My Interview with Brightcove Founder and President Jeremy Allaire

On Tuesday, April 5th I had a great opportunity to sit down and visit with Jeremy Allaire, Founder and President of Brightcove on his recent visit to San Francisco. What follows is a transcript of an interview that I did for Engadget. Engadget’s article can be found here.

Thomas Hawk (TH): Can you tell me a little bit about your background, what is your position at Brightcove today and what did you do before Brightcove?

Jeremy Allaire (JA): Sure, so, I’m the Founder and President of Brightcove, and prior to this I was the Chief Technology Officer of Macromedia. And so I spent a number of years focused on trying to establish Flash as a new platform for media, communications and applications on the Internet. We built a system of client run-times, server software and design and developments tools and other things to allow people to build new kinds of applications on the Internet. I got to Macromedia through Allaire Corporation, which is a company where I was a co-founder, back in 1995, which was a maker of popular web development software, ColdFusion, which was the first commercial web application server, and HomeSite, a very popular web development product. Allaire was a company with about a million and a half developers as customers and a successful public company that we merged with Macromedia.

TH: So, tell me a little bit about Brightcove. What is it? How will it work. I know you are a service. Are you a vehicle, an aggregator, a content provider, all of the above?

JA: So Brightcove is building an online service and a retail internet television platform that will allow any rights holder and publisher of video and television products to offer direct to consumer distribution of those products with multiple forms of monetization. We are also creating a consumer experience that allows the consumer to access and work with programming across publishers in some very interesting ways.

TH: Ok, Can you let me know when we might see this service available?

JA: It will be available this year. Right now we are working with a wide range of publishers of video products whom are interested in this method of distribution. Over the coming months you’ll be able to learn more about that.

TH: I’d assume that as with most media companies both subscription and advertising will be involved in the economics of the equation. Can you talk at all about whether or not your service will involve advertising or subscription revenue?

JA: So we definitely believe that there will be multiple models of monetization of video on the internet and our service is being designed to accommodate multiple models. And so we think that there are very compelling models of advertising around video that we think publishers that work with our service will benefit from and then we also expect to see a lot of experimentation and interest around pay models, both pay per view, purchased and subscription based video products and so we’ll be supporting all of those models for video and television.

TH: What are your general thoughts on the recent partnerships announced between Microsoft and the Bells in terms of developing a viable IPTV platform?

JA: Yeah, so I’ve talked about this a little bit as well publicly. I really look at the world through two different perspectives. I think there are really two different perspectives here. One is what I like to call TelcoTV, which is what a lot of people call IPTV. And I think it gets very confusing when you use these terms. TelcoTV is an effort to create a product that is basically a substitute good for cable or satellite products. It runs on a fiber infrastructure, but it is a broadcast and VOD product that is based on customer premise equipment that the operator gives to you and it’s more or less the same product that you get today with cable and satellite. There are some features that it has that cable doesn’t have and there are features that cable operators have that it doesn’t, and so on. So basically over the next few years you’ll be able to choose the same product but from multiple suppliers. And I think that that’s great, and I think there’s incremental value that’s being created for consumers as part of that. But I don’t think it’s a breakthrough in terms of innovation in terms of who will be programmers and publishers of video products. I don’t think it’s going to incredibly innovative around the models of control that the consumers exert over media and so forth.

I believe that there is a second model which we call Internet Television, which is really focused on bringing the models of discovery and sharing and use that the Internet has become very good at, such as in the world of text, and bringing that to the world of video and television. And I think that that will look and feel quite different than what TelcoTV looks like for the consumer.

TH: So you see TelcoTV as more of a replacement for cable or satellite but something that feels very similar.

JA: I think that’s exactly right.

TH: According to a recent study by PriceWaterhouseCoopers in 2009 there will be some 7 million subscribers who are expected to get television programming from a phone company, Over the same period, cable subscribers are expected to fall to 64 million, from 70 million, while satellite companies can expect 32 million subscribers, an increase from 23 million now. In other words, of the 103 million total subscribers cable will have 62% of the market, satellite will have 31% of the market and the phone companies will have almost 7% of the market. Do you agree with these numbers? And more significantly, what will television really look like 4 years from now?

JA: I’m not going to make a guess on the market share and other data. I think that there will be huge amounts of innovation over the next 5 years where a lot of the consumer relationships are not with traditional carriers and platform operators but are rather with content companies themselves and people who enable you to very easily work with content from those content companies – but entirely over the internet and not through a carrier or operator in the traditional sense. I think a greater share will move to that direct consumer model on the internet.

I think that the other issue is that the volume of content will be enormous. So, just based on archive and library assets from existing publishers and thousands of emergent publishers, whom will create interesting and compelling informational, instructional, entertainment and other forms of content, and where the volume they create will be exponential. It will not be a channel line-up of bundled products for $50, but instead a world that’s fragmented across tens of thousands of micro-content publishers – as well as larger publishers that consumers are having relationships with on the internet.

TH: How will you guys protect the content owner’s rights to their material? Will you use DRM?

JA: So, our approach is to build a security engine that protects content no matter how it’s accessed and what type of device it’s accessed on. We take advantage of digital rights management where the publisher desires to have their content encrypted and to have licenses issued to use it in diffe
rent ways. We’re not building a lot of that technology ourselves. We’re taking advantage of industry standard platforms that are emerging – some from Microsoft and there are open standards in the space that are evolving which we expect to take advantage of as well.

TH: So, as a content producer if I want to allow someone to burn to DVD I can. If I want to allow them to share the content I can.

JA: Yeah, absolutely. So we think publishers will vary in terms of what they want to offer consumers in terms of control. You have to balance between a consistent user experience so the consumer expects that they can do certain things the same across content they acquire, but also respect the unique needs of the publisher. So some publishers may think it’s great that there’s super distribution and burning and other things and others might really not want that to happen. So finding a balance is difficult and is something that we are certainly cognizant of.

TH: What are your thoughts on TiVo? What do you think about TiVo putting pop up ads when you fast forward through the commercials?

JA: (Laughs). Well, you know, I think it’s interesting. I’ve looked at that for a while. What I can say is that the advertising models for video and television need to evolve. I’m not of the view that advertising should go away because it would break most consumer’s banks if that was the case. And so I think there is enormous room for innovation around the methods for advertisers reaching customers that are using video products. I think there is enormous amount of innovation in terms of how you should interact with that advertising.

And I actually frankly think that it’s great that TiVo is experimenting with those types of things. And it’s clear that the advertising community is excited about that. Whether they got it right with the zoom over ads and other things I’m not going to comment but I think that it’s great that the experimentation is happening. I think it has to happen.

When you look at platforms like Sky TV in the UK, who’ve really had huge innovation in interactive advertising on top of their platform, well that’s been very successful overall. I think a lot of those things can be brought here. You’ll see that on DirecTV later this year as Murdoch’s influence plays out there. And I think that it’s great to see that in the download media space as well.

Again, I can’t comment on the specifics of TiVo but I think it’s ironic obviously that a company that has it’s brand basically associated with ad zapping is now one that’s innovating with advertising, but it’s symbolic of the crisis that is facing the television advertising industry.

TH: Ian Dixon, a brand new podcaster, does a Media Center podcast and had Charlie Owen from Microsoft on last week and Charlie talked a lot about advertising and he really said that a lot of Media Center technology will be a great thing for advertisers in that it’s going to allow very targeted ways to advertise to people.

JA: I absolutely agree with that. So if you look at advertising best practices on the internet, they are light years ahead of advertising on television. So when you marry internet and television, what we call internet television so to speak, you’ll see those same innovations and best practices applied in that space. I think it will be very exciting and welcome from that community.

TH: What do you think about a Media Center PC or the idea of having all of your media, music, photos, video, tv in your living room on a central device. Are you familiar with Microsoft’s Media Center Edition PC and what do you think of it?

JA: So, I really like what Microsoft has continued to do with the Media Center platform. I’ve tracked it for years. I think Media Center 2005 is a huge amount of progress over where they’ve been. They’re very close to having a truly great convergence device. And so I laud them on that. They’ve also innovated beyond any other player in the industry in terms of creating an open platform that anyone can target applications, services and content to. It’s consistent with how they’ve had open APIs and other things in the past in Windows. I think in this space it is very very important that innovation can happen in an open way.

I also believe that, in general, the broadband consumer is very focused on control of their media. They like to control their media. I think that a model where there’s a PC environment where you manage and control your media in a productive fashion and have some massive storage that’s part of that makes sense to me.

I think that the reliability and the ease of use of the tv connected devices in the living room can still be improved, clearly. But the Extender model and distributing of experiences around home networks to TVs as essentially terminals and monitors is a reasonably good approach.

I think it’s close. Clearly, the bulletproof factor in terms of ease of use and reliability is not quite there yet, but you can clearly see that it will be in the next couple of years.

TH: Will Brightcove’s service work with Media Center?

JA: Yes, so the Brightcove service will be available as part of Media Center PC products and Extender products. So if you have an Xbox or a next generation Xbox or a Linksys device or an HP device and any number of new manufacturers that are bringing products to market, we’ll work with those out of the box.

TH: Talk to me about micro content. What about Chris Anderson’s Long Tail? How big a market is this and this seems like an obvious market for Brightcove. What are your thoughts on the Long Tail conceptually, and in how it relates to television and where are the micro-content opportunities?

JA: That’s a great question. It’s a deeply held belief of the company that that’s where the transformation of television will happen on the internet. What will be unique about television when it collides with the internet is that the Long Tail economic forces will play themselves out. At a recent conference I showed a slide which was interesting. When we put together this business a year ago one of the slides we had was a chart that was an XY axis and a sort of long tail that went across it. And the title of the slide was, “the distribution of content interests on the internet”, which is not quite as catchy of a phrase as “The Long Tail”, but it was the same idea. And it’s a deeply held belief that the majority of content and interest that exists on the internet are not the concentrated mainstream things but they are distributed across a massive base of other things.

And we are now hitting a point where the production costs on creating video products and the ability to achieve reasonable production values is getting easier and easier. So we expect to see exponential growth in the number of people originating video based products that have commercial value. And so we see that as exponential and we see our mission as supporting that in a very, very deep way, and making it possible for micro-content and micro-markets of content to be profitable. Whether it’s someone who is doing fly-fishing training videos or someone who is really passionate about a sport or someone whose got local or regional content that has an audience for that, we think it’s now economical to support that.

In addition, we think that Long Tail economics in television apply to larger publishers and programmers who,
when you look at the volume of content they produce which is sitting stagnant, have tremendous opportunities. And so, Chris Anderson has talked about this, there’s 31 million hours of original video programming produced each year and the amount of that that’s easily accessible to the consumer is virtually nothing. It’s tiny. And so there’s clearly a massive amount even in the mainstream of what’s distributed today that can be unlocked and there’s an enormous amount of value to be unlocked there. And so by applying the methods of discovery and search and personalization that make Long Tail economics work on the internet into that television space, we’ll see a lot of that value unlocked and we’re very focused on helping those publishers do that.

TH: What about portability. How portable will the media that I get from Brightcove be?

JA: Our model is to certainly give the rights-holders the ability to define that to some degree. I think right now there are issues with DVD burning in that DVDs themselves are insecure. That may matter to some, and not matter to others. Right now, portable video players are nascent and not widely adopted but those will become more popular and so the portability will become increasingly important but it’s not the mainstream application today probably.

TH: What about HDTV? HDTV files are bound to be larger than regular digital files? Is there room for HDTV in the IPTV realm with or without fiber optic homes? And HDTV cameras are also getting cheaper. Where do you think this is going?

JA: The internet is an interesting phenomenon in that it’s fundamentally a fairly –when the internet started, the web in particular was a fairly crippled platform. So in 1994, in 1995 even through 1998, people were on dial up modems, HTML was a very limited user interface platform, but the convenience and control and choice that it offered to consumers was radical. And people embraced it because of that control, convenience and choice that they had. And so that was a trade off that was clearly acceptable. And there were other platforms that were emerging — even AOL’s platform and new online service platforms like MSN which were in the early days quite advanced in terms of what they could do – those fell by the wayside because they weren’t open and they weren’t open in terms of distribution and they didn’t offer the same level of choice to the consumer.

We saw the same thing in music where encoded and compressed content has become totally sufficient to the consumer. There are certainly audiophiles that will swear by their LPs and then there are other people that will swear by their digital CDs. Clearly download music, which is inferior overall to CD quality music, is quite popular.

In video, I think it’s a little more challenging in that it’s visual and it’s perceptible to the eye versus the ear which is not quite as perceptible. However, generally, the perceptibility of media and it’s resolution is actually not as discernable to most human eyes as people might think.

So HD content is awesome and I think clearly an internet model of HD delivery will emerge. I don’t think the economics for doing it at a mass market basis are there today. However, I think that again, the choice, convenience and control, that consumers will have – similar to how they had that with the early web – will be so incredible and exciting to consumers that they will love that access to that media.

And I think that the quality of the media on an LCD flat panel or any other device will be quite good and fairly indiscernible to most human eyes.

TH: Have you seen what JD Lasica and your old pal Marc Canter are doing over at Ourmedia.org? What do you think of that and what are your thoughts on the Internet Archive as well?

JA: Yeah, absolutely. I know them well. I know Marc very well. I think it’s awesome. I think the Internet Archive is just an incredible, ambitious and important public project and so I’ve admired that for a very long time. I think Ourmedia.org as an extension to that is also quite exciting. I think non-commercial content and experimental content that people want to begin to offer and deliver, and having a free platform to do that is tremendous. And our hope is that those types of offers generate really interesting assets that do have commercial potential and could flow to a service like ours.

TH: What do you think of Akimbo?

JA: Akimbo’s a good company and an important innovator in this space. I think they’ve done a very good job at creating an experience that works, and putting together a service that offers a diversity of content that’s very interesting. I think they are a very good company in this market.

TH: Have you ever seen the Naked News?

JA: (laughs) When I saw Akimbo launched at Demo last year, they demoed Naked News, not all the way, but enough to tease people. I thought it was pretty hilarious.

TH: What about Al Gore’s new thing INdTV?

JA: Or current. Current.tv.

TH: Right, Current.tv.

JA: I think it’s great. I think it’s symbolic of the kinds of new networks that will emerge when internet television becomes viable. And so I think that’s a great one. I think we are going to see a thousand others that are interesting which involve self publishing and involve verticals and niches that are really interesting. And the economics of doing it work. And so I think we will see a lot of entrepreneurs that find interesting venues to do that. You know we’ve seen in digital cable and in digital satellite there are hundreds of broadcast startups that have emerged over the last five years based on the increase in capacity of those distribution channels, and you know in the internet model there’s unlimited capacity. When you have micro-content in micro-markets, you are going to see entrepreneurs that go up and down that scale.

I think, in particular, models that involve consumers in generating media that then flows into commercialized media services is pretty interesting.

TH: So, these kind of entrepreneurs, these make potentially ideal partners for someone like Brightcove?

JA: Oh sure, absolutely.

TH: So, you mentioned Media Center. How else will you get your content from Brightcove to the living room television set?

JA: Right now, the standards around moving media from the internet to TVs are in flux a little bit. Microsoft has some de facto standards but they’re not de facto in terms of high volumes of users yet. Clearly they will be. So we’re taking advantage of Microsoft’s platform. There are a wide range of other device manufacturers in the DVD market, the connected DVD players, game consoles, video recorders, television set manufacturers, and so on, who are very keen on being able to offer open access to content and services from the internet and are working on standards-based architectures to do that. And we are very tapped into that set of activity and expect our service to be able to flow to quite a few devices over the coming years. And I can’t talk specifically to which and how, but enough of the standards are coming together to make that viable without a lot of proprietary work.