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Summary:

Last week brand-new video startup Encoding.com was named a finalist in Amazon’s Start-Up Challenge, one of seven in the running for $100,000 in cash and Amazon Web Services credits and a possible investment from Amazon. Resource-intensive video startups have a pretty good record in the competition […]

Last week brand-new video startup Encoding.com was named a finalist in Amazon’s Start-Up Challenge, one of seven in the running for $100,000 in cash and Amazon Web Services credits and a possible investment from Amazon. Resource-intensive video startups have a pretty good record in the competition — if you can say such a thing for a one-year-old event. Last year video platform Ooyala took home the grand prize, and Justin.tv was a finalist.

Denver-based Encoding.com uses on-demand cloud computing to enable pay-as-you-go video encoding (translation: transforming an uploaded file from whatever format it comes in into a clip fit to play on the Internet, mobile or elsewhere). Whereas other costs like content delivery are being commoditized, encoding is still a hassle. What most people do is set up servers to run software like FFmpeg or On2‘s Flix, or buy dedicated appliances from companies like RipCode.

But by supplementing its own internal server farm with Amazon elastic computing, Encoding.com can adjust to usage spikes, and altogether take 30 to 40 percent off the cost of running your own server farm, according to founder Greggory Heil.

On-demand may be a differentiator now — and Encoding.com was quick to come to market after being founded in June of this year — but competition is imminent. On2 announced last week it would partner with Zencoder to offer an on-demand encoding direct competitor.

Another challenge is that the biggies like YouTube already have their encoding infrastructure set up in-house, and are unlikely to outsource to a startup. But with also-ran players looking to cut costs, Encoding.com could pick up a few large sites. For now, its most notable customers are college reviews site Unigo, film production video site MovieSet (our coverage), and extreme sports video platform Mobilerider.

Heil said Encoding.com has six employees and is self-financed.

Next up in the startup challenge: Each of the companies is visiting Amazon in Seattle to present in person. The final decision will be made by a panel of judges.

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  1. Interesting but their competitive advantage can easily be mimicked by entrenched players. What is the barrier to entry?
    And what customer segment are they targeting? The premium content providers will not use them, low end will be satisfied with Youtube, etc. So they are left with mid tier market (semi pro).
    I see them being part of a larger video platform play – tie up with services provided by Brightcoves of the world. Thoughts?

  2. Good thoughts Akash — I agree. The mid-tier providers are proliferating though. I think the key is to tie up with white-label video platforms. That type of customer wants a one-stop shop.

  3. The problem is still that these solutions require transcoding on a server after the user uploads something. What needs to happen is that the transcode happens locally on the end-user’s computer before its uploaded. This will scale perfectly since its harnessing the power of the submitting PC, the quality is better since the user doesnt have to make a compressed file first only to be uploaded to be further compressed, and there is no internal server side costs. Check out: http://www.framecaster.com/howitworks.html

    This solution is the best for completely removing server side costs. And whats best, the video goes straight from the end-user to the destination with no stop gaps.

  4. RipCode Transcodes Video into Cash: $12.5M « NewTeeVee Tuesday, January 6, 2009

    [...] The company recently scored a deal to power MySpace’s mobile video. It faces new competition from the likes of Encoding.com, which offers on-demand pay-as-you-go encoding. [...]

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  6. Elemental Shakes Up Video Servers With Parallel Processing Tuesday, May 19, 2009

    [...] from cloud computing alternatives — we’ve written about ones such as HD Cloud and Encoding.com — because content providers require a sturdier solution. However he made it clear Elemental [...]

  7. Cloud-based Video Gets a Guarantee Thursday, August 6, 2009

    [...] Video Gets a Guarantee This week Encoding.com, the provider of pay-as-you-go video encoding powered by Amazon Web Services, started offering service level agreements that guarantee it will process its customers’ [...]

  8. New Y Combinator Video Startups: Zencoder, Embedster, NowMov, Embedly Wednesday, March 24, 2010

    [...] as Amazon Web Services for video, with cloud-based on-demand transcoding. Like competitors such as Encoding.com, Zencoder actually uses AWS to power its service. Customers include Posterous and On2, which before [...]

  9. Is Amazon Planning a Cloud Encoding Service?: Video « Monday, October 4, 2010

    [...] customers, who use EC2 to power their own encoding offerings. That includes HD Cloud, Zencoder and Encoding.com — the last of which was a finalist in Amazon’s 2008 Start-Up [...]

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