Paul Kedrosky is fond of saying the venture business is a bubble business. This ties into the truism that competition in a segment "validates the opportunity." Intuitively, it would be silly to think that any idea with real merit wouldn't invite multiple startups and VC backing; particularly in an environment where there's too much capital searching for too few deals.
Perhaps no segment better exemplifies this paradigm than the online video distribution and sharing market. Just a few months ago, there was plenty of debate about which company and approach was the best. I had profiled a few of them including Kontiki [since acquired by Verisign] and Brightcove, but obviously the tour de force has been YouTube and it's $1.65B acquisition by Google. YouTube's massive takeout is quite likely going to be the best exit in the current vintage [regardless of segment]; or at the very least right near the top; and that means plenty of other people are going to try to ride the crest.
Light Reading, best known for its coverage of telecommunications equipment and networking news, has a fantastic profile of the video sharing space. Phil Harvey profiles 61, yes, SIXTY ONE!!!, companies that are attacking the space in some way, shape or form.
I also threw the data into an EditGrid spreadsheet. Please make sure to give credit to Light Reading though if you re-use the data for any reason.
It would be fascinating to tally how much venture money has gone into these 61 companies; if anyone out there had access to this information and would be inclined to run the numbers, I would be most interested in hearing the outcome.
Note: Hat tip to Tom Forenski, who first made mention of this article in his own blog
Note: At the time of this writing I, and/or funds I maintain discretionary control over, maintained long equity positions in MSFT and YHOO. We did not maintain a position, long or short, in TWX, GOOG, VRSN, NWS or SNE. We also may, at times, carry derivative options on underlying positions as a hedge.
lightreading
video sharing
excess capital
content
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web video
youtube
brightcove
google
yahoo
grouper
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videoegg
editgrid
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woodrow
Our money is on Brightcove, since that's what we use for our TasteTV (http://www.TasteTV.com)
Posted by: Kevin | December 07, 2006 at 01:17 PM