Eric Elia (@ericelia) is a member of the founding team at Brightcove, and is currently the vice president of TV solutions. Brightcove, a video and app solutions provider, went public on Feb. 17 on the NASDAQ and now trades with a market cap of $509.3 million.

When we started Brightcove seven years ago, we expected a five-to-10-year transformation period until we reached a world of purely Internet-based, on-demand TV, motion pictures and “long tail” content. Sometimes it’s hard to see change happen when we are in the middle of it, but amazing to look back and see just how far we’ve come. I look at the past seven years as driven by three waves of innovation.

The first wave of TV transformation was the “Hey kids, let’s put on a show,” period of experimentation and naiveté. Return on investment wasn’t that important yet. In fact it wasn’t really possible. Audiences were too small and monetization infrastructure was not robust enough. It was in these early days when an innovator like Kenny Miller (of MTV Networks, at the time), could take a risk and learn from it, and another cable programming exec would ask in a meeting, “Do you think people really want to watch video over the Internet?”

Flash video changed everything. No special plug-ins. Designers could stop building those horrible pop-up video ghettos and begin to integrate video seamlessly into the rest of their user experiences. We did our share of MTV Overdrive-style players at Brightcove, but knew that contextual video like this would change everything.

The second wave was about mainstreaming the video pilot project into the primary digital business. Video teams were born. Monetization and measurement became important, as they should for any legitimate business. In particular, the advertising business matured quickly. We were delighted to see the ecosystem grow and innovation come by working with our friends at companies like FreeWheel, Tremor Video, TubeMogul and YuMe. The same execs (literally) who asked if people really wanted to watch video over the Internet were now talking about mid-roll, companions and VAST.

We’re now in the middle of the third wave of TV Transformation. I think we owe a debt of gratitude to Netflix, LoveFilm, Vudu, Apple and Amazon for making it okay to put a price tag next to a video (or a smorgasbord of videos as the case may be). And thanks to Apple again for the iPad, which changed everything.

Beginning last year we saw a surge of interest in two things – premium, pay-based content and multi-screen experiences. Smart TVs and the great Roku platform showed up on everyone’s radars. I think there’s a Netflix-of-[pick a nation] site either live or launching in dozens of countries. The opportunity and consumer expectations have never been greater, the technical challenges and fragmentation never more formidable.

Underneath the hood this means:

• Smart video players that must detect the device the viewer is on and serve an appropriate experience (monetized and measured, of course).
• Digital rights management (DRM) software, for better or worse. Many hope that movies and TV follow music to a world of no DRM, as creating less friction for consumers is generally good for business. For now, though, it’s up to companies like Brightcove, and our partners and competitors, to make content security as seamless as possible from an end user perspective, as well as for for video publishers. There’s a lot of pain involved with end-to-end DRM – from encoding and ingestion to license serving.
• Extensibility. Xbox 720? Roku 3? The 2013 Smart TV platforms? We pray these are backward compatible. It’s impossible to future-proof every solution, but important to stay nimble. That means picking the right platforms and the right technology partners. DIY is a myth. If you are a media company building all your own technology, you are kidding yourself. Somewhere in your technology stack you start using third-party stuff. Where do you draw that line? The decision isn’t build vs. buy, but how to keep pace.

If we are in year seven of a 10-year transformation, what do the next three years hold? I think we can all start to glimpse the future now, but it’s going to be fun to see which winners emerge. Here are some of the tensions I think we’ll see resolved over the next few years.

Dumb TV vs. Smart TV

Let’s face it; the iPad is more a small TV than a big phone. If you’ve been to a trade event in the past year you’ve seen the numbers. People love watching TV on their iPads. At Brightcove, we’ve seen a steady increase in video consumption on the iPad in the last year.

There has been a lot of criticism of Smart TV user experiences; and while things are improving, the experience of searching, browsing and interacting with media user interfaces is just better on smartphones and the iPad. One possible way this plays out is for these devices to be used for what they are good at, and throw your video up to your TV via AirPlay, Wi-Fi Direct and similar technologies.

TV Everywhere buffet vs. a la carte consumption

For people who watch a lot of TV, the cable and satellite industry’s TV Everywhere initiative is a great value. Sign in with your existing pay TV credentials to watch what you already pay for, on what devices you want. There have been a lot of business hang-ups stalling the rollout of TV Everywhere, but things seem to be accelerating finally. On the other hand, I’m pretty excited to have just bought a current Mad Men season pass off of iTunes. HD. No commercials. Portability.

OTT buffet vs. a la carte consumption

This is the year we’ll start to see a lot of competition for Netflix in the U.S. The patterns we’ve observed in music will start to emerge in video, with the video equivalents of Rdio and MOG coming to life. Viewers will be able to buy single episodes, full seasons and custom programming packages from a variety of retailers.

Fragmentation vs. standards

It appears that technologies such as HTML5, H.264 and HTTP Live Streaming (HLS) are becoming relatively standardized, even on some stalwart smart TV platforms. But there’s always change on the horizon. MPEG-Dash? H.265? Do Android tablets become popular this year? Next year?

The pace of change seems to be increasing. The next few years will see dramatic shifts in how viewers find and watch movies and TV shows, and how video publishers pay for and distribute their programming.

Brightcove may not have had the sexiest IPO in the recent wave of offerings, but the company’s return so far definitely beats Zynga and Groupon’s performances since their debuts. After launching its video platform six years ago, Brightcove went public just a few weeks ago on the NASDAQ by raising $55 million. The company’s shares have climbed 80 percent since the offering to $19.86, giving the company a market capitalization of $523.8 million.

We caught up with chief executive Jeremy Allaire, who is now positioning Brightcove as more than a video services provider. While the company has been known for powering video players for premium brands like The New York Times, Conde Nast and Macy’s, Brightcove is trying to find a broader base of customers with a new suite of app development services.

Called App Cloud, it’s a set of tools that helps brands and media companies build apps, track engagement and layer in advertising. It means that Brightcove is now competing with a ton of app service providers like Urban Airship, which handles in-app notifications, analytics providers Flurry and Apsalar, or tools provider Appcelerator.

It is a cutthroat market, but what Brightcove does have are existing relationships with premium brands and lots of experience in the software-as-a-service model. Allaire said that thousands of companies are in the developer trial for App Cloud, including organizations like the U.S. State Department and cable channel Lifetime.

“We saw that this problem of content apps on devices was going to be a major problem so we built a second leg of our business on that,” he said. ”Now we’re seeing customers like broadcasters, government agencies and financial services companies.” There’s a free version for a single user. Then there’s a paid enterprise version that starts at around $15,000.

Brightcove will need those extra clients to move outside of its core base of media companies, all of whom are grappling with the new economic realities of the web. The company hasn’t turned an annual profit since its inception in 2004, as it spent on marketing and research and development to grow customers. The company lost $17.3 million on $63.6 million in revenue last year.

“In the last couple of years, we’ve been investing for growth and we’re a recurring revenue business,” Allaire said, pointing out that revenue grew 46 percent year-over-year in 2011. (The company’s net loss also narrowed slightly in the same time period.)

Virtually all of Brightcove’s revenue comes from the video product. Allaire said the decline of Flash and the rise of HTML5 have paradoxically helped the company. (Fun point to note: Allaire helped create the Macromedia MX (Flash) platform while he was chief technology officer at Macromedia.) The problem is that with many different browser standards, it’s hard to make sure there’s good video playback across different devices.

“People thought HTML5 was going to be a panacea. But the reality is that HTML5 creates a whole new level of complexity for publishers that want to work across many platforms,” he said. “It’s been one of the greatest sources of new business for us.”

Facebook is also dealing with this issue, and recently released a browser test suite called Ringmark a few weeks ago to help mobile web developers check if their HTML5-based apps work on many different mobile browsers.

Now with the extra capital, Brightcove plans to grow the side of its business targeting app makers and is eyeing acquisitions. ”One of the benefits of being a public company is access to capital, and we’ve raised about $60 million so it certainly should be easier to do M&A.” Allaire didn’t want to say what kinds of companies he’s targeting though.

He said that filing amid a wave very high-profile IPOs wasn’t too challenging for a company of his size.

“Instead of retail investors that were interested in Groupon or Yelp, we targeted mutual funds and firms that were interested in small cap software companies. We were looking for a high-quality investor base. It’s been a good process and overall, we’re happy with it.”

Brightcove had raised funding from Accel Partners, General Catalyst Partners, Allen & Company, AOL, The New York Times, Maverick Capital, IAC and Hearst Ventures. Accel and General Catalyst each owned 26.4 percent of the company before the IPO.

Online video service Brightcove has just made its public debut on the NASDAQ under the symbol ‘BCOV’, with an opening trade of $14.50. This is up over 30 percent from the company’s original pricing of $11 per share, after setting the range of $10-$12 per share. At $14.50 per share, Brightcove is valued at $382 million.

Brightcove sells online video publishing and distribution services, including Brightcove Video Cloud, an enterprise-friendly online video hosting and management platform, and Brightcove App Cloud, a software application development and management platform designed to help customers publish and distribute video through software apps across multiple Internet-connected devices.

Brightcove, which raised $55 million in the offering, filed for the IPO back in August. Brightcove has raised over $100 million from Accel Partners, General Catalyst Partners, Allen & Company, AOL, The New York Times, Maverick Capital, IAC and Hearst Ventures, among others.

The company says it had 3,872 customers as of Dec 31, including The New York Times Company, Oracle, AOL, Philips Electronics, Macy’s, Bank of America, the U.S. Army and Honda. Brightcove’s revenue grew in 2011 to $63.6 million (from $43.7 million in 2010), but still showed a loss of $17.8 million. Thanks to plans to “continue to invest in the growth of our business and operations,” Brightcove says it expects to see losses until the end of this year at least.

Viewing web video content on three different devices is likely to yield three different outcomes. Even if it’s possible to get the whole video to play properly, often there are inconsistencies in how the player reports itself, how the video is requested and cached, and how it is filtered or displayed. It’s bad enough for a user, but for advertising it could be fatal. If you can’t guarantee the content, how can you guarantee the ad?

Brightcove is taking this problem head-on with a new set of HTML5-compatible “smart players” and an ecosystem that tries to recognize and account for the discrepancies between Webkit renderers, OSes, and so on. They’ve put together a little pamphlet for you to peruse if you’re interested.

Essentially the announcement is that they have created a middle layer for HTML5 video analogous to the one they’ve had for Flash containers and such for years. The Brightcove abstraction layer will act as a middle man between the video container and whatever’s requesting it. This way, Brightcove can smooth out the known inconsistencies between browsers, acting as a sort of interpreter and ensuring that the video loads correctly and the tracking and ads display properly. The customization options from their Flash container now extend to HTML5 as well.

Naturally the fragmentation affecting the <video> tag is something that also needs to be figured out among the various browsers and OSes. But if you’re an advertiser and want to future-proof yourself against it right now, you don’t want to wait for Mozilla or Apple to bring their code up to code.

Online video platform company Brightcove this morning announced that it has filed a registration statement on Form S-1 with the SEC in connection with a proposed IPO of its common stock. The company is looking to raise up to $50 million through the offering.

Brightcove offers cloud-based solutions for publishing and distributing video and other digital media.

Brightcove’s revenue grew from $24.5 million in the fiscal year ended December 31, 2008, to $43.7 million in the fiscal year ended December 31, 2010, the filing reveals.

Revenue came in at $28.4 million for the six months ended June 30, 2011.

The company’s isn’t profitable – they report a net loss of $9.7 million for the first half of this year – and Brightcove says it doesn’t expect to be in the black until the end of 2012.

The company says in the filing that it had close to 3,300 customers in over 50 countries as of June 30, 2011, including The New York Times Company, Oracle, AOL, Philips Electronics, Macy’s, Bank of America, the U.S. Army and Honda. It currently has close to 300 employees.

The company also reveals that it signed a new lease for over 80,000 square feet of office space in Boston, Massachusetts. The company says it expects to move into its new HQ on April 1, 2012.

In May 2011, Brightcove announced the release of ‘App Cloud’, a software application development and management platform designed to help customers publish and distribute video through software apps across multiple Internet-connected devices. The company says it expect its first commercial sale in the second half of 2011.

Brightcove filed to list on the NASDAQ Global Market under the ticker “BCOV”.

Whether this is the right time to file for an IPO is up for debate, of course. Due to the global economic turmoil, a bunch of recent IPO candidates just decided to delay their offerings.

Brightcove’s offering is being made through Morgan Stanley, Stifel Nicolaus, RBC Capital Markets, Pacific Crest Securities, and Raymond James.

The company’s list of investors include Accel Partners, General Catalyst Partners, Allen & Company, IAC and Hearst Ventures, among others.

Also read: Brightcove Streaming 700 Million Videos A Month; Granted Broad Patent For Online Video

Brightcove is no longer just for videos. Starting today, it is launching an entire new product line for making mobile and web apps called Brightcove App Cloud. Developers will be able to use App Cloud to create their apps once and then deploy them to the iPhone, iPad, Android phones and tablets, and beyond. It creates HTML5 apps as well as mobile touch websites, and it is not limited to video apps.

In the video above, Brightcove CEO Jeremy Allaire explains what App cloud is and answers some questions about what appears to be a departure from the company’s primary focus of providing an online video platform. The App cloud apps don’t need to be video apps, but they are geared towards media apps. Just as Adobe spits out iPhone apps from its Creative Suite, so too will Brightcove App Cloud—except, as Allaire points out, Brightcove App Cloud isn’t based on any proprietary technology. It is all open technologies such as HTML5, CSS and Javascript.

Brightcove App Cloud creates an app template, and then customizes it depending on which platform it will be deployed on.

Brightcove was issued a broad patent for the “Distribution of content,” which covers the basic features of a professional online video platform. Patent No. 7,925,973, which was applied for on August 12, 2005 by CEO Jeremy Allaire and CTO Bob Mason, describes some of the basic features of all professional online video players such as customizable players, digital rights management, and syndication. In other words, how video is experienced, and how it is controlled—essential aspects for professional video publishers.

Of course, Brightcove has done just fine so far without that patent. Brightcove is now streaming 700 million videos a month, I have learned, which it believes would place it among the top five online video platforms on the web. That number is up from 400 million videos streams per month in March, 2010. Of course, those videos are spread out among Brightcove’s 3,000 paying customers—mostly professionals publishers, media sites, and brands—instead from coming from one destination like YouTube.

By comparison, YouTube does billions of video streams per day , but it is also an order of magnitude bigger than everyone else. But if Brightcove represents the long tail of professional video, there is a lot of it and it is growing fast. In the past 6 months, Brightcove publishers uploaded as much video to it servers as they did during the entire first five years of Brightcove’s existence. Every minute, Brightcove encodes 5 hours worth of new video content. It was about an hour’s worth every minute 18 months ago.

Correction: The original post cited growth from 400,000 video streams a day to 700 million. The first number has been corrected to 400 million.

Facebook exhibited the healthiest growth rates in terms of referral traffic, now accounting for 11.8% of all referred video traffic to media companies. The report says that the social network’s growth is mainly attributed to Facebook’s increasing support for white-listed embedded video that plays in-stream, allowing for contextual viewing without requiring any redirect of traffic. Google accounts for 60% of traffic whereas Twitter only accounts for around 2% of traffic. Clearly, search drives views.

In terms of growth rate, Yahoo and Twitter both showed dwindling growth rates. Facebook is growing the fastest in terms of referral traffic followed by Bing and Google.

However, Facebook and Twitter elicited higher engagement rates than Google measured by minutes viewed. The report showed that brands (as opposed to magazines, newspapers, broadcasters, and online media) have higher engagement rates across all referring sources, including Google and Facebook, than other content, which could suggest both video discovered with SEO and through social sharing are resulting in increased engagement for brand viewers. Brands saw highest video engagement when referred by Yahoo, reaching 2:30 minutes viewed on average, which may point to the success of syndication efforts of such content.

Editor’s note: Guest author Ashkan Karbasfrooshan is the founder and CEO of video site WatchMojo. In this post he examines looks back at the online video deals of 2010 and what deals could happen in 2011. You can find his previous guest posts about online video here.

With the recent rumor that Google’s YouTube unit was looking at acquiring video content company Next New Networks, it’s clear that anything can happen in the rapidly growing online video space.  While some are shocked to see that Google may cross over and own content, the rumor does sound plausible:

• Next New Networks generates the vast majority of its views on YouTube and if the companies were under one umbrella, it would remove some of the monetization obstacles and challenges Next New Networks probably faces when trying to sell their YouTube inventory.
• YouTube, meanwhile, has massive online video street credibility but totally lacks the human sensibility required in media and content in particular to take a rising star on the site and take them to the next level.  That is Next New Networks’ business.

The combination would allow YouTube to fold in Next New Networks and use it as a talent management platform, basically, and give the video aggregation site the ability to create videos if need be.

Loaded with nearly $25M in venture financing, it’s not quite the initial public offering that some of their investors were hoping for, but let’s face it, an exit to Google is nothing to be ashamed of.

Close, but no cigar: IPO Talk Will Increase

In fact, while you can blame Sarbanes Oxley or a lack of credible initial public offering (IPO) candidates, it is likely that 2011 will come and go with very few, if any, major liquidity events in the public markets for online video startups.  As such, the most likely path to liquidity for venture capitalists (VCs) remains mergers and acquisitions (M&A).  With VCs having invested in so many online video startups and industry revenues still not matching the lofty expectations that whet VCs appetites in the first place, a lot of boards will cash out in 2011 when buyers come knocking.

Only Certainty: Dealmaking Will Continue

After many years of expected consolidation, 2010 saw a wave of acquisitions:

• AOL acquired StudioNow and 5Min (as well as TechCrunch, of course)
• Specific Media acquired Broadband Enterprises
• Undertone acquired Jambo
• VideoEgg acquired SixApart
• Tremor acquired Scanscout

Apart from Video Egg’s merger with Six Apart which was largely based on the shared VCs doing some financial engineering, with these deals, we saw examples of both vertical and horizontal integration.

The terms horizontal integration and vertical integration are used in microeconomics and strategic management, whereby:

• horizontal integration describes a strategy used by a business that seeks to sell a type of product in numerous markets. Horizontal integration occurs between two firms which are in the same industry and in the same stage of production, ex: a car manufacturer merging with another car manufacturer.

Conversely:

• vertical integration combines companies in a supply chain by a common owner. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need.

Vertical Integration

AOL’s moves were examples of vertical integration:

• StudioNow gives it a platform to hire producers to create videos for its AOL properties and myriad brands.
• 5Min gives it the opportunity to distribute its own videos and those it has licensed to more places around the Web.

These deals have given AOL an end-to-end capability in video.

Horizontal Integration

Meanwhile, we saw display banner ad networks venture into online video:

• Specific Media acquiring Broadband Enterprises and Undertone acquiring Jambo enabled giant ad networks in the display banner arena to enter the video market rapidly.
• Tremor acquiring Scanscout is plain consolidation among two competitors who probably got tired of tussling in the marketplace and eating into each other’s margins.  The deal gives them a bigger footprint and a march towards an initial public offering.

In this context, horizontal integration occurred between potential or actual competitors.

2011 Storylines

There is nothing to suggest that 2011 will be less busy on the online video deal front.  Here are some of the trends I think will drive M&A activity in 2011.

Ad Networks

Ad networks are rife for consolidation and can be broken up into:

• The source of technology, Ad Servers: the software required to properly serve ads and offer the kind of targeting and reporting that advertisers and publishers expect these days.
• The source of media, Ad Networks: the matching and intermediating between advertisers and publishers

A few firms have footholds in both: Auditude (ad server) also runs Cross Point Media (the ad network), Tremor runs the Acudeo ad server; while some operate under the same moniker (Adap.tv).  Some focus just on one space: LiveRail doesn’t have buy or sell media, it only offers an ad server.

With Jambo in the hands of Undertone and Broadband Enterprises part of Specific Media, expect display banner ad networks (such as Specific Media, Undertone or Tribal Fusion) to acquire video networks or see consolidation within video ad networks and servers.  There are no shortage of remaining players: Adap.tv, Auditude/Cross Point Media, Brightroll, Freewheel, LiveRail, Overlay.tv, Panache, Spotxchange, Tidal TV, Video Egg, Yume . . .  to name a few, with Tremor becoming a leading IPO candidate.

Big Media: A state of inertia

We have yet to see traditional media companies with their large purse strings step into the ring.  It’s only a matter of time though, as Magna’s latest figures show that online advertising will overtake newspapers by 2013, though TV advertising will still command the lion’s share of all ad dollars through 2016, with an estimated 40 percent share at that point.  Although, by then online video will account for $11.4 billion in global ad spend.  Where online video trumps television advertising is in growth rates: online video will grow at an average rate of 19.6% through 2016 (with estimated 50% growth in 2011 alone), versus a 7.5% growth rate for TV advertising.

With large media companies hoarding more cash than ever, it’s fair to assume that those who attempted to “build” from within and failed will soon shift gears and look to “buy”.

But the reality is that big media, by and large, still doesn’t know what it wants to do in the arena.  With Rupert Murdoch divesting from the Web in general and shifting focus from paywalls to iPad publications, it’s unlikely that News Corp. will ante up much for online video.  How about CBS?  With changes at the very top of’ management, I also don’t see them making too many shifts back into online video. Disney is more focused on gaming than online video.  NBC Universal, now in the hands of Comcast, will probably be stuck in integration mode for most of the year.  Time Warner seems intent on continuing its TV Everywhere initiative to maintain its margins and offline revenues.

Newspaper companies stand the most to benefit from online video, but they will spend the first half of the year wading through the opportunities to understand what strategy and targets will most help their business: technology to serve ads or video content to sell ads against.

The Portals and Major Online Companies

AOL certainly put itself in an enviable position with a series of moves, though integrating the various moving parts as its dial-up business continues to shrink will remain a challenge.

It’s now Yahoo!’s turn at bat.  With Ross Levinsohn coming on board and being a content guy with a penchant for deal-making, Yahoo! will mimic AOL and get more serious about video, but what they actually do is anybody’s guess.  They just unveiled their local strategy.  Is video next?  Don’t hold your breath.

Microsoft shuttered its Soapbox property and it remains to be determined what it will do in online video.  With Redmond admitting it offered Facebook a $15 billion offer and Steve Ballmer courting Twitter’s CEO Dick Costolo, I suspect Microsoft has priorities other than video.

Meanwhile, with $25 billion in cash and equivalents, Apple can move in multiple directions, namely:

• mimicking its acquisition of mobile ad network Quattro Wireless with an acquisition of a video ad network that could enable its foray into advertising; iTunes is a cash cow, yes, but it could hedge itself by monetizing its booming Apps business via advertising and the iPad is the perfect video consumption device
• it bought Lala to enter the music streaming business.  By the same logic, it could buy a CDN company to stay one step ahead of the surging bandwidth needs of mobile video delivery and find a way to rely less on carriers (BitGravity, Edgecast, Limelight Networks or Panther Express are some targets)
• the acquisition of a major ad agency (or a parent holding company); this is one of the more unlikely of scenarios, but judging by some of the challenges Apple has had with its iAd initiative, it’s not crazy altogether
• a livestreaming platform such as Justin.tv, Kyte, Livestream/Mogulus, Qik, uStream
• a video search engine or discovery tool, to attack Microsoft and Google in the next area of search (it would be crazy to attack Google head on in traditional search) and it can find a plethora of companies looking to exit: Ramp (formerly Podzinger/Everyzing), Blinkx, Dabble, Pixsy, Cast TV, Clipblast, Mefeedia.

Amazon has its hands in storage (S3) and content delivery (Cloudfront).  It’s possible it will buy a video player technology to offer end-to-end solutions.  There won’t be any shortage of likely targets: Ooyala and Brightcove might be too expensive but the list of eager sellers includes bliptv, Kaltura, Feedroom and VMIX.

Ooyala and Brightcove will themselves look at tuck-in deals as they ramp up their own growth.

Facebook is a major player in online video, peaking at No. 2 in comScore’s August video rankings when it surpassed Yahoo! (though Yahoo! regained the No. 2 spot the next month in September).  Facebook has a tendency to acquire companies for its people, but like Apple, it could also acquire:

• an authentification system to differentiate the massive amounts of video it is hosting
• a CDN company to ensure stability and lower hosting costs as it continues to grow
• a livestreaming platform such as Justin.tv, Kyte, Livestream/Mogulus, Qik, uStream
• an ad network to make money from video.

InterActive Corp. (IAC) is sitting on a lot of cash and investing in content creation efforts via Electus and Notional.  It would be logical for them to now invest in some kind of distribution play to ensure that their programming is actually seen: potential targets include DailyMotion, Metacafe or Nabbr.  It does own Vimeo, but that doesn’t offer the kind of reach marketers need.  We saw Sony do this via their Grouper acquisition a few years ago, renaming the website Crackle and using it to showcase their programming.  While the jury’s out on the success of that deal, we might see IAC pull a similar move.

Will any of these deals actually happen?  Who knows.  Predicting this kind of thing is a recipe for failure, but there is an adage that says “buy on the rumor and sell on the news.”  With more hype and expectations surrounding online video, the buying will continue.

When it comes to getting people to watch online videos from media sites, Google is still the largest source of outside traffic. Search drives views. But the second largest source of traffic is not Yahoo, Bing, or another search engine. It is now Facebook. According to a report on Online Video & The Media Industry put out jointly by Tubemogul and Brightcove, Facebook passed Yahoo in the third quarter to become the No. 2 source of traffic to online videos at media sites. (The study measures videos across the Brightcove network, with a focus on newspaper, magazine, broadcaster, brand, and online media sites).

In the third quarter, Facebook shares accounted for 9.6 percent of online video traffic. Google still towers above Facebook with more than 50 percent of the referring traffic coming from search, but that is down from the second quarter when it was above 60 percent. In fact, across all search (Google, Yahoo, and Bing), referral traffic to videos on media sites is down.

When it comes to actual engagement in terms of minutes watched, however, viewers coming from Twitter watch longer on average than people coming from either Facebook or search. Twitter’s higher engagement is something Tubemogul has been tracking for a while. But when you break down engagement by different type of media sites, you get more of a mixed bag. Twitter shares result in longer video views for broadcasters, brands, and online media (the orange bars in the chart below), but people coming from Facebook watch longer on magazine and newspaper sites (the purple bars). And Google (maroon bars) still beats both for time spent watching videos on newspaper sites. If you think about it, that makes sense since people go to Google looking for timely information, so they are more likely to watch a news video for a longer period of time coming off a search than, say, an entertainment video. In all of these cases we are talking about average time spent watching of less than 2 minutes, so it is all relative.

The report has all sorts of other good data on how different types of media sites are doing when it comes to online video. The entire report is embedded blow.

Editor’s note: Online video is going through many changes as people begin to connect their TVs to the Internet and social sharing over Facebook and Twitter influence what people watch as much as search. In this guest post, Jeremy Allaire, founder and CEO of online video platform Brightcove, gives his view of where online video is going next year. Allaire’s last guest post for us was on the standards war in mobile video formats.

Web video is just getting started, and 2011 promises to be yet another year of transformation in the online video landscape. The stage is set for mainstream connected TVs, Over-the-top adoption, and even more videos watched directly streamed from website. Here are the five biggest trends in online video that will play out in significant ways for end-users and publishers alike.

1. Connected TV Platform Wars

The past year saw the definitive emergence of platform wars in the handheld computing landscape. This year will see those wars expand into new territory, the Connected TV platform market. Input 1 on the TV is the new homepage or start screen. We should expect that the battles will look incredibly similar to the market that emerged for smartphones over the past several years, but with some other entrenched players. Google vs. Apple vs. the dominant TV brands. In fact, these platforms will largely be based on a similar architecture, offering app and content publishers a common model for creating device-oriented applications and Web experiences.

Apple will ship an iOS-based Apple TV display and will open up Apple TV to third-party apps beyond Netflix. Developers will have a common model for building apps across the phone, tablet and TV, as well as a suite of new APIs for phone and tablet apps to interact with TV apps (think remote control type activities, gestures for games, etc.). Its platform will also support HTML5 with a set of design standards for TV Web 10-foot experiences.

Google, which has already put forward its first rendition of the same, will expand on this and create models that integrate Android apps across all devices.

In addition, the largest of the TV CE manufacturers (e.g. Samsung and LG), will put their best foot forward with TV App SDKs, App Stores and TV Web standards based on HTML5, looking to leverage their massive volumes and strong position in the living room to fend off Apple and Google from owning the consumer experience and app distribution relationships.

Expect by the end of the year a frenzy of publisher and developer interest in creating TV Apps and TV Web experiences as the volumes of products shipping by the end of 2011 will be in the tens of millions and very attractive as a target platform.

2. Over-The-Top TV Subscriptions will emerge, but largely fail

The long coveted idea of Over-The-Top (or OTT) TV distribution (through services such as Google TV, Apple TV, or Boxee), which would lead in turn to tens of millions of consumers “cutting the cord” with their cable provider will further take hold in 2011, but will largely disappoint consumers.

While library video on-demand subscriptions through services like Netflix, Xbox Live Marketplace, and Amazon VoD offer users great and broad libraries of content, they don’t yet offer a compelling substitute to a cable subscription.

In 2011, we’ll see the first wave of attempts to create more rich TV subscription bundles that are available over the Internet. Expect Netflix to start paying for more recent and popular TV shows, and for Apple to potentially offer a low-priced ($25/month) TV subscription product with a collection of recent hit TV shows. But most major broadcasters and studios won’t bite or participate in a meaningful way, leaving consumers still feeling like these products don’t offer enough. The absence of a broad offering of live sports will be a major factor keeping cords from being cut.

At the same time, your existing cable subscription will start to offer a greater range of content over the Web, and likely top-tier cable companies such as Comcast / Xfinity will make their online video products available through open devices and apps, blurring the lines even further.

We’ll have to wait until 2012 when the scale of Connected TV adoption is large enough that online TV subscription providers will be willing to write big enough checks to get the best available programming.

3. Facebook and Twitter will become larger sources of video traffic than Google search

In a recent jointly published study by Brighcove and TubeMogul, we reported that the fastest growing source of traffic to videos on publisher websites were social platforms Facebook and Twitter. This growth is accelerating and the role of these platforms as primary content discovery and viewing environments will reach a point by the end of the year that they will soon be as large and important as Google search.

Increasingly, online video publishers will treat Facebook.com as a Web publishing platform that is as important as their own Web domains. Facebook will welcome and embrace using its site as a media distribution end-point, offering rich tools and a business model that doesn’t require that it share in advertising revenue generated from impressions on its site. This will be highly attractive to publishers and we’ll see more and more VOD type applications launched concurrently on publisher sites and Facebook.com.

4. Video Ubiquity—Every Company is a Media Company

While a bit of a cliché, we’re seeing this happen at an accelerating pace. In 2011, if you are a professional institution, organization or business of any size, you will have an online video strategy. Video is becoming such a central part of how one communicates, markets, educates and informs online that every pro website will be publishing some form of online video.

It will first feel a lot like the brochureware era of the first generation Internet, with a lot of poorly-conceived and poorly-executed content. But a new era of Web video production businesses will emerge much as the Web development industry of the mid-90’s emerged, and organizations will start to iterate and experiment with how to best accomplish their online objectives using video.

5. Battle Over Video Delivery Standards Heats Up

Google’s recent announcement that they are acquiring Widevine adds fuel to what is already an important platform war over how video is consumed, secured and delivered both on PCs and increasingly on non-PC devices.

Several alternative stacks are emerging for encrypting / securing and then, in turn, delivering video in a high-quality and reliable manner to all platforms and devices. Apple offers Apple HTTP Streaming which both secures video and provides for adaptive delivery to both HTML5 and iOS Apps, but is proprietary to Apple’s devices and software.

Adobe offers its own DRM services and HTTP streaming standards, both of which are proprietary but are designed to work across client and device platforms that support the Flash runtime.

And now Google will get in the mix with Widevine’s technology, which also provides a method to encrypt and secure video files and deliver them to nearly any device or operating system using adaptive bitrate HTTP streaming. We should expect that, like with On2’s video codecs which were open-sourced as the WebM video standard, Google will open source and freely distribute the Widevine technology, as well as bundle it as a standard part of the infrastructure in Chrome, Chrome OS and Android browsers and operating systems.

It all adds up to more Web videos on more devices and points to a day when we won’t be able to tell the difference between the Web and TV.

Once a year around this time, Brightcove rolls out a bunch of new features to its online video platform and calls it a new release. With Brightcove 5, this year the service is becoming even more Apple-friendly than ever before. Not only is there more HTML5 goodness baked in, but it now supports Apple’s HTTP streaming for video apps and also offers a template for creating video apps on the iPad.

Brightcove started paying closer attention to how videos play on Apple products last year with Brightcove 4, which added support for an iPhone video player. Then as it became clear that Apple would not support Flash players in its mobile devices, Brightcove started transcoding to HTML5 and laying out a roadmap to add support for analytics, advertising, and custom players.

Now, with Brightcove 5 it adding in more HTML5 features. When media sites and other customers create branded video players, they now look the same in Flash and HTML5. And Brightcove’s analytics now keeps track of views in HTML5 players alongside Flash players. It also supports APPle’s new HTTP streaming for videos in iPhone and iPad apps, as well as HTML5 browsers (but only on Apple devices). Finally, it is going to start pushing its iPhone app for video producers and reporters to be able to shoot, edit, and upload video straight from their iPhones to their Brightcove accounts.

In addition to the HTML5 and Apple-specific features, Brightcove is also adding YouTube sync, which lets video producers push their Brightcove videos automatically to their YouTube channel or manage which videos they would like to promote there. Overall, video uploads and processing should also get faster for pro and enterprise accounts with some new file transfer acceleration technology Brightcove is licensing from Aspera.

Online video platform Brightcove took another step towards an eventual IPO today by hiring a new chief financial officer. Christopher Menard is the new CFO. Previously, he was the CFO at Phase Forward, a clinical trials enterprise software company bought by Oracle last April for $685 million. Before the Oracle acquisition, Phase Forward was a public company.

In the announcement of Menard’s new role, Brightcove stresses that he “played an integral role in the execution and integration of six acquisitions, successful execution of the IPO and secondary stock offering, and implementation of global financial systems.” Menard also teaches a course on M&A at Boston College’s business school. Just the kind of guy you want before you file for an IPO. Either that, or an M&A exit.

Over the past year, Brightcove has been beefing up its executive team, adding a new president and COO (David Mendels), a new board member (former Macromedia CFO Betsey Nelson), a new senior VP of sales in North America (Paul Goetz), and a new VP in charge of its growing Asia-Pacific business (Dennis Rose).

That’s because it now supports HTML5, enabling videos to be monetized on Apple’s tablet. Remember the iPad doesn’t support Adobe’s Flash Video, the current industry-wide standard for delivering online video, so it’s the HTML5 way or the highway as far as Apple is concerned.

And specifically, Monetizer AdPlayer now offers a plug-in for Brightcove, which has already rolled out a HTML5-friendly version targeting the iPad – see the video demo below.

In a blog post, Alfred Ruth, Co-founder & VP Products at Videoplaza, notes that HTML5′s video support and adoption is still in its early days, with the industry yet to settle on one specific video codec or support DRM, which is required by sectors of the video publishing industry.

It’s going to be really interesting to follow the pace of HTML5 adoption. The standard is not finalized yet, and the technology is obviously in it’s infancy. There’s an underlying conflict going on about which video codec that should be used (H.264, Ogg Theora or WebM).

Further, HTML5 is also suffering from the same problem that a couple of years ago was partly responsible for holding Flash back: lack of support for DRM.

In other words, it’s not a real standard yet despite the potential advantages it has in the long run. What’s required is an evangelist to push the burgeoning standard, and Ruth notes that Steve Jobs isn’t a bad candidate.

While Flash ultimately overcame this and became the de-facto standard it is today, it could probably have turned out completely different if services like Youtube, Sky [UK] and M6 [FR] would have picked another technology. In the same way, HTML5 is probably going to need some high profile evangelists and migrations of major services in order to become mainstream and get content owners across the globe to recognize the standard and allow their content to be streamed in this way.

But then again, speaking of evangelists, Steve Jobs and Apple has already made a good start driving HTML5 adoption. And he’s not alone.

Videoplaza, headquartered in Stockholm, targets broadcasters, newspaper publishers and other premium media owners and has to-date partnered with several leading European media companies including Sweden’s TV4 Group, Denmark’s Ekstrabladet, La Vanguardia in Spain, and myvideorights.com and Incisive Media in the UK (see TCE coverage).

You can hardly run into a media site these days that no longer includes online video (even we are getting ready to launch TechCrunch TV). But which kinds of media sites are getting the most views? In a joint report put out today by Brightcove and Tubemogul (embedded below), the non-YouTube sites seeing the most success with online video are those of the broadcast TV networks and Web-only media brands, followed by magazine sites and music labels. Newspaper sites are lagging when it comes to both total video views and growth.

In terms of how people are finding these videos, a little more than half (51.75 percent) are navigating directly from the publisher’s main site. Following that, Google search is the next biggest source of video-viewing traffic (38.92 percent), followed by Yahoo (5.58 percent), Bing (2.29 percent) and Facebook barely registers (with only 0.40 percent). Twitter is even smaller, but people who find videos are more engaged than any of these other sources of traffic, on average watching videos longer across different media categories.

In the first quarter of 2010, the Broadcast TV networks sampled in the study streamed 380 million videos, with Web media brands coming up close behind at 326 million video streams. However, the native Web brands, which include both video-only and general entertainment and news sites, saw 300 percent annual growth of video views in the first quarter, compared to 44 percent growth for the broadcast sites. For all of 2009, Web media sites grew twice as fast as broadcast TV sites (165 percent vs. 74 percent). At this rate, they will overtake the broadcast sites in video views later this year. (The report is based on a sample of Brightcove’s media customers, and is not necessarily representative of the Internet as a whole, but directionally it should be accurate given the size of Brightcove’s video-hosting network).

Magazine sites are showing some strength with their video offerings. In the first quarter, they streamed 190 million videos, up 90 percent. They are streaming as many videos as music label sites, which came in at 191 million videos, up 60 percent. Newspaper sites aren’t doing nearly so well. With 136 million video streams viewed in the quarter, they were only able to manage 5 percent growth.  And newspaper sites are pushing videos more than any  other type of media site, with 2 billion video player pageloads in the quarter (i.e., pages which loaded with a video player, but were not necessarily clicked on), compared to 1.2 billion for magazine sites, 760 million for Web-only media, and 670 million for broadcast TV sites.

Obviously, newspaper sites are having a real problem getting their audiences to watch videos.  For every 2 billion videos they throw in front of them, only 136 million get viewed (6.8 percent).  Whereas broadcast TV sites are getting 380 million views for every 670 million attempts (56.7 percent).  Maybe that is because people go to newspaper sites for news and quick hits, and they go to TV sites to watch videos.  But even magazine sites are seeing a 12.7 percent hit rate.  Again, this could be a time commitment scenario.  Most people go to news sites for quick facts and breaking news.  But those people who do bother to watch videos on newspaper sites, are slightly more likely  to watch them to the end more than on other types of sites.  The completion rates for videos on newspaper sites are 41 percent, versus 39 percent for magazine sites, 38 percent for broadcast sites, and 29 percent for music label sites.

When Steve Jobs tells the technology industry to get in line, it gets in line pretty quick. All the initial hair-pulling and angst surrounding Apple’s decision to not support Flash on the iPad is already mattering less and less. At least for video, most of the major online video platforms such as Brightcove and Ooyala are supporting HTML5 playback in the iPad browser. YouTube might eventually get there as well.

Now Kyte is jumping on the HTML5 bandwagon. Kyte videos will stream in an HTML5 player in the iPad browser using the same embed code that triggers a Flash player on other computers. But Kyte is also going to release a software developer kit (SDK) in the next couple weeks which will let its media partners create apps specifically for the iPad. The SDK will also let them create versions of the same apps for the iPhone and the iPod Touch. This will replace the iPhone framework Kyte released last year.

The SDK will customize apps for the larger screen of the iPad, allowing for a larger video player and more room for chat and show guides. In the mockup above from Om Records, you can see how there is more room for the various elements of the app on the iPad.

Kyte’s main customers are media brands, music bands, and brands such as ABC, Fox News, MTV, Lady Gaga, Alicia Keys, and Calvin Klein who want to publish videos to their Websites and mobile apps all from the same system. Kyte’s new Apple “universal” SDK will allow developers to create apps for both the iPhone and the iPad, and send out the correct version depending in the user’s device. They can also charge once and deliver different versions of the app to multiple Apple devices.

The lack of Flash on the iPad is a sore point for many and often listed as one of its greatest potential weaknesses. Not allowing Flash on the iPhone is bad enough, but on the larger iPad with full-screen browsing, its absence will be much more noticeable. Or will it? Already the Web is adapting. Videos powered by Brightcove, for instance, will stream in an HTML5 video player when it detects an iPad. On the iPhone browser, the video thumbnail will open up the Quicktime player. It will also work on Android phones.

Brightcove CEO Jeremy Allaire is agnostic about the Flash Vs. HTML5 debate. “HTML5 is great,” he says. “It is an open standard, and firmly entrenched in the Apple device platform. Flash can’t reach those platforms for political and business reasons.” But HTML5 simply cannot do everything Flash can, especially when it comes to supporting advertising, audience measurement, customized players, and social sharing. So he decided to bring HTML5 video to parity with Flash for anyone who uses Brightcove. (Note that this is for videos playing in the browser. Brightcove already supports video playback in iPhone apps).

It will take until the end of the year to reach full parity with Flash, but that is his goal. At first, Brightcove videos will play back in a very basic HTML5 player when they detect an iPad. But over the next nine months or so, Brightcove will add the same audience measurement and advertising features available in its regular Flash player. Brightcove will still display the video in Flash when the viewing device supports it, but for the iPad, iPhone, and even Android phones, videos will play in HTML5 and most viewers probably won’t notice the difference.

Already today you can see who these videos work on the iPhone. For example, Brightcove turned on the capability for Techcrunch videos such as this one when viewed in an iPhone browser. When the iPad comes out, you will be able to watch our videos on there as well, along with videos on the sites of the New York Times and Time magazine, who also use Brightcove.

Making HTML5 playback available is just something all video platforms will eventually do. Ooyala is set to offer it for the iPad as well, and YouTube is moving in that direction as well.

The EMI Group company will use Brightcove as its online video publishing and syndication platform of choice in North America, across all of its website properties and to some of its third-party syndication partners.

Brightcove sure knows how to convince big music to sign deals with them: in addition to EMI Music, the company works with a host of other major record labels including Warner Music Group, Universal Music Group, Sony and Atlantic.

The Brightcove platform will enable EMI Music to create customized viewing experiences, including country and language-specific video experiences for its Web properties, and expand the reach of its video content through SEO, social sharing tools and a range of third-party distribution capabilities. EMI Music will also be able to tap into Brightcove’s monetization and analytics tools in order to open up new revenue streams through online video advertising.

Brightcove recently scored a few big wins in Europe as well, signing up the U.K.’s Virgin Media and a number of customers in Spain ranging from publishers Conde Nast Digital Spain and Grupo V to video and music providers TQMadrid and Sony Music Spain. It doesn’t win all battles, though: rival Ooyala recently took over as lead provider of an online video distribution platform for the Telegraph Media Group.

Also check out Michael Arrington’s video interview with Brightcove CEO Jeremy Allaire in Davos from earlier this year.

(Via press release)

Editor’s note: Guest author Ashkan Karbasfrooshan is the founder and CEO of video site WatchMojo. Below are his picks for the ten most likely M&A deals in online video. Previously, he wrote a series if posts about the state of online video (Part I, II, III, and IV).

Which online video companies will get bought in 2010?   Venture capitalists are desperately looking for exits while the usual suspects are sitting on more than $80 billion in cash: Microsoft ($20B), Apple ($40B), Google ($15B), Amazon ($3B), and Yahoo! ($3B) just to name the cash positions of a few potential acquirers.  Theoretically, it should be a match made in heaven, but the sheer number of venture-backed video startups is staggering so when the music stops, not everyone will find a dancing partner.

Once you assess what drives companies to merge or acquire one another, however, it seems like we’re about to enter a period of mergers between video competitors and see a series of acquisitions by larger companies looking to accelerate their video strategies, with a common theme being increasing both monetization and margins.

Right now, as the chart above shows (click to enlarge), there are two types of online video companies: those with sky-high ad rates but fairly limited inventory (company A) and those with huge inventory but woeful monetization (company B). Companies can extend profitability through technology, ad solutions or content.

With that in mind, let’s look at those 10 potential deals.

1. Demand Media will acquire Tremor Media

Demand Media has raised $355 million but to this day still generates the bulk of its revenue from its domain registrar unit, eNom. However, it is trying to move into the content business, with its “Content Farm” strategy getting a lot of attention.

Demand Media’s existing content lends itself better to an arbitrage strategy built around Google marketing and monetization, but over time it will want to do a better job entering both display and video advertising and it will do that by buying one of the many, many video ad networks out there. Brightroll, which is focused on brands, is one option.  Tremor is another, focusing on reach.  That strategy should fit well with Demand Media’s modus operandi.  Tremor Media’s ads reach 177.6 million uniques, or 85% of internet users.

2. Lagardere Groupe will acquire Dailymotion

At first glance, French media conglomerate Lagardere seemingly sees no value in communities as a marketing platform: “There is no clear business model because you have a huge, massive audience, but it is not a marketing community,” says to Lagardere’s Chief Financial Officer Dominique D’Hinnin.

Monsieur D’Hinnin might be right, but never underestimate France’s sense of nationalism. Dailymotion is France’s answer to YouTube and it has taken steps to reduce its share of user-generated and pirated content in favor of professional videos. (Disclosure: Dailymotion is also one of WatchMojo’s distribution partners).

With $68.5M in funding—including a tidy sum from Le Fonds Strategique d’investissement, which is an investing arm of the French State—you can imagine that one of the pillars of the French media landscape, Lagardere Groupe could eventually step in and acquire Dailymotion despite its admitted monetization problems: “At the moment, we are poor at monetising our audience,” admits Dailymotion CEO Cedric Tournay. Lagardere could help with that provided Dailymotion can continue to de-emphasize its less advertiser-friendly content.

Additionally, Lagardere will be able to leverage Dailymotion’s audience to promote its own content: the company owns Hachette along with numerous other media entities.

3. Scripps will acquire 5Min

When 5Min (another one of our distribution partners) launched, it focused on user-generated how-to content. Thankfully for them, they have since moved away from that and currently mesh

a) aggregated premium and super premium content with

b) their monetization engine, a strategy which has propelled 5Min to become a Top 10 comScore video company.

Scripps is a producer of super premium content, and like Discovery Holdings, it might prefer to distribute its programming through TV and cable. But, with consumers viewing more and more videos on the Web, it will need more content for its sites and will look for more inventory online.

The two companies already have a strategic deal in place, so they have some familiarity with each other.

4. Google will acquire Ooyala

Last year it was rumored that Google was going to acquire Brightcove for $500-700M. That was always unlikely because many of Brightcove’s financial backers are the very same media companies that view Google as the bane of their existence.  Moreover, Google makes a lot of acquisitions but rarely are they large (YouTube, DoubleClick and AdMob being the exceptions).

A more logical fit to expand its video foothold would be Ooyala, which competes with Brightcove and includes Glam Media and others as clients… and was founded by a former Google executive.

Google has the consumer video market cornered with YouTube.  Iit could leverage Ooyala to go after the corporate market by undercutting Brightcove.

5. Microsoft will acquire Brightcove

The consolidation in ad services peaked with Google’s $3.1 billion acquisition of DoubleClick and Microsoft’s $6B acquisition of aQuantive. After selling ad agency unit Razorfish, today aQuantive is Microsoft Advertising, and as advertising continues to move into video, MSFT will probably want to offer a video content management to go along with the Atlas ad serving platform.  That is where Brightcove fits in.

If you think about it, Google owns video search by way of its YouTube acquisition. Microsoft wants to push into cloud computing and at least conceptually, owning Brightcove would give it a legitimate cloud computing foothold in professional video content with no real threat to any of its core businesses. It could also better integrate Brightcove (which increasingly powers media companies’ videos) into Bing’s video search, helping it kill many birds with one (albeit expensive) stone.

6. Yahoo! will acquire Freewheel

After acquiring Blue Lithium and Right Media, Yahoo! got a shot in the arm and grew its advertising reach across the Web, outside of the Yahoo.com property.

Freewheel is founded by former DoubleClick employees but Google (which bought DoubleClick) might have less interest than one would think in augmenting its video advertising reach across the Web considering it owns YouTube which accounts for 40% of online video consumption. YouTube only monetizes a small share of the billions of videos on the site.

Freewheel, which allows marketers and publishers to manage campaigns across a variety of distribution sites, would be a nice fit with Yahoo!, which might want to extend its Audience Network in video offerings.

7. Gannett will acquire Livestream

Gannett already invested $10 million in Livestream (then known as Mogulus).

The fit is a natural: print media will want to bolster its video offerings (be it content or technology). The main challenge here is that media companies have grown wary of buying technology firms, but news organizations will have a natural predisposition for all things live and the investment sets the stage up for an all-out acquisition.

8. Nielsen will acquire TubeMogul

TubeMogulprovides analytics to countless marketers and publishers (we use them at WatchMojo). Nielsen and comScore are both looking at adding video capabilities and TubeMogul has done a good job of getting wide adoption, providing Nielsen with a quick entry into the burgeoning video space.

Also, David Toth, former president, CEO, and co-founder of the NetRatings service joined TubeMogul’s board.

9. AOL acquires Howcast

AOL’s recent acquisition of StudioNow is a sign of things to come: When AOL was spun off from Time Warner, it was shackled with restrictions on its use of cash and thus the size of the deals it could complete.

But AOL wants to create content, lots of it. AOL’s Tim Armstrong is an investor in Howcast; he was also an investor in Patch, a local startup Armstrong acquired after joining AOL (to his credit, he simply recouped his initial investment and did not participate in the capital gain).

Howcast creates videos themselves, lets users create and upload videos and aggregates other professional content (Howcast is one of our distribution partners as well). While Howcast might have proven redundant with the StudioNow acquisition, AOL has a history of doubling up when it focuses on a space (think ad services: Tacoda, Advertising.com, and Third Screen Media) and Howcast is more focussed on how-to videos.

10. News Corp. acquires Break Media from Lionsgate, spins off NewCo

News Corp.’s Rupert Murdoch is in the process of divesting from the Web: first selling Photobucket, then chucking Rotten Tomatoes to Flixster while retaining a stake in the new venture.  I see something similar happening with Acquisition #10.

Break Media is one of the so-called YouTube clones who has managed to differentiate itself by focusing on the men’s 18-34 market and creating content, be it videos and now video games.  Back in 2007, Lionsgate invested $21 million in stock for a 42% stake in Break.com. At the time, it also got a call option (basically, the right to buy) which is “exercisable at any time from June 29, 2007 until the earlier of 30 months after June 29, 2007 or a year after a change of control, to purchase all of the remaining 58% equity interests (excluding any subsequent dilutive events), including in-the-money stock options, warrants and other rights, of Break.com for $58 million in cash or common stock, at the company’s option.”

The 30 month window expired on December 29, 2009, and despite Break’s momentum, I don’t see any major incentive for Lionsgate to exercise its call option. I do, however, see the following happening (well, maybe…).

Lionsgate might be more willing to trade its 42% stake in Break Media for a smaller share in a NewCo. that houses both Break Media and News Corp.’s IGN Entertainment, another leader in the men’s 18-34 space. (again, bothh Break and IGN are distribution partners).  This NewCo. would then be a more likely candidate for an IPO and would allow both Lionsgate and News Corp. to focus on their core businesses and cash out their investment over time.

Needless to say, all of the above deals are idle, if informed, speculation on my part.  What do you think are the most likely video exits this year?

Last month Ooyala, a provider of video platform applications and services, and the UK’s Telegraph Media Group signed an agreement for Ooyala to power online video on the publisher’s websites and co-develop new technologies.

Today Ooyala is partnering with Middle East based social media platform developer H2O New Media, giving it distribution rights to Ooyala’s video platform, Backlot. It wil be used to stream video content from the growing Middle East television and media sector.

But (also today) Brightcove is fighting back.

It’s announced a new phase of expansion in Europe with major Spanish customers for its platform in Spain.

These include Tuenti, Grupo Vocento, Sony Music Spain, Conde Nast Digital Spain, Grupo V, GEC, GX Magazine and TQMadrid. It’s also signing strategic partnerships and technology collaborations with 24/7 Real Media, Adobe, Atos Origin, Eyeblaster, Preview Networks Spain and Smartclip.

Brightcove has also now fully-localized its platform for Spanish speaking customers, including the whole back-end management system.

Prior to this Brightcove has already serviced Grupo Godo’s La Vanguardia, the highest-circulation daily newspaper based in Barcelona.