Client News
Blackwave
The Boston Globe: December 3, 2007
Blackwave aims at Web video storage
By Carolyn Y. Johnson, Globe Staff
Broadband video has exploded into a new entertainment channel, creating opportunities for the companies that do the work of storing and streaming hours of content, from professionally produced action flicks to confessional clips shot on Web cameras.
As online video makes the transition from novelty to a legitimate new medium, companies putting video online must develop new revenue models to make money off hosting, storing, and streaming large libraries of content.
Today, Acton start-up Blackwave - formerly called Acinion - announces $16 million in funding and a technology that helps bring down the hardware cost and space required to store video clips or full-length movies.
"Most of the stuff out there today to store Web video is really systems that were always designed and always intended" for businesses that needed to store and sort through masses of data, not movies, said Jonathan Seelig, a cofounder of content delivery company Akamai Technologies and a managing director at Globespan Capital Partners, which has invested in Blackwave. "People weren't thinking about traditional storage systems as being used for delivering very large monolithic files of video."
As the cost of bandwidth has plummeted, the hardware cost of storing and streaming content has become a bigger portion of the cost, and Blackwave says it can reduce that cost by a factor of 10, pushing the next generation of content online. The company has also developed software and algorithms to shift resources according to demand, so that if thousands of clients are trying to download a particular funny video, the storage system will reallocate resources to meet the demand and eliminate the annoying experience of watching the word "buffering" interrupt content.
"We all know Internet video is starting to take off. If we look at the actual numbers - CBS, NBC, iTunes, Fox, Disney - even user-generated content. Only 1 percent is online today," said Robert Rizika, chief executive of Blackwave, which raised $5 million last year.
Rizika said that beta customers include a social network, a media company, and a user-generated website.
Blackwave plans to expand more widely by the middle of 2008, and says potential clients could be the major content delivery companies such as Akamai, or major media companies who would like to build online video libraries in-house.
Eve Griliches, program manager of telecommunications equipment at IDC, said that the algorithms that the company has built to help manage content may also position the company to take advantage of a lucrative frontier in online video.
"They're positioning themselves and are certainly poised for targeted advertising, around shorter clips," when people are far less inclined to leave the room and skip the commercials the way they might when watching a movie with several minutes of commercials, Griliches said. "You could make a lot of money, thinking about how to . . . leverage their algorithms to help determine what kind of ad could go" on popular videos.
Will Richmond, president of market intelligence firm Broadband Directions LLC in Newton said that the cost of both bandwidth and storage have decreased over the past decade, and that technology that decreases storage cost would be most popular for companies that have lots of content that changes quickly over time.
As online video continues to augment and displace traditional media, the market for such behind-the-scenes technology will only grow.
"The clear macro trend is towards a huge proliferation of content," Richmond said. "That's only going to accelerate as we go forward - more content, more content choices, more content providers."
By Carolyn Y. Johnson boston.com
