Ooyala's Founders: Bismarck Lepe, Bel Lepe and Sean Knapp
There's a decent chance that you watched an Ooyala-powered video lately and didn't know it. But if you've watched an ESPN highlight or a Miramax movie online, a feature on Rolling Stone's site or TV Guide's, and the list goes on, you have been in the ooyala (it means "cradle" in Telugu).
The company has a lot in common with a brand you do know well, Google. They both are headquartered in Mountain View, Calif. They both take web-based video pretty seriously. And they both believe in the power of data. Those are not purely coincidental commonalities. Ooyala's founders, brother Bismarck and Belsasar Lepe and Sean Knapp, all left Google to do the start-up. They were instrumental in developing products such as iGoogle, AdSense and also worked on YouTube before they left to start up their company, which launched five years ago this month. What started as three guys' vision for a better online video experience, has become a 230-employee company with outposts around the world.
It's a little striking how "quiet" Ooyala is compared to its neighbor (they're actually a few miles away). Striking, but not really important. Because the key to Ooyala's success is knowing about you — their clients' video audience, and especially what, when and how often you watch — rather than you knowing about them. They do that by collecting data from 200 million monthly viewers that drive two billion analytic events each day.
"We started with delivering the better user experience for the consumer," says co-founder Bismarck Lepe, president of products, "and, more recently, we're asking how can we increase overall revenue for our clients. And we've invested heavily in analytics, because we knew the world was only going to get more complicated. Consumers are going to have many places where they can consume content and on many devices. For distributors, it's becoming more complicated to answer, 'How are we going to keep consumers engaged?'"
In addressing that question, Ooyala has been in development mode for a new kind of content discovery engine — one that has helped a select group of test brands increase customer engagement by an average of 4X. Today the company announced a new technology that, "uses proprietary algorithms, machine learning and collaborative filtering to deliver the most personalized content recommendations and dynamic programming guides across all screens."
The result is viewers stay longer, or abandon videos less often, and thus are served more advertising. In the end, it intends to serve both Ooyala's clients as well as those clients' audience.
"Video tells a story like no other medium," says ESPN's Joe Alicata, senior director of product development, "and our fans have told us over and over again they want easy access to video content, most importantly highlights. During the last two college football seasons, for example, we've included instant highlight video clips that allow fans to see all big plays within 30 seconds of real time. We also curate those clips into 'Top Play' lists that allow fans to catch up on what they might have missed."
This is where data becomes key. Because in a sea of possibilities for what to watch next, the viewers' proclivity in the past is to bounce around the selections or, worse, just plain bounce. Getting them to stay is all about knowing what they want next.
"Our objective is always to give fans the content they want without them having to work for it," says Alicata, "and in that context, you'll see ESPN.com continue to push video products forward."
And behind that push, quiet as usual, is Ooyala's video platform and its data collection.
Ooyala
Late to market, thankfully
"I like to joke that our big advantage was we were late to market," says Jay Fulcher, who joined Ooyala as president and CEO after roles as CEO of Agile Software and executive vice president of PeopleSoft. "Ooyala's emergence in 2007 was just very well-timed. Standards started to come together. Certain kinds of technology allowed us to do things at scale. Our bent right from day one was all around the importance of big data."
The story of video online is a naturally progressing one. Early companies were simply trying to make it work. For those who can remember life in the age of slow connection speeds and protocols originally built to push text around, the idea that any video online could work now seems miraculous. But as broadband becomes common, and protocols for delivery become more sophisticated, just making it work is no longer enough.
YouTube revolutionized the industry by providing easy access to upload and share videos, but the company now owned by Google has struggled to insert scalable value into its product. The market for online video advertising, the primary revenue stream for YouTube, is still a small fraction of traditional television.
Hulu has made some of the biggest strides in increasing that per-viewer ad rate, what I've referred to in the past as value density. They are among the leaders of time-on-site, which means its audience is sticking around to watch the whole video — anywhere from a clip of a few minutes all the way to watching whole TV episodes and even movies. But Hulu's primary product is repurposed television content, most of which built a brand through traditional channels rather than being online natives.
What Ooyala is after is to infuse that value density into truly digital products, videos intended to find you on your laptop, your tablet, your phone and perhaps even on your TV. And "find you" is, ultimately, an accurate way to put it.
"Instead of linear viewing, it's about one-to-one personalization," says Fulcher. "It's really changing the broadcast dynamic, via the web, from one-to-many to one-to-one."
The next five years
According to Bismarck Lepe, the next five years are about perfecting that new dynamic and executing on the critical need for online video: serious monetization. It can't just come from the audience sticking around longer, although that's the first step.
"In the end run, we want to make sure we're driving not only a better content experience, but also a better ad market experience," Lepe says. "That's not only good for the consumer, but also better serves the advertiser."
Delivering the right mix and kind of advertising to you is what is going to keep the content flowing. But that kind of delivery comes with fundamental changes across several industries. Ad agencies, for instance, are in the process of creating systems that can customize messages which respond to the kind of analytics Ooyala gathers. Once that is in place, your video ads will become as personalized as the entertainment or information you watch.
That matters to a large swath of media. Companies like ESPN are going to do video no matter what, and its drive to deliver it across all platforms makes perfect sense. But what about media that have worked outside of video traditionally? While doing a basic kind of video no longer needs to be expensive, it's still time-consuming, is hard to scale and has to make sense economically.
"Initially, the real focus there is giving them the tools they need to reach a very fragmented audience," Fulcher says. "It's making sure they can get their content to all screens, to reach their audience wherever they are, with content that is smart for each device. After awhile, even those media build the kind of libraries that leads to better content discovery."
So Google's neighbors might be quiet, but they also might be near the frontline of online video's next revolution. If the first was about making video readily available, the next is about making in obviously valuable.
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