Brightcove CEO Marc DeBevoise says streaming is still a growth business.
DeBevoise helped launch CBS All Access long before nearly all media companies jumped into streaming, only to find out that streaming would lead to barrels of red ink.
Since taking the helm at Brightcove, one of the early streaming technology companies, in March 2022, DeBevoise has been pursuing a two-track strategy and launching a wave of new products to get revenues growing, turn losses into profits and raise the company’s stock price.
One track is providing technology to media companies. The other track is all of the other companies that need to stream material to their employees, customers and consumers.
Overall, more people are spending more time streaming video and video is taking up a bigger share of internet usage. That makes streaming a growth industry, DeBevoise told Broadcasting+Cable.
“Streaming doesn’t just impact the big six media companies we love to talk about,” DeBevoise said. “Those companies have had a struggle the last year or two.”
But there are also thousands of other companies that need to use streaming video, he notes. Brightcove already works with Home Depot, General Motors, Ford and Nike, for example.
“They need to handle that video and manage it and put it on the site and put it on social. They use our system to do it,” DeBevoise said.
Recommitting to Media
Since becoming Brightcove's CEO, DeBevoise has recommitted the company to the media business. He said his predecessor was more focused on growing enterprise customers.
“My view is we can do both. We can walk and chew gum,” he said.
DeBevoise had told Wall Street that the company had closed the biggest deal in company history, but the new client in the media business wasn’t ready to be named.
That changed this week, when the company announced it would be providing streaming technology to Yahoo.
“As Yahoo continues to grow and deliver more content, it was imperative for us to find a solution that could handle our global reach and deliver the highest level of performance for our users,” said Matt Sanchez, president and general manager, Home Ecosystem, at Yahoo. “Brightcove’s streaming platform provides superior scale and performance, and their team is continuously innovating its products to help deliver the best user experience as well as meet our business objectives.”
UPDATE: On Wednesday the National Hockey League said it picked Brightcove to deliver digital video on the league's website, on the websites of its 32 teams and on the NHL app.
“We’re delighted to partner with Brightcove to support the delivery of video content across League digital platforms,” said Nili Doft, NHL Senior Vice President, Digital Media. “We look forward to working with Brightcove, who will help us continue to deliver great experiences for our passionate fans through their innovative streaming solutions.”
Every one of these companies can't have a thousand engineers. It's just not viable. There are maybe enough engineers in the world, but not that want to do that or that are affordable to make that a good business.”
— Marc DeBevoise, Brightcove
Other media outlets Brightcove works with include AMC Networks, the Academy of Motion Picture Arts and Sciences, BBC, CBC/Radio-Canada, Cox Media Group, Forbes, The Metropolitan Opera and Sky.
There will be more as the financial pressure builds on media companies trying to make money with their direct-to-consumer streaming businesses, DeBevoise said. Those companies will want to cut costs by outsourcing the streaming technology.
“If you’re a big company doing it yourself, we fundamentally believe with our scale and our capability, we can save money,” he said. “Every one of these companies can't have a thousand engineers. It's just not viable. There are maybe enough engineers in the world, but not that want to do that or that are affordable to make that a good business.”
DeBevoise also sees opportunity in serving enterprise clients.
“I think media will be bigger in the near term but I believe enterprise in the long run and probably has a larger overall TAM [total available market],“ he said. ”When I think about companies that need to have a streaming future, it's kind of every company, right?”
Brightcove already has about 250 of the Fortune 1,000 in its customer base.
“I don’t see any reason why we couldn’t have much more of that here. If we could grow a few hundred more of those, we’d be in a great place. And I think the market is there for us to go do that.”
Brightcove is 20 years old. It’s been publicly held for about 10 years. It was a growth company, but lately revenue has been stuck, DeBevoise said.
“We have not unstuck it yet,“ he said. “But we have, we have a vision on how to do that.”
In 2022, Brightcove reported a $9 million net loss as revenues were flat at $211 million.
In the first quarter of 2023, Brightcove posted a $11.7 million net loss as revenue decreased 8% to $49.1 million.
The company will report second-quarter earnings Wednesday.
Brightcove’s stock price was as high as $24 a share in 2021. It opened 2023 at $5.22 a share and traded at $4.36 on Tuesday.
Steve Frankel, senior analyst at Rosenblatt Securities rates Brightcove a buy.
“We see limited downside and the potential for a meaningful re-rating of the shares when the company provides it can consistently grow revenue and expand margins,” Frankel said in a research report in June.
Frankel noted that Brightcove was being aggressive in introducing new products and services and seems to be having early success with them, but he maintains a wait-and-see attitude.
“While still a couple of quarters away from a return to double-digit revenue growth … we continue to like the risk/reward and remain buyers of Brightcove,“ Frankel said. “In the meantime, investors should get some incremental good news from strong new business growth, especially in the media space.”
New Products on Tap
So far this year, Brightcove has rolled out a wave of new products.
It started out by launching Communications Studio, a product designed to help companies’ communications and human resources groups use video to engage with customers, suppliers and employees.
Brightcove followed that up by announcing integrations with Shopify, Instagram and Salesforce that will help its companies add e-commerce capabilities to their interactive streaming video.
Working with Frequency, Brightcove added a capability to help clients launch free, ad-supported streaming television channels.
Brightcove is also working to monetize video for its clients by working with ad platforms. The company announced a partnership with Magnite in January, and followed that up with a deal with Pubmatic last month.
It also introduced an Ad Insights capability in June that uses machine learning to determine viewer tolerance for ads, enabling clients to optimize their ad loads without disrupting audience experience and retention.
“We have a bunch of supply sitting on our platform that we can see globally. We're trying to find the right partners in which to make that supply available to help our customers,“ DeBevoise said. “Maybe we’ll take a small slice of revenue. It's not going to be the biggest revenue business for us. But we should really be an enabler in that industry.”
