September 14, 2xxx
Brightcove Executive Team:
I appreciate the opportunity to meet with you and discuss the many opportunities available to Brightcove. Through the interviews with key members of your organization and analysis of industry trends my team and has put together recommendations that will align with your business strategy.
With the re-launch of the website, Brightcove has established itself as a leader in the future of Internet TV. Doing so has attracted significant investors who have financially backed the firm in its development of a multisided media distribution business. With fast paced industry and increasing competition the executive team is faced with the task of ...view middle of the document...
This intersection of online users would provide a common platform video distribution and a marketplace for video programming and advertising. The easy-to-use video platform would enable video producers to quickly publish and customize video content. The end result would be increased opportunities for businesses to utilize online video content to enhance their own business.
Several factors in industry and society created a ripe opportunity for internet television to gain increase momentum. First, the wide spread availability of broadband to the home has greatly increased in the past few years with 68% of US online users having broadband access. This trend should continue to move upward. Media formats and associated players are common applications on PC’s and half of internet users have reported viewing online videos regularly. Advertisers have moved many budget dollars to online advertising as the audience and time spent on the internet continues to grow. Also decreased cost of video camera, editing software, and other video technologies have allowed individuals and smaller firms to start producing videos without having huge production and marketing budgets.
Brightcove’s early business model combined its software platform with content delivery (CDN) fees. The bandwidth resold from major CDN providers accounted for roughly half its revenue. However, CDN prices had begun to fall and it was imperative to transition to a more profitable business model as soon as possible. By making the strategic transition from platform business to media distribution business, Brightcove felt they could become highly profitable with advertising accounting for approximately half of its revenue, network services about a quarter, and the rest in platform fees.
For the Brightcove media network, there were four groups (four sides) targeted. Publishers were those producing media content with the intent to rent or sell. The target base of publishers was 70% long-tail (independent and small/mid-size businesses), and 30% premium customers. Offerings to advertisers involved the placement of ads at the beginning or within their published content. The advertising strategy was to sell advertising to be run within certain genres of video. Brightcove was able to reach a diverse and segmented audience that advertisers could not reach through traditional methods. Affiliates were able to purchase the right to use online tools to power video on their own site, attracting consumers, otherwise online users, were a key focus of their strategy. For those looking for quality video content, Brightcove negotiated with popular search engines to ensure their content was discoverable. Brightcove knew that it must capture the consumer’s interests in order to create significant interest from publishers and advertisers.
Competition in the internet TV market was growing. Pressure was being applied from firms like Revver, Roo, and Joost who had also combined...