrease of 1.6% versus Q2 2015, and a 5.3% increase when compared to the preceding quarter. On a percentage basis, Europe accounted for 17.2% of total sales during Q2 2016, in comparison to 19.6% in Q2 2015, and 16.7% during Q1 2016.
  • Revenues in Asia Pacific (including Japan) were $7.7 million for the quarter, a 57.3% increase over Q2 2015, and a 12.2% increase against the preceding quarter. Asia-Pacific represented 20.8% of total sales in the quarter, compared to 14.9% during Q2 2015 and 18.4% in Q1 2016.

Operating Expenses by Type:

  • Research and development (“R&D”) expenses were $7.3 million in the quarter, flat versus Q2 2015, and a decrease of 1.3% against the preceding quarter. Expressed as a percentage of total sales, R&D costs were 19.6% of revenue in the quarter, which compares to 22.1% during Q2 2015 and 20.4% in Q1 2016
  • Sales and marketing (“S&M”) costs were $13.9 million for Q2 2016, a 17.4% year-over-year increase and an 11.2% sequential increase. S&M was 37.8% of total sales during the quarter.  In the year-earlier period S&M was 36.3% of sales, and for the preceding quarter S&M represented 34.5% of total sales
  • General and administrative (“G&A”) expenses were $4.5 million during the quarter, a decrease of 13.9% from the year-earlier period and flat against the preceding quarter. In terms of overall revenue, G&A was 12.1% of sales in Q2 2015.  This compares to 15.8% in Q2 2015 and 12.6% in Q1 2016

As of the end of the quarter on June 30, 2016 Brightcove’s cash, cash equivalents, and investments was $30.2 million.  It was $29.3 million at March 31, 2016.

The Company finished the quarter with 450 employees.  At this same time last year, Brightcove had 420 employees.

Financial Guidance:

Management is providing revenue guidance for the upcoming third quarter of 2016 in the range of $37.0 million to $37.5 million.

Also as part of the earnings release, Management raised 2016 revenue guidance.  For the full year, revenue is now anticipated in the range of $148.3 million to 149.3 million.  If achieved, this revenue ranges would represent annual year-over-year growth of 10% to 11%.

 

Related Content:

Press Release: Brightcove Q2 2016 Earnings Release

 

 

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Broadcast Vendor M&A: Dalet Acquires AmberFin

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results, SEC Filings | Posted by Joe Zaller
Apr 06 2014

MAM and newsroom specialist Dalet Digital Media Systems has signed a definitive agreement to acquire ingest transcoding, and broadcast workflow specialist AmberFin.

Financial terms were not disclosed.

The seller was UK-based private equity firm Advent Venture Partners, which spun AmberFin out of Snell & Wilcox in 2009, and subsequently re-invested in the company in a 2010 funding round.

According to public records, for the fiscal year ended March 31, 2013 AmberFin posted a net loss before tax of £1.18m on revenue of £4.58m.

Once the deal closes, the combined company will have revenues in excess of $55m.

Datlet says the acquisition of AmberFin significantly broadens the company’s product offerings, and “affirms the company’s dominance in MAM and media workflow management by creating end-to-end solutions that include comprehensive MAM capabilities along with state-of-the art image processing, media transcoding and distribution.”

“This acquisition allows us to offer the industry the most advanced level of workflow options.” said Dalet CEO David Lasry. “AmberFin has been at the forefront in mastering media, including transcoding and video quality control. The company has spearheaded many widely adopted industry standards such as MXF and AS-02. Its talent and expertise directly complement Dalet’s strengths in enterprise MAM-driven solutions. By melding our resources and innovative technologies, we can enrich both the Dalet and AmberFin products to offer the most complete and forward-thinking solutions for content providers to optimize their human resources and media assets. From ingest through multiplatform delivery, operators in News, Sports and Programming will reap tremendous efficiencies and productivity by applying our combined technologies.”

“I am extremely proud of the AmberFin team and its accomplishments. Our award-winning, cutting-edge products are used by prominent broadcasters, content owners and post-production houses around the globe,” comments Jeremy Deaner, CEO of AmberFin. “It’s very gratifying to know that by joining with Dalet, we can together leverage our best-in-class technologies to deliver an outstanding array of solutions that will meet the challenges of the constantly changing digital media landscape.”

 

Transcoding Consolidation Continues

Dalet’s acquisition is the latest in a series of deals and product announcements in the transcoding space.  As broadcasters and media companies scramble to deploy multi-screen services, transcoding is seen by many as a key technology.  As a result, transcoding has also attracted its fair share of financing and M&A activity.  Here’s a quick run-down of some of the recent transcoding deals and related-financial news:

 

 

  • In January 2013, Amazon unveiled its “Amazon Elastic Transcoder.” Based on the company’s Amazon Web Services (AWS) cloud computing platform, the Elastic Transcoder the service provides “a highly scalable, easy to use and a cost effective way for developers and businesses to transcode video files from their source format into versions that will playback on devices like smartphones, tablets and PCs.”

 

  • In August 2012 Brightcove bought Zencoder, a 2-year old start-up with $2m in revenue for $30m, and subsequently launched a cloud based transcoding service at IBC 2012

 

 

 

 

 

 

 

 

 

  • RGB Networks bought transcoding vendor Ripcode in 2010

 

 

 

Related Content:

 

Press Release: Dalet Acquires AmberFin – Purchase Strengthens Dalet’s Leadership in MAM

AmberFin Closes Funding Round — Fourth Transcoding-Related Transaction in Past Few Months

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Harmonic Moves Transcoding Technology to the Cloud, Launches AWS-Based Service

broadcast industry technology trends | Posted by Joe Zaller
Mar 05 2013

Harmonic announced a cloud-based transcoding service for professional applications that it says will enable “content creators, service providers, and media professionals to quickly and cost-effectively convert broadcast-quality video content to virtually any standard media format.”

Dubbed ProMedia Carbon MP, Harmonic’s transcoding services runs on Amazon Web Services (AWS), and allows users to buy processing in hourly blocks, or via a monthly subscription.  Users can also access it via XML APIs to deploy scalable, cloud-based transcoding workflows.

Features and functionality includes a wide variety of image processing operations including transcoding, SD/HD conversion, PAL/NTSC conversion, logo insertion, color space conversion, color correction, and multi-format closed-captioning.  The company also says ProMedia Carbon MP supports the industry`s broadest array of acquisition, nonlinear editing, broadcast, web, and mobile formats including MXF, XDCAM® HD, QuickTime®, CableLabs®, and MP4.

Harmonic is the latest company to jump into the cloud-based transcoding world.

Earlier this year, Amazon launched the “Amazon Elastic Transcoder,” and last year at IBC Brightcove launched a cloud-based transcoding service using technology acquired in its $30m acquisition of Zencoder.

Transcoding is clearly a hot space, and the cloud-based transcoding services space just got a bit more crowded with Harmonic’s announcement.

As broadcasters and media companies scramble to deploy multi-screen services, transcoding is seen by many as a key technology.  As a result, transcoding has also attracted its fair share of financing and M&A activity.  Here’s a quick run-down of some of the recent transcoding deals and related-financial news:

 

 

  • In January 2013, Amazon unveiled its “Amazon Elastic Transcoder.” Based on the company’s Amazon Web Services (AWS) cloud computing platform, the Elastic Transcoder the service provides “a highly scalable, easy to use and a cost effective way for developers and businesses to transcode video files from their source format into versions that will playback on devices like smartphones, tablets and PCs.”

 

  • In August 2012 Brightcove bought Zencoder, a 2-year old start-up with $2m in revenue for $30m, and subsequently launched a cloud based transcoding service at IBC 2012

 

 

 

 

 

 

 

 

 

  • RGB Networks bought transcoding vendor Ripcode in 2010

 

 

Related Content:

Press Release: Harmonic Launches Cloud-Based Professional Video Transcoding Service

Harmonic Blog: Cloud Transcoding with Harmonic’s ProMedia Carbon MP – includes additional resources

Harmonic ProMedia Carbon MP Site on AWS Marketplace

Elemental Technologies Says Revenue Doubled in 2012 to $21 Million as Transcoding Technology Continues to Grow

Amazon Launches Scalable Cloud-Based “Elastic Transcoder” Service – A Potential Disruptor in a “Hot” Technology Space

More Broadcast Vendor M&A: Brightcove Buys Zencoder for $30 Million in Latest Video Transcoding Deal

More Broadcast vendor M&A: Wohler Buys RadiantGrid, Latest in Series of Transcoding Deals

Envivio Files for $85 Million Goldman Sachs Led IPO

Envivio Closes $16.5 Million Fundraising Round

More Broadcast Vendor M&A: Private Equity Firm Acquires Telestream

More Broadcast Vendor M&A — Telestream Purchase of Anystream Now Official

More Broadcast Vendor M&A: Cisco to Buy Inlet Technologies for $95m

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Elemental Technologies Says Revenue Doubled in 2012 to $21 Million as Transcoding Technology Continues to Grow

broadcast industry trends, Broadcast technology vendor financials, Broadcast Vendor M&A, SEC Filings | Posted by Joe Zaller
Feb 06 2013

The revenue of video transcoding technology supplier Elemental Technologies more than doubled in 2012 versus 2011, according to information supplied to Forbes magazine by the company.

Elemental was featured in a Forbes list of the “100 Most Promising Privately-Held, High-Growth Companies in the United States,” coming in at #23 on the list. Elemental also appeared on the Forbes list last year, coming in at #54.  The 30-place jump in the Forbes rankings was the largest by any company.

Forbes says that Elemental posted full year 2012 revenue of $21 million, up 106% versus the previous year.  No other financial metrics such as profitability, gross margins, operating margins, etc., were provided.  However, in a May 2012 profile by technology website GigaOm, Elemental’s founder and CEO Sam Blackman, said that company was not yet profitable, and had revenue “in the “eight-digits” [in 2011] after having sales in the seven digits during 2009 and 2010.”

Elemental attributed its year-over-year revenue growth to continuing to satisfy the video processing needs of major media companies, double-digit growth in the OTT video market, and strong consumer adoption of tablets and other mobile video devices.

The company also said it more than doubled its customer base in 2012, and now serves 250 media and entertainment brands across nearly 40 countries.  Elemental is apparently taking on staff to meet increasing customer demand.  According to Forbes, the company currently has 102 employees, up from 70 employees in May 2012.

In May 2012, Elemental closed a $13m fundraising round led by Norwest Venture Partners, which brought the total amount of funding raised by Elemental to just under $30m.  In 2010, the company closed a $7.5 funding round, led by General Catalyst, Voyager Capital and Steamboat Ventures, who also participated in the May 2012 fundraising round.

As broadcasters and media companies scramble to deploy multi-screen services, video transcoding has become a hot space, and Elemental’s impressive year-over-year growth is certainly a testament to this phenomenon.

As a result of the growth in this technology area, transcoding has also attracted its fair share of financing and M&A activity.  Here’s a quick run-down of some of the recent transcoding deals:

 

  • In January 2013, Amazon unveiled its “Amazon Elastic Transcoder.” Based on the company’s Amazon Web Services (AWS) cloud computing platform, the Elastic Transcoder the service provides “a highly scalable, easy to use and a cost effective way for developers and businesses to transcode video files from their source format into versions that will playback on devices like smartphones, tablets and PCs.”

 

  • In August 2012 Brightcove bought Zencoder, a 2-year old start-up with $2m in revenue for $30m, and subsequently launched a cloud based transcoding service at IBC 2012

 

 

 

 

 

 

 

 

 

  • RGB Networks bought transcoding vendor Ripcode in 2010

 

 

Related Content:

Forbes: Americas Most Promising

Elemental Closes $13 Million Funding Round, Latest in Series of Transcoding Deals

GigaOm Article: Elemental gets $13M to sell arms in the online video fight

Press Release: Elemental Secures $13M to Ignite Business Expansion

Elemental Technologies: SEC Filing Disclosing 2010 Fundraising Round

Amazon Launches Scalable Cloud-Based “Elastic Transcoder” Service – A Potential Disruptor in a “Hot” Technology Space

More Broadcast Vendor M&A: Brightcove Buys Zencoder for $30 Million in Latest Video Transcoding Deal

More Broadcast vendor M&A: Wohler Buys RadiantGrid, Latest in Series of Transcoding Deals

Envivio Files for $85 Million Goldman Sachs Led IPO

Envivio Closes $16.5 Million Fundraising Round

More Broadcast Vendor M&A: Private Equity Firm Acquires Telestream

More Broadcast Vendor M&A — Telestream Purchase of Anystream Now Official

More Broadcast Vendor M&A: Cisco to Buy Inlet Technologies for $95m

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Amazon Launches Scalable Cloud-Based “Elastic Transcoder” Service – A Potential Disruptor in a “Hot” Technology Space

broadcast industry technology trends, broadcast industry trends | Posted by Joe Zaller
Jan 30 2013

The move to multi-platform content delivery has made video transcoding a hot area the digital video technology space.  Not only has there been a great deal of M&A activity in this area but transcoding companies have also attracted significant investment from venture capitalists and private equity firms.

Here’s a quick run-down of some of the recent transcoding deal:

  • In August 2012 Brightcove bought Zencoder, a 2-year old start-up with $2m in revenue for $30m, and subsequently launched a cloud based transcoding service at IBC 2012

 

 

 

 

 

 

 

 

  • RGB Networks bought transcoding vendor Ripcode in 2010

 

Today, in a move that could have ramifications for many vendors and end users in the digital media space, Internet giant Amazon announced that it is rolling out a beta version of its “Amazon Elastic Transcoder.”

Based on the company’s Amazon Web Services (AWS) cloud computing platform, the Elastic Transcoder the service provides “a highly scalable, easy to use and a cost effective way for developers and businesses to transcode video files from their source format into versions that will playback on devices like smartphones, tablets and PCs.”

Pricing starts at $0.015/minute for SD content, and $0.030/minute for HD content with no minimums or monthly commitments, and Amazon says that AWS customers will be able to transcode up to 20 minutes of SD video or 10 minutes of HD video each month free of charge as part of its AWS Free Usage Tier.

According to Amazon, the Elastic Transcoder service manages all aspects of the transcoding process transparently and automatically, provides complete scalability for big jobs, and lets users pay for only the services they need when they need them. The company also says content will be stored secure on its system.

To help potential users better understand the serviced, Amazon is hosting an Introduction to Amazon Elastic Transcoder webinar on February 27, 2013 at 10:00 AM PST.

It remains to be seen how this new service from Amazon will impact the established technology vendors in this space, and/or whether this service will be adopted by professional broadcast and post-production end-users.  Nevertheless, this appears to be a significant development that makes cloud-based IT technology to an increasing number of end-users.

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Related Content:

Amazon Elastic Transcoder (beta) Homepage

Amazon Elastic Transcoder Webinar

More Broadcast Vendor M&A: Brightcove Buys Zencoder for $30 Million in Latest Video Transcoding Deal

More Broadcast vendor M&A: Wohler Buys RadiantGrid, Latest in Series of Transcoding Deals

Envivio Files for $85 Million Goldman Sachs Led IPO

Envivio Closes $16.5 Million Fundraising Round

More Broadcast Vendor M&A: Private Equity Firm Acquires Telestream

More Broadcast Vendor M&A — Telestream Purchase of Anystream Now Official

More Broadcast Vendor M&A: Cisco to Buy Inlet Technologies for $95m

Elemental Technologies: SEC Filing Disclosing 2010 Fundraising Round

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Brightcove Revenue Increases 32 Percent in Q3 2012

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Nov 01 2012

Online video publishing provider Brightcove announced that its revenue for the third quarter of 2012 was $22.1m, up 32% versus the same period a year ago.

Subscription revenue for the quarter was $21.5m (97% of total revenue), up 35% versus the same period a year ago. Professional services and other revenue was $600,000, down 25% from last year.

The GAAP net loss for the quarter was $600,000, or $0.02 per share, compared to a GAAP net loss of $5.4m, or $1.09 per share last year.  The non-GAAP net loss for the third quarter was $1.5m, or $0.05 per share, compared to a non-GAAP net loss of $2.9m, or $0.59 per share last year.

The GAAP operating loss for the third quarter was $3.7m, compared to an operating loss of $3.3m last year. The non-GAAP operating loss for the third quarter was $1.3m, compared to a non-GAAP operating loss of $2.2m last year.

GAAP gross margins were 68% for the third quarter, flat with last year. Non GAAP gross margins were 69%, up from 52% last year.

The company ended the quarter with cash, cash equivalents and investments of $30.8m, down from $58.6m at the end of the previous quarter. The decrease in cash was driven primarily by the $27.2m acquisition of Zencoder.  Free cash flow for the third quarter was $1.4m compared to negative $5.5m last year.

 

Brightcove chairman & CEO said he was pleased with the Q3 results and issued a bullish statement on the company’s future potential, saying “We believe that we are in the very early stages of a fundamental shift in how digital content is being delivered and consumed. We view this as a significant market opportunity, and Brightcove is focused on leveraging our first mover advantage into continued, long-term market leadership.”

 

Guidance:

Brightcove said it expects to post a Q4 2012 non-GAAP operating loss of $1.9m to $2.2m on revenue of $22.8m to $23.3m. The non-GAAP loss per share for Q4 2012 is expected to be $0.07 to $0.08.

For the full year 2012, the company expects to post a non-GAAP operating loss of $7.5m to $7.8m on revenue of $86.5m to $87m.  The full year non-GAAP  loss per share is expected to be $0.35 to $0.36.

The company cautioned that the finalization of the Zencoder acquisition could impact its non-GAAP results for the fourth quarter and full year 2012.

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Related Content:

Press Release: Brightcove Announces Financial Results for Third Quarter 2012 | Business Wire

Brightcove SEC Filing Details Zencoder Financials

Brightcove SEC 8K Filing: Zencoder Financials

Brightcove 8K Filing with SEC: Zencoder Inc Financial Statements Year Ended December 31, 2011 and the Period From January 8, 2010 (Inception) through December 31, 2010

Brightcove 8K Filing with SEC: Zencoder Inc. Unaudited Condensed Financial Statements For the Six Month Periods Ended June 30, 2012 and 2011

More Broadcast Vendor M&A: Brightcove Buys Zencoder for $30 Million in Latest Video Transcoding Deal

Press Release: Brightcove Announces New Services to Transform the Video Encoding Workflow | Brightcove

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Brightcove SEC Filing Details Zencoder Financials

Broadcast technology vendor financials, Broadcast Vendor M&A, SEC Filings | Posted by Joe Zaller
Oct 24 2012

Online video publishing provider Brightcove, which recently closed the $30 acquisition of Zencoder, a 2-year old start-up that provides cloud-based encoding, transcoding and an HTML5 video player, disclosed in an SEC filings the financial performance of Zencoder.

For the full year 2011, Zencoder posted a net loss of $1.48m on revenue of $707,868

For the first six months of 2012, Zencoder posted a net loss of $995,157 on revenue $963,707

Brightcove is already putting the Zencoder technology to good use.  At the recent IBC trade show, it cause some excitement when it launched a cloud-based transcoding system based on the Zencoder platform.

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Related Content:

Brightcove SEC 8K Filing: Zencoder Financials

Brightcove 8K Filing with SEC: Zencoder Inc Financial Statements Year Ended December 31, 2011 and the Period From January 8, 2010 (Inception) through December 31, 2010

Brightcove 8K Filing with SEC: Zencoder Inc. Unaudited Condensed Financial Statements For the Six Month Periods Ended June 30, 2012 and 2011

More Broadcast Vendor M&A: Brightcove Buys Zencoder for $30 Million in Latest Video Transcoding Deal

Press Release: Brightcove Announces New Services to Transform the Video Encoding Workflow | Brightcove

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Broadcast Vendor M&A: Brightcove Closes $30 Million Acquisition of Zencoder

broadcast technology market research | Posted by Joe Zaller
Aug 15 2012

Online video publishing provider Brightcove said in an 8K filing with the SEC that it has closed the acquisition of Zencoder, a 2-year old start-up that provides cloud-based encoding, transcoding and an HTML5 video player.

According to the filing, Brightcove paid approximately $30.0 million in cash.

As part of the deal, $4.6m of the purchase price was placed into an escrow fund to settle certain claims for indemnification for breaches or inaccuracies in Zencoder’s representations and warranties, covenants, agreements, and losses attributable to certain taxes, and payments due to Brightcove for certain adjustments to the calculation of the working capital of Zencoder as of the close of business on the day immediately prior to the closing date.

 

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Related Content:

Brightcove 8K Filing: Completion of Zencoder Acquisition

Brightcove – Zencoder Agreement and Plan of Merger

More Broadcast Vendor M&A: Brightcove Buys Zencoder for $30 Million in Latest Video Transcoding Deal

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More Broadcast Vendor M&A: Brightcove Buys Zencoder for $30 Million in Latest Video Transcoding Deal

broadcast technology market research | Posted by Joe Zaller
Aug 02 2012

Online video publishing provider Brightcove announced that it is buying Zencoder, a 2-year old start-up that provides cloud-based encoding, transcoding and an HTML5 video player, for $30m. 

The deal values Zencoder at approximately 15X revenue, a rich valuation for the start-up. Brightcove justified the high price tag by saying that Zencoder’s technology will help it expand its offering, and that the transcoding will grow at a CAGR of 24% between now and 2017.

Zencoder was founded in 2010 when it raised $2m from Andreessen-Horowitz and Ignition Partners.  The company saus it has 1,000+ customers for its cloud-based encoding service, and more than 24,000 websites use its video player.

The Zencoder team will join Brightcove and become the Brightcove Bay Area Development Center.  Brightcove says it will continue to develop, operate, support, and promote the Zencoder products in their current form as distinct product offerings.

“We believe the Zencoder acquisition will advance Brightcove’s position as a leading cloud platform provider that not only provides rich, end-to-end solutions for digital content publishing and distribution, but also offers scalable standalone building blocks for developers to build custom systems,” said Jeremy Allaire, Brightcove chairman and CEO.

 

Video transcoding,  whether cloud- or appliance-based is a hot topic these days, because the technology is required to achieve interoperability between disparate file-based production systems, and to facilitate multi-platform content publishing and distribution. There has been considerable M&A and financing activity in this space including:

 

 

 

 

 

 

 

  • RGB Networks bought transcoding vendor Ripcode in 2010

 

Even after all of the above deals, there are still several stand-alone transcoder vendors in the market, most notably AmberFin (backed by Advent Venture Partners) and privately-held Digital Rapids.

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Related Content:

Press Release: Brightcove Signs Definitive Agreement to Acquire Zencoder

More Broadcast vendor M&A: Wohler Buys RadiantGrid, Latest in Series of Transcoding Deals

Envivio Files for $85 Million Goldman Sachs Led IPO

Envivio Closes $16.5 Million Fundraising Round

More Broadcast Vendor M&A: Private Equity Firm Acquires Telestream

More Broadcast Vendor M&A — Telestream Purchase of Anystream Now Official

More Broadcast Vendor M&A: Cisco to Buy Inlet Technologies for $95m

Elemental Technologies: SEC Filing Disclosing 2010 Fundraising Round

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