Brightcove: A Safe Harbor?

Since google bought youtube for $1.65 million last month, CEOs of other Internet video-related companies have been very popular. Jeremy Allaire is no exception. His two-year-old firm, Brightcove, has so far focused on helping publishers (including NEWSWEEK) get videos on the Net. Now Brightcove is creating a portal where visitors can surf thousands of channels of video uploaded by Brightcove's clients or even random creators, like YouTube's vid-stars. It will also sell videos directly through the AOL Marketplace. Allaire, 35, came to NEWSWEEK to show his wares, shrug off speculation on whether he's selling his closely held company, and explain why cable is an endangered species.

ALLAIRE: A lot of the media companies we work with are truly paranoid about Google. They're also paranoid about consumers pirating and sharing their media. Now these fears are united--there's Google usurping their advertising dollars, and there are consumers stealing and indirectly profiting from that. But I'm not worried. I don't think that what YouTube is presenting offers the kind of control [our customers want], and it doesn't offer a program with the ability to create a deeply branded experience.

There's this very deep voyeuristic instinct in humans. Internet TV has made that totally wide open and people are getting comfortable with seeing other people in these open, raw contexts. Also, consider that 80 percent of YouTube's traffic is international, so now there's raw culture in exhibition mode on a global scale.

We're really early in this process, and right now two worlds are colliding. You've got traditional TV advertisers, whose first instinct is to apply the old models to video on the Internet. Then there's performance-based Internet-style marketing--text-based, bid-based advertising that's cost-per-click. I think that there's probably something that's sort of in between.

You see it in broadcast TV--there's [unrelated] content layered over of the program, often at the bottom of the screen. If you're watching a 10-minute video, would you rather have two of those overlays or two 30-second commercials? Probably the overlays. From a marketer perspective, it has to be intrusive enough that someone sees their brand, but from a consumer perspective it shouldn't interrupt the program. If you click it, it pauses whatever you're watching and then takes over with a richer ad you can interact with ... Another format is the post-roll [that's shown at the conclusion of a video].

Early data suggests there's a high-enough volume of people who both look and click that the model is generating value.

When you have quality content--not necessarily mainstream subject, but content that has value to someone, like high-quality cooking shows--people want it in as high-fidelity an experience as possible. The snacking behavior of browser-based video is a good start, and consumers will continue to use the Web as the primary form of discovery. But I want to know that when I flick on my TV set, all my personal lineups are there where I can watch them in TV quality and in a linear fashion, even if they're five minutes or 12 minutes.

I don't think it fits anywhere in this. It's just [the cable model] using a different infrastructure, because it has some architectural advantages. We're making a bet that the closed model that's organized top-down by a company will just get swarmed over by the open model. [That will happen] as soon as you have 50 million consumers that have a DVD player, a game console, a TV set, a media bridge like an ITV device that Apple's talking about--and you can access media in the [Internet] cloud that's been organized for you.