According to a February 2009 ComScore report, millions of consumers have begun watching short video clips frequently throughout the day. Over 75 percent of the US Internet audience, or more than 145 million people, view videos online. Further, the average online viewer watches 312 minutes (5.2 hours) of video per month, that in segments of three clips per day, which is 30% more than last year. The average duration of an online video is 3.5 minutes. Today’s Deal Radar company, Grab Networks, is turning this shift in viewing habits to its advantage as it grows its on-demand video advertising business.
Founded in 2008, Grab Networks was created from the merger of Anystream, a leading digital media management and production company, and Voxant, a content syndication network. Fred Singer, the founder and CEO, merged the two to monetize premium video at scale through advertising and help advertisers reach their often-elusive demographic targets across distributed sites.
The company focuses on video through both software and media services businesses. The former is a licensed software and SaaS business and earns revenues for content delivery services which Grab Networks resells to its customers; the latter is ad-supported and is focused on the online video advertising market.
One of the solutions that the company offers is Grab MediaOS, a video “operating system”. This hosted system can capture transcoding, indexing, and player tools to create content and contextual metadata and publish video at scale. Further, the solution allows video publishers to stream their video directly onto the sites of syndication partners, with ads and the ability to track everything, and also allows video publishers to stream video from third party sources within your player on your site and let you sell ads against those streams. GrabMediaOS lets publishers index their content automatically and make it searchable by the leading video search web sites.
The company’s clients either have a perpetual license with additional contracts for maintenance or pay recurring license fees that are billed monthly for enterprise software or monthly for hosted services. The pricing for the media services business is a blend of monthly recurring service fees and revenue share on advertising sales (sold on a CPM basis).
The company’s main target segments are media companies such as MTV Networks and CNN that create content and want to make it available on their own properties and for broader syndication; publishers such as Us Weekly that manage tens of thousands of sites, channels, and blogs and want to add video for their viewers; and corporate marketers looking for a brand-safe way to reach valuable demographics across these distributed outlets via advertising. Grab Networks currently has more than 700 customers including CNN, CNET, Disney, ESPN, HBO, NASCAR, NBC, the Weather Channel and other blue-chip media properties. Further, its syndication network (studio.grabnetworks.com) has content from more than 200 partners spanning news and information, entertainment, sports, fashion, business, web TV and more. According to ComScore Video Metrix, in February 2009 Grab Networks was one of the top 30 largest and fastest-growing video networks, with 40 million US video impressions per month, 6 million unique video viewers and 73% video ad view through.
The online video space is growing ever more crowded, and Grab Networks competes with companies such as Critical Media, which focuses on broadcast television; Kaltura, an open source platform; and early player RealNetworks. UK-based peer-to-peer music streaming service Spotify has announced that for the first time it will carry video advertising, for a Sony Pictures film, and could very well expand its video offerings. Microsoft plans to update its MSN online video player to support full-length programming, and the player will likely use a variety of ad formats.
Grab Networks is funded through venture capital. In June, the company raised $12 million in a round of debt and equity funding from existing investors, including Softbank Capital, SCP Capital, Longworth Venture Partners and Court Square Partners. Both Anystream and Voxant had already raised significant amounts of funding prior to the merger. Voxant received $10.5 million in 2006, while Anystream has raised more than $44 million since 2000.
This segment is a part in the series : Deal Radar 2009