Ooyala CEO Jay Fulcher is a happy man. And why not? His company has just reported record revenue growth for the first quarter, with 
300 percent growth year-over-year. It's expanding into Europe, Latin America, South America, Australia and Japan (where it's just launched a Japanese-language platform). And, it's created a dust up with its chief rival-Brightcove, which accused Ooyala of spreading misinformation about the security of Brightcove's platform to its customers. Fulcher, with a grin, waves his hand and dismisses Brightcove's annoyance as, essentially, "a lot of drama."
Ooyala is riding high, he told FierceOnlineVideo at the NAB show in Las Vegas. By May 1, he says, Ooyala should top 500 customers, not bad for a start-up that just began selling a commercially viable product 16 months ago. Among the new clients: The United Football League, Yelp, Caracol Broadcast Channel, Hearst, LiveStrong Foundation, Telegraph Media Group, Esurance, Rowdy.com, Business Insider, GigaOm, StrikeForce, Deca TV and General Mills. Ooyala also has aggressively jumped into the TV Everywhere landscape, scoring a big win there with a major broadcaster.
Those are milestones, Fulcher says, on which the company isn't planning to dwell. With more than five dozen online video platforms fighting tooth and nail for each customer in the crowded marketplace, looking at where you've been isn't much of a plan, Fulcher says; it's all about where you're going. For much of the segment, Fulcher says, the next year will be pivotal. He's predicting at least half the companies will shut their doors as VC tightens, a function of a maturing industry and the rise of several leaders, Ooyala being one of them.
What's the market for OVPs looking like in the next nine months?
There are still some companies out there that are over funded, but don't have the long-term future they once did. Many of them, frankly, are coming to us as potential aggregators, and we may or may not be interested in some of those players.
We're not sure that we perceive ourselves as a buyer that's mostly interested in either technology or customers or revenue and we still think time's on our side because a lot of these businesses are ones that probably aren't long term all that viable and so we think the price point can be very advantageous to our shareholders.
How's Ooyala situated?
The last six months has been a really, really intense time of growth and expansion for us. We're excited about that; we're doing that not only through our own organic efforts in terms of employees and in terms of broader organizational dimension, but also in terms of our partners. We have 500 customers, and those customers are now serving video in more than 110 countries around the world; we've gotten some scale here relatively quickly. The way in which we built both the architecture of the product is allowing us to be very capital efficient, which is a bit of a differentiator from some of the guys we compete with.
And, we're excited about the Microsoft work we're doing with Silverlight, and they really seem to be leaning into our relationship. Some of that, I think, is a bit more evidence that, maybe, we're no longer perceived as "that upstart," that we once were.
I think we're well on our way now to being a company that's going to have the size and scale that's going to be necessary to be a leader in the space.
What kind of role will Ooyala play in TV Everywhere?
We see TV Everywhere as being more of the uber-concept of what TV Everywhere might be, not necessarily as what Comcast might see it as. To us, it's really about how do you go from on air to online and on demand. That transition is really the thing that we want to be able to fuel for our customers. That's a pretty transformational thing for those clients because the revenue model and the underlying business models are really different from what they are comfortable with.
Will consumers be willing to pay for content they can already get free online? Or are telcos and cable companies likely to become "semi-dumb pipes" that transport content with less control over it?
We totally agree with that and that premise has actually fueled the approach that we've taken. We've built an experimentation framework that allows us to help broadcasters experiment with what's the right revenue model going to be for a particular piece of content; whether it should be pay-per-view, or subscription, or video on demand, or have a completely authenticated pay wall. It's going to take, we think, an iterative, on-going process of experimentation to figure out what kind of content is best monetized what way.
If you want a richer experience then, there are other ways to kind of monetize it?
Right. This notion of kind of an iterative, experimental, process we think is the right sort of thing. And we've started charting that out to not only the broadcasters we have today, but to the ones that we're engaged with. One of the things that we're excited about is that we're taking to basically every major broadcaster in the world. It's not like those guys don't have a video player on their site, they do, but they don't have the deep analytics we do, they don't have the monetization tools we do, they--in many ways--don't have the syndication capabilities that we built into our platform, and that's really gotten them focused on Ooyala.
Speaking on analytics, how do, say, Akami's analytics play into Ooyala's? How do they compliment yours?
Akamai does a good job of providing somewhat generic web-based analytics to customers, but we go to the next level to actionable information that a customer can use to make a decision. It's nice to know how effective the pipe is working, that's interesting, but it isn't necessarily something a customer can do anything with. And, we don't think it's differentiable, because, quite frankly, anyone can-and many of us already do-use it in one form or another.
What we try to do is be complimentary with what any of the CDNs--not just Akamai--serve up by helping the customer understand how their video is being consumed, or some of the dynamics around the nuances of that consumption that they can do something about, like pricing.
In the instance of taking a bit of a more progressive example of a pay wall, for example, we did a pretty big project for a broadcaster where we were putting up an authenticated pay wall around a family of shows. That will help them figure out what to price that content for, how many times to show it for that price, over the course of how many days, what other kind of information might they want to gather around gender and then advertise specifically toward individual viewers. Those are they type of things we think are deeper and more interesting and more meaningful about our approach.
More personalizing of video?
Exactly. We think it's the highest order of the value proposition. For the content publishers, personalization is all around making sure that they are taking that content and doing the best job with the individual to make sure that the engagement of that content is maximized, because that typically means that they are going to make the most money as a result of that. But personalization to the consumer is all about "I want to see what I want to see, when I want to see it, and I want to see it on the device that I want to see it on, my iPhone, my iPad, my laptop, in the living room. So again, it's that entire ubiquitous experience that is what we're trying to provide.
How do you develop customer loyalty in a market that traditionally doesn't have a lot of it? Where big customers routinely jump from OVP to OVP?
That's certainly been true up until now... not only are there companies flipping in and out, different attempts to work with different companies, but in some cases, too, my God, how many OVPs can claim the same companies as a customer?
I know that when some of the visible Brightcove defections came out--especially like the Telegraph--I know Jeremy was out in the market talking about how they took EA from us. That's actually not true. Brightcove has gotten into the habit of giving their product away for free. EA has both products running side by side, in the same way that a company like EA may have Cisco and Juniper running side by side, or IBM and HP running side by side. I'm not happy about it necessarily, but I also know that sometimes free can be a powerful weapon, typically for a very short amount of time and it's not necessarily very sustainable.
In the last three or four months, we have dozens of examples where we won customers and won business versus free; customers see that you get what you pay for. In this space, customers are concerned about innovation and rapport and about who they're working with and how reliable the company is. We haven't had a lot of customer defections, despite attempts by other companies to take them.
I wouldn't say that we're not under attack--I think we are. And I've told the company it's really a good thing; it's a sign that we are now considered the leader in this segment. We're certainly the leader...Continued
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