4/8/08 - Featured Company: Pluggd
Web Site: www.pluggd.com
Headquarters: Seattle, Washington
Year Founded: 2006
Founders: Alex Castro, CEO; Jonathan Thompson, Chief Architect
Investors: Intel Capital and Draper Fisher Jurvetson
Employees: 13
Total Capital Raised: $6 million
Company News: www.plugged.com/news
*Updated: 4/8/08
By Alex Castro, Founder and CEO
At Pluggd, we are bringing a new slate of products to market this year that we hope will mark significant advances in the way consumers experience web video and in the way that advertisers can monetize that video.
For starters, we have invented technology that allows web users to “search inside” a web video (or audio) file, before consuming the entire file. This allows the consumer to find the section they want, then “surf” directly to that part of the video. In this way, we hope to make video browsing much more like web page browsing.
Our patent-pending “Heat Map” technology is an innovative user interface that guides users to the content topics they wish to see or hear in an audio or video file. The goal is to make multimedia search as easy and intuitive as general web search.
When a user clicks “play” on an audio or video file, Pluggd processes the file through our Content Publishing system, which essentially generates a transcript of the words and associated topics that are present in the file. When a user enters a keyword search term, the query flows through our Transcript and Concept databases, generating a color-coded heat-map. The heat-map shows relevancy of sections of the file to the search term. Red indicates a direct match, orange a near-match, and blue a non-match. Intuitively, a user can advance the “scrubber bar” to the part of the file that he or she wishes to see (or hear). The system works for files of any length, enabling a new kind of viewing experience that puts the navigation of the video or audio file directly into the hands of a user who can browse according to their interest in topics they choose.
Not so long ago, popular video was the exclusive province of movies and television. These programs were characterized by the following:
*High cost of production
*Established channels of distribution
*Monetization through direct purchase or attached advertising
Let’s take the popular situation comedy, “Everybody Loves Raymond,” as an example of the realities of video production by Old Media. Each episode cost over five million dollars to produce. The network, CBS, ordered 26 episodes for a standard season. The program ran for nine seasons. The high cost of production reflected the considerable talent of the writers, actors and unionized production crew of a hit show, which could only have been brought to life under a mature television production system.
Every year, the networks sell “Upfronts” for their advertising inventory for their slate of shows, based on aggregated projections of total audience. For an established show like “Raymond,” with a proven audience track record, the network could garner a sizeable up front commitment from sponsors who desired to associate their products with the popular sitcom. However, with a production cost of over $100 million per year, CBS couldn’t recoup the annual cost of the show for any given season. CBS was banking that the program would generate enough episodes—usually 100—to go into the syndication market, where the shows could be packaged to independent television stations and foreign television broadcasters. With the birth of DVD collections, another revenue stream was born that proved to be a huge boon to the owners of television programming.
This system was characterized by high risk associated with high production costs and enabled by mature distribution channels which also had very high barriers to entry—after all, not many video producers can get programs distributed on broadcast television. In such a universe, copy protection was essential, because piracy threatened the consumer market for shows that were distributed in relatively fixed distribution windows—such as Monday nights on one TV network.
Motion picture production parallels the TV industry with respect to very high production costs and monetization through traditional distribution channels, ranging from movie theatres, to TV, to home video rental, to DVD.
In the last five years, the explosion of web video has considerably changed the calculus of Old Media. The following new realities characterize new video production:
*Low cost of production
*Very low barrier of entry to mass distribution
*Unclear and shifting methods of monetization
Pluggd is one of many companies participating in the New Video ecosystem. At Pluggd, we recognize that there is a prominent place for Old Media in the new distribution channels, such as YouTube, MySpace, Atom Films, and other popular sites where people can sample video. Traditional media companies have recently launched new sites for direct distribution of their prime time video to consumers, breaking the old taboos about “competing” with the old broadcast TV model.
We also see new forms of programming emerging on the horizon. Much of the new video content will be user generated, but an increasing amount will be produced by independent film and TV makers, who employ low-cost digital production techniques to make very compelling shows.
Digital formats distributed on the web don’t have to fit into 30 minute or 60 minute time slots, and as a consequence we predict that new program length productions will be invented to serve niche markets: The Lunch Break market; the Share with Friends on a Cell Phone Market; the Kill Time in an Airport Market, to name a few of the many possibilities.
But with these new types of programs, the old realities persist: Covering the cost of production and giving advertisers reliable ways to reach their audiences and measure the results. Inventive companies will address and solve these problems over the coming years. To be specific, we anticipate breakthroughs in the following areas:
* Allowing users to discover specific video and audio files they wish to find across the web
* Surf inside video and audio programs for the exact content they want
* Image recognition within video
* Serving ads that are contextual and inviting to consumers
* Reporting results to advertisers about consumption of their ads in meticulous detail
* Greatly reducing network latency and other hosting issues for video files
Pluggd will do our part to make progress in these areas and create a vibrant economy for web video. In the United States, now ranked thirteenth in bandwidth per capita in the world, the federal government should make new investments for high speed Internet access for everyone, which would stimulate the creation of new products.
So, hold onto your hats as new kinds of programming—news, popular culture and user-generated—continue to rapidly evolve, spurred by the many inventive people working in the web industry and by the hundreds of millions of web users who want to experience video in new ways.
What do you think about Pluggd? Leave your comments below. Feedback about StartUp Beat?—email us at editor@startupbeat.com
