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Brightcove’s IPO: What you need to know

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Online video platform provider Brightcove amended its SEC filing today to go public; the company is expected to raise just shy of $60 million, selling 5 million shares for $10 to $12 a piece. Brightcove originally filed its S-1 with the Security and Exchanges Commission in August of last year, but updated some of the details in this amended filing. Here are the key new numbers and other interesting tidbits about the Brightcove IPO:

  • Brightcove had 3,872 customers in over 50 countries by the end of 2011.
  • The company’s 2011 revenue was $63.6 million, compared to $43.7 million in 2010. Its net loss in 2011 $17.8 million, compared to $17.3 million in 2010. It expects to continue to have losses in 2012.
  • Brightcove employed 312 people in 9 different countries by the end of 2011.
  • Brightcove generated 66 percent of its revenue in the U.S. in 2011.
  • Brightcove’s customers served on average 743 million streams per month in 2011. More than half of those streams were delivered outside of the U.S..
  • Most of the media is delivered through Akamai (s AKAM) and Limelight, (s LLNW) but the contract with Limelight is currently up for renewal.
  • The New York Times is not only one of Brightcove’s biggest customers, but also a minority shareholder that owns less than 5 percent of the company’s stock.
  • Brightcove doesn’t mention any of its direct competitors by name, but mentions YouTube (s GOOG) three times in the filing.
  • Brightcove will trade at NASDAQ under the stock symbol BCOV.
  • The offering is led by Morgan Stanley and Stifel Nicolaus Weisel, and underwritten by RBC Capital Markets, Pacific Crest Securities and Raymond James.

What does the filing mean for the online video space in general? Our own Ryan Lawler summed it up best last August:

“Brightcove deserves kudos for making it this far while other online video companies have either been acquired at fire sale prices or bit the dust. But the modest revenues revealed by its IPO filing show just how hard it is to make money in online video, even while viewers are tuning in droves.”

5 Responses to “Brightcove’s IPO: What you need to know”

  1. Shaun Flagg

    I think it’s obvious that they launched their App Cloud business to create a new source of revenue as I am sure they well know that online video platform technology is now a commodity. I think that the OVP space will never generate more than marginal profits even in the best case scenarios. The space is fairly saturated with OVPs like Ooyala, Kaltura, VMIX, and others. It is a fairly expensive venture keeping up with emerging technology – video codecs, live streaming formats, player containers for full device compatibility and increasingly sophisticated demands of video publishers. So while you spend on all your efforts on improving the platform you still are only promised a limited return. My advice would be to explore other business models and streams of revenue related to video but that promise higher profits – maybe less revenue with lower costs. There are several disruptive technologies and business models at work now – video recommendation and personalization, IPTV, content revenue share models (instead of content licensing), and video sharing networks. Brightcove will have to work on these technologies and/or businesses in addition to their App business if they want to see a brighter and more prosperous future.

  2. this is just an awful business, and the trajectory looks even worse: Their revenue went up by 50% and the loss got worse? Talk about margin compression…and the size of the loss compared to the size of the entire business makes clear that they will have losses not only in “2012” as they say themselves, but far, far beyond. Their technology is a commodity…so is bandwidth re-sale…there is nowhere for these guys to go.

  3. Mike Knaisch

    How much of Brightcove’s revenue comes from resale of CDN services? I suspect most of it does. Also, I wonder how the transatlantic traffic charges affect their bottom line? Put those two things together and one wonders about long term viability.