January 16, 2013 – Brightcove has taken a major step toward improving advertising performance and user experience for TV networks and other content providers in the online space with an agreement to acquire Unicorn Media, a company that has figured out how to make OTT more TV-like.
With monetization becoming far more central to TV programmers’ and other video providers’ online strategies than was once the case Brightcove has been searching for a mode of supporting ad placements that would get beyond the traditional limitations imposed by player-based ad solutions, says Jeff Whatcott, CMO at Brightcove. “Worldwide as an industry we’ve done over $10 billion in online video advertising over the past year, but the model is starting to show cracks, wrinkles and age, particularly in relation to devices,” Whatcott says.
“Until now monetization in online video has followed the PC-centric approach where everything has been done in the player, including actual ad insertion, interactivity and tracking,” he explains. “Today, with device platform fragmentation and proliferation, the player has a long list of things it has to do to make things work. So there’s a huge challenge around monetization that requires a new approach.”
Adding to the challenges is the fact that viewing TV programs online, especially live, is a completely different experience from viewing them on traditional TV sets. Consequently, Brightcove was also looking for a way to “stitch” programs together into a more seamless experience where everything flows in ways more akin to the TV viewing experience.
Unicorn, which started out as a software firm devoted to creating better ad and feature experiences for video running on Adobe’s Flash, shifted gears about the time Apple jumped off the Flash bandwagon to begin delivering video in what became the adaptive bitrate (ABR) streaming format known as HLS (HTTP Live Streaming). Unicorn’s new strategy, embodied in a product called “Once,” was to bring new capabilities to the streaming domain, including progressive downloads as well as ABR and Flash, across all formats and devices, says Andrea Graziani, who is shifting from her role as vice president of marketing at Unicorn to a new title with Brightcove.
“We’re now providing online advertising support to five of the ten top media companies,” Graziani says. Outlets served by Unicorn include the likes of ESPN, NBC News, the Weather Channel, ABC News, Univsion, TMZ and unnamed providers within the Viacom group. In addition, Brightcove and Unicorn have a number of other media customers in common where they’ve been providing complementary services, Graziani notes.
Unicorn, with 14 patents on its technology and 20 applications pending, takes a different approach to dynamically placing ads in on-demand and live video compared to companies that rely on new types of player-based strategies or use what is known as manifest manipulation in the ABR packaging process (for an account of new developments in manifest manipulation see Monetizing Multiscreen Poses Hard Tech Choices at the Edge). As described by Graziani, what will now be known as Brightcove Once ingests a video, whether it’s offered live or in on-demand mode, as a mezzanine file into its processing domain, where the content is identified for access by all users with a single URL. In real time, as each user connects, Unicorn performs the dynamic ad placement, transcoding and formatting for streaming or download appropriate to that user’s device and mode of access.
“The magic happens when the ad is inserted,” she says. The platform interfaces with the provider’s workflow, including ad management processes, so that when a trigger appears in the stream denoting the need for placement of an ad, possibly replacing an existing ad that appears with the live broadcast TV program, the platform pings the ad server. “It’s dynamically inserted into the stream for a seamless playback experience,” she says.
Because all this is done in real time for each user, providers can leverage whatever information they have about a given user, whether it has to do with geographic location, demographic data or viewing context, to target ads on a per-session basis. Along with bringing the potential for higher CPMs through addressable advertising, dynamic placement is an essential part of live program distribution owing to the rights restrictions tied to broadcast ad deals.
For example, Graziani notes, “we did the online ABC News coverage of the Presidential Inaugural where we stripped out the broadcast ads and replaced them in the designated pods with ads from Freewheel, DoubleClick and other sources.” Adds Whatcott: “The ad signaling piece is really important. You need to know what the slot durations are in any pod, which can be anywhere from 15 to 30 seconds or longer. There’s a lot of complexity involved.”
Critical to the monetization process, the platform delivers a complete set of analytics in real time, tracking ad starts, number of plays, the proportions of viewing on different types of devices, etc., Graziani says. Brightcove, too, captures a lot of information, tracking what viewers watch and cross storing that data with metadata to register things like how many videos of a particular genre a person has viewed, Whatcott notes. The two companies’ analytics capabilities will eventually be merged to maximize the benefits, he adds.
The approach to dynamic advertising developed by Once eliminates many issues associated with other methods, Whatcott notes. For example, he says, it avoids ad blockers by making the ad an integral part of the incoming video stream. Because Once does not rely on HTML5, it avoids impediments to ad reach imposed by lack of HTML5 support in some OS and browser environments. Nor does it require use of specialized SDKs, plug-ins and apps, he adds.
Taking the burden off the end device to render the ads is vital to monetization on very low-cost, low-intelligence devices like Google’s Chromecast, he notes. “Chromecast is an extremely thin-client device,” he says. “You can’t install apps on it. You can’t do the kinds of things that have been done with heavy-weight players. We make it possible to monetize content running on devices like that.”
Unicorn offers another benefit, which proved decisive in Brightcove’s rejection of the manifest manipulation approach. “We looked at manifest manipulation deeply,” he says. “When we first heard of Unicorn’s approach, our guys said they chose the hard way. But when we really looked at it, our conclusion was they solved all the problems in a more comprehensive, very convenient way for our customers.”
Specifically, because the ad insertion occurs before stream fragmentation, the Once solution applies to progressive downloads where manifest manipulation is not an option. “We think it’s important not to be totally dependent on a specific approach to dynamic stream generation,” he says. “Two years from now something totally different could come along.”
The Unicorn technology also provides Brightcove a way to create a more TV-like viewing experience on live programming, allowing content to flow continuously. And it opens a path to creating a more seamless experience in connecting users from one on-demand content file to the next, Whatcott notes.
Presently, Brightcove is supporting some measure of improvement in this vein through use of its recommendations engine. For example, with Weather.com, when a user is accessing a particular video sequence, the platform generates a playlist offering related viewing options along with an ad placement opportunity as the viewer goes from one sequence to the next. “It’s working well for them, where they’re seeing more streams per player load than would normally be the case,” he says.
Whereas the number of players loads is usually a multiple of actual views, it’s the opposite with Weather.com, which means viewers are staying with the service more than they would if the playlist process wasn’t in effect. While the approach still looks “a little clunky” in comparison to the TV experience, the fact that it’s generating about ten times the views of a discontinuous experience demonstrates what can be done by bringing the online viewing experience closer to what happens on the TV, Whatcott says.
“We need to make the experience really easy and continuous,” he says. “The default experience needs to be continuous versus discontinuous viewing.”
Brightcove’s acquisition of a provider of a cloud-based solution for simplifying video advertising is part of a larger strategy that has seen the online video publisher leveraging its own datacenters, including two in Boston and one in Chicago, along with the public datacenter services provided by Amazon AWS and Google Compute Engine to provide a global support system for handling all aspects of video publishing in the cloud. Adding to the mix are Unicorn’s datacenters in Arizona, Virginia and The Netherlands.
“We want to provide a cloud service that will define the future of TV,” Whatcott says. “We’re doing that on the Internet’s terms.”
By that he means the company is leveraging what it considers to be the best architectural approaches to delivering TV services online that comport with how the Internet operates. This allows customers to exploit the efficiencies and flexibility of cloud-based resources in conjunction with whatever CDN resources they want to use to deliver a robust, high-quality TV-like experience, in contrast to the one-off end-to-end infrastructures developed by managed service providers to accommodate OTT distribution of their services.
While in North America there remains a sharp dividing line between the approaches to broadband TV taken by pay TV service providers and individual content owners, the trend in other parts of the world is toward an Internet play that leverages the kind of cloud-based capabilities Brightcove has built, Whatcott says. “When you look at what’s happening in Asia, for example,” he says, “everybody is coming to market with live linear broadcast initiatives and looking at digital first with new programming lineups that don’t have the spectrum constraints of legacy TV distribution systems. In the digital world they can define a demographic group, license programming and develop dedicated content for them with apps that directly address their interests.”
The acquisition of Unicorn Media, valued at $49 million, comes in tandem with Brightcove’s creation of a new Media Group to drive its cloud-based services in the entertainment sector, which will be led by Anil Jain, currently senior vice president of business and corporate development at Unicorn. As explained in a recent blog by Brightcove CEO David Mendels, the Once product line will initially continue as a standalone component of the Brightcove portfolio, complementing the company’s cloud-based video publishing and Zencoder transcoding platforms as it intensifies its pursuit of business with major media companies.
Over time, he adds, “we plan to integrate Once technologies with future versions of Brightcove Video Cloud and Brightcove Zencoder….Video Cloud will eventually integrate with Once for video on-demand streaming, and Video Cloud Live and Zencoder Live Cloud Transcoding will integrate with OnceLIVE for fully-monetized live event streaming.”