Ooyala CEO Jay Fulcher: Online video industry leaders emerging

Jay Fulcher, OoyalaOoyala CEO Jay Fulcher this month celebrated his one-year anniversary at the helm of the online video platform. It's been a busy year for the Silicon Valley veteran, who came to the company with a track record of driving revenue and market share growth in technology companies for more than 20 years, most recently as President & CEO of Agile Software. Fulcher told FierceOnlineVideo that Ooyala in the past year has seen consecutive record quarters with 40 percent to 50 percent quarter-over-quarter growth, and has made more deals and recorded more revenue than ever.

The company, founded in 2007, now has more than 500 customers globally, and Fulcher said Ooyala is expecting to continue growing its customer base as more businesses begin to recognize the importance of using video. In the next 12 months, he said, Ooyala will continue to focus on developing its mobile business, "content everywhere," as well as continued employee and facility expansion.

But, he said, the entire industry could stutter if the economic climate worsens, and he reiterated the prediction he made in April that this year would see continued consolidation in the online video platform industry as venture capital companies tightened the screws.

FierceOnlineVideo: So, it's been a year. What's new?

Jay Fulcher: Well, we've had a lot of news. Our second quarter, which closed in June, was a record quarter for the company and, obviously, we're excited about that. We basically sold more deals and did more revenue than we ever have done before. That just continues a trend pretty much quarter over quarter that has been occurring for us. The pipeline continues to be really strong and growing for us. I think that a lot of that is because there's a lot less question whether or not companies of all sorts whether they're a media company or a marketer, pretty much everybody understands now that video needs to be a part of their formula. On the media side, obviously, it's really about monetizing their content and doing a good job of being able to syndicate their content all the places that they want it and then having the monetization controls to really make money doing that. And, of course, we're excited because our analytics are at the bottom of that formula. On the marketer side, these guys are trying to sell more products and services and build their brand online through the use of video and they're finding video to be a pretty effective, pretty persuasive way of being able to do that.

I'm knocking on wood as I say this, because there's a lot of macro stuff going on in terms of the economy and whatever else that could certainly stall some of our progress, but if it did, it wouldn't be just stalling our progress, it would be kind of a macro trend that would be a wider situation that would be happening not just in North America, but everywhere else that we are.

Quarter-over-quarter we're growing the business as somewhere between 40 and 50 percent, so when you annualize that we're on a nice little trajectory here where I think we're going to continue to grow the business pretty aggressively.

FierceOnlineVideo: After a year at Ooyala, are you just a little older or just a little wiser?

Fulcher: I certainly hope I'm a little wiser. Online video is something that I've come to relatively fresh from the enterprise software space. So, I've learned a heck of a lot in this past year, not only from people in the industry and customers in terms of what it is they're trying to do with our kind of technology, but also from my own team. This has been a really fun year because I get to work with a really smart, bright, energetic group of people that I think understand this technology and this category really well. So, I like to think I'm wiser and I try not to focus on the fact that I'm older.

FierceOnlineVideo: What's the biggest change or evolution in the company over the past 12 months?

Fulcher: I think the biggest change has been both the size and scale of customers that we're working with. The company had done a really good job in its first year or so in terms of getting off to a fast start and really using a lot of our self-serve products to learn a lot, both how to deploy this kind of product, and how to make sure that we were going to have the right internal processes to make sure the products could scale and be supported properly and that sort of thing. But in the subsequent year, because we've been selling our product now for about seven quarters, this last three or four quarters has really been about testing our mettle with some of the largest, most demanding customers there are. I think that's been the biggest area of growth for us. First of all, we've discovered that our technology not just stands up, but it does a great job at scale, and certainly that's been something that's been gratifying to us and something that we're certainly going to be leveraging going forward. And then I think the other thing is that we've continued to use these big customer situations to validate our product roadmap. And to validate the fact that the things we see as being priorities for this category of software is exactly the way that the customers see it. That's been the big thing we've learned from this last year.

FierceOnlineVideo: The industry, in the past 12 months, seems to have matured rapidly. It seems to have gone from jagged peaks to rolling hills. Has it?

Fulcher: No question. I think that the wide acknowledgement that companies see video as an opportunity for them to drive more revenue, and to do a better job with their customers, and to get more insight about their customers and their own products, their own technologies that they're positioning online, certainly that's all been the case. I think the other thing, and this harkens back to when you and I talked in Las Vegas, is my predictions about pretty radical consolidation certainly have been true. I would only predict that I think there's more to come, given our interactions with a variety of companies over the course of the last six months.

This is a market that's quickly consolidating down to a few leaders.

FierceOnlineVideo: Will economic pressure promote a more rapid downturn?

Fulcher: There's precious little venture capital available for anybody who doesn't already have clear line of sight to being an absolute leader in this marketplace. And, the reality is there are only a couple of us where that's fairly clear. For the most part, venture capitalists don't get too excited about somebody who can be in the number three, four, five, six position in an industry. They sort of like number one or number two, and they particularly like it when it's not clear which company is going to be number one. I think that pretty accurately describes our category. So, I think that what we've seen this last six months will certainly continue through the end of the year.

FierceOnlineVideo: Brightcove has seen strong customer growth, is continuing to expand and has had some solid customer announcements of late. How does Ooyala stack up?

Fulcher: Certainly, I'm glad to see that their business is still doing well, and, quite frankly I think that's a good thing for the category and a really good thing for Ooyala. Where we stack up, is that we've grown faster than anybody else in the category, including them, the last couple of years. And, we continue to be growing at that pace. I think, for the most part, while they have historically been the bigger company, and certainly they've had a lot more employees, and a lot more field coverage, and they've certainly spent a lot more money than we have. The nice thing is that, now, in most major evaluations, I would guess that both companies for the most part are almost always involved. And, for us, that's a great thing because we love to have the opportunity to compete. For the most part, both companies are making each other better, and that's good for customers.

FierceOnlineVideo: Last time we talked, TV Everywhere was a pretty major focus and you were just about to announce a trial with Disney. Anything happening there?

Fulcher: Yeah, it is. We had some pretty interesting information and some good analysis that came out of that, none of which I can't share specifically, yet. But we've had a lot of good interaction with ABC/Disney and those discussions continue, in fact we were in there as recently as last week doing some work. So, we're going to continue looking at a variety of different things we're going to be able to do with them.

FierceOnlineVideo: That begs the question: TV Everywhere... is it anywhere yet for Ooyala?

Fulcher: I think for us, the main thing that we're focused on is really content everywhere. What's a lot more interesting than TV Everywhere is really how do you get content everywhere that you want it to be? That's probably more of an uber concept that kind of supersedes the whole TV Everywhere thing. I do think that, as recently as (Tuesday) morning, there was a lot of stuff about the Hulu IPO and I do think that for the most part, there is a lot more broadcast content that's getting online all the time. Quite frankly, we're going to be a big facilitator of a lot of that, which is really a good thing. But I think, in general, we're pretty focused on providing that content whether it be of the broadcast sort or any other sort, long or short form, and making that available across all devices. And I know that's something you heard a lot about from us the last time we were together in person, and we've followed though on that. We recently took the iPhone application that allows publishers to shoot and upload content from their iPhone-Ooyala Direct--and we've done a number of different mobile enhancements over the course of the last couple of quarters in terms of high-quality delivery to the iPhone and iPad, monetizing mobile content in terms of in-stream ads, mobile syndication capabilities. All of that stuff has been around, basically providing a variety of different kinds of content to a variety of different sorts of devices and viewing experiences, whether you're on your computer, whether you're in your living room, with your mobile device or whether you're watching television. And we continue to work with Roku and Boxee, a lot of the over-the-top experience guys. For us, at least, content everywhere is the focus, and TV Everywhere is certainly a part of that and some of the progress around TV Everywhere continues for sure, and certainly a lot of the infrastructure guys continue to promote that, whether it's Comcast or others, but it's part and parcel of a much larger momentum play which is really what we're focused on.

FierceOnlineVideo: What else have you been working on with content everywhere?

Fulcher: One of the things that I think we're most focused on today is helping some of our broadcast customers figure out how they want to put their content online and what are some of the boundaries they want to establish around that content. How are customers going to pay? Or, if they're going to pay for some of that content? The way in which they're going to consume it, whether that's going to be via computer or mobile or anything else. That's the primary thing we're working on today... really to help broadcasters navigate these new waters of getting some of their content to an online experience. I think downstream, there are all kinds of other opportunities where we'll continue to work with a variety of different technology providers with respect to the other things that are interesting in respect to getting that content online, whether it be monetization tools, whether it be closer integration and working more strategically with ad server and ad networking companies, or whether it's really starting to take the concept of how people consume this kind of content on their mobile device to the next level.

There' s just so much more opportunity, frankly, with how this content can be presented with some of the technologies that are necessary and now enabled that will allow that content to be a lot higher quality, and a lot more engaging for viewers. That makes the value of that content even greater because of the engagement being a lot better than it has been in the past.

I think it really starts with the work that we're doing with a lot of our broadcasting customers. As we start to help them for the very first time develop their strategies around online video.

FierceOnlineVideo: Jay, right after NAB, you launched some big global expansion, to Europe, Asia, Latin America. How's it gone?

Fulcher: We're excited that today we have more than 500 customers in more than 100 countries, across more than 5,000 websites. By definition, our business, although it's still a relatively small business, and a relatively young one, is absolutely global, and it requires a global footprint from our perspective to be able to market, sell, support, and, over time, deliver the kinds of value that we want to in those various market places.

We've continued to build out our capabilities and footprint in Latin America, and are doing the same thing in different parts of Asia, as well as in Europe. We continue to hire employees, to open new facilities and new offices, and to continue to try to keep pace with the expansion that we have in terms of the new customers that were signing in all of those locations.

FierceOnlineVideo: What's one accomplishment from the past 12 months that you're particularly proud of?

Fulcher: Maybe the one thing that kind of stands out, as a company that we've accomplished, the number one thing, would be that we as a team have developed a good, long-term plan. We might not be precisely right in all of the decisions that we've made and all of the assumptions that we've made about the growth of our business, but we're not confused. For companies that want to accomplish big things, it starts with a great plan. We have a great plan and a great team that's executing to it and, from  a personal perspective, that's probably the thing that I feel best about. Basically, your success starts with that.

FierceOnlineVideo: Having a roadmap during periods of rapid growth is critical...

Fulcher: Exactly. This is one of those situations where this market is changing very quickly. There are a lot of parties involved, a lot of people have a very vested interest and an agenda around online video and you have to have a well-put together plan of attack around what you want to accomplish over the course of a couple of years, and then be able to modify, adapt and respond to the things that happen as they happen. We're in good position from that standpoint.

FierceOnlineVideo: Obviously, do you have any failures, or gotta-do betters on your plate from the last year?

Fulcher: I think from the areas of improvement, our companies has done well, so I wouldn't support that we have any abject failures out there. I think one of the things we need to improve upon moving forward is making sure that we're able to compete in all the places that are now potentially really ripe for us to be involved. We still, on too many occasions, get involved in deals or opportunities that are, well, we're a little bit later than we should be; where the positioning and the opportunity to build some rapport with some of these guys that are looking at evaluating not just our software but what's on the market... I'd sure like to be engaged with them sooner than we are. It's too often the case that we don't have the coverage I would like us to have.

It's probably the lament of any CEO that ‘s running a company that's growing pretty quickly and where you're sort of just anxious to be out ahead of where you are. It's a pretty natural thing that we're just trying it catch up to that phenomenon. When we get involved early, and we have the opportunity to fully compete, we do really, really well. That's one of the reason we're trying to do some of that expansion we talked about.

FierceOnlineVideo: What's the toughest business deal you've made this year.

Fulcher: That's an interesting question. There's been a couple of situations where we've been asked to prove ourselves prior to having a deal in place. There are a lot of customers that are more and more comfortable with sort of proof-of-concepts, and that style of evaluation. The reality is that while customers, I think, take some solace or comfort in knowing that allows them to have a little less risk and a little more information before they make a final decision. It prolongs their investment as well as the rest of ours. There have been some situations where we've been willing put our money where our mouth is and prove ourselves, with some degree of risk. Those are the toughest. These are deals we've ended up winning, but we've put ourselves out there. They were tough calls to make in the moment, but they've been confidence builders for our team. It shows us we have a solution and approach that can hang in any situation that is suitable for any company on the planet. We've been forced to prove ourselves under some pretty tough circumstances.

FierceOnlineVideo: The flip side: What's the deal you didn't quite get hold of?

Fulcher: We've had some where we were a little late to the party. As a result, we weren't able to get back into the fray the way that we should have. I've learned, in many of those cases, that it's important for us to kind of hang around the hoop. We've seen that sometimes, we might win a customer later that we didn't get the first time around. One of the things that we're learning is that some opportunities with customers that make a decision maybe too much based on financials, on cost, on what they perceive to be a more expensive solution versus a less expensive solutions, very quickly starts to turn back toward quality, dependability, reliability, scale and, of course, when you look at all of the different factors, that's what we've built our value proposition on. All the factors.

FierceOnlineVideo: What's Ooyala's focus for the next 12 months?

Fulcher: One of the things we're really focused on now is all of the monetization possibilities that we're bringing to companies and how to use analytics to better help inform decisions, whether it be pay-per view, or video on demand or any of the different ways to use advertising to monetize your content.

Mobile is another big area. We have a long list of things in our roadmap about how we can provide mobile content in a much more consumable way.

In terms of business process, we're sort of in mid-stream in terms of our expansion plans and so we're still expanding our field operations, we're launching a professional services operation because we're finding more customers are wanting us to take a more consultative role with them in terms of things they're wanting to do, and we're in a strategic position because we do have an opportunity to develop opinions around best practices and examples of things that have gone well, or not well. We think the collective learnings that we've got is a pretty valuable set of services for some of our new, and existing, customers.

We've been growing our engineering group, our sales and marketing group, and are determined to continue to win the intellectual capital battle in the way that we think we have to this point, so that the best and brightest in the industry really have an interest to work at our company.

FierceOnlineVideo: What's the final grade you've earned for the past year?

Fulcher: There's a tougher curve here. This isn't my first time around, so I sort of know that earning an A is a tough thing to do. Quite frankly, there are things I would do differently in terms of moving more quickly. Some of the transformational things we've done as an organization I'd like to think that I could have gone even faster that I already have; for some I've moved pretty quickly.

I would say, a pretty solid B. I think we're doing a little better than average. But the way I would self assess our progress is pretty aggressive and my expectations for the business are pretty high. A solid B is about right.