Brightcove Case

What are the strengths and weaknesses of Brightcove’s business model?

Strengths:

Integrated model with four components - four sides are publishers, advertisers, affiliates, and consumers (multi-sided network).

Multiple Potential revenue sources - Advertising, platform operations, content licensing and distribution, etc.

Syndicated Marketplace - gives the potential to make money at the Brightcove site and any other sites with Brightcove-enabled video content. This strategy helps hurdle the networking effects in an attempt to gain a wider acceptance, similar to a licensing strategy.

Market Niche directed towards providing a solution for content providers. By offering content providers a total package for offering online video, Brightcove has positioned itself in a unique way.

Potential first-mover advantage - Brightcove has begun to service a market that is subject to winner-take-all. If it can become fully operational, it may be able to leverage its first-mover advantage to help place it as a top contender for the market and potentially as the winner in the future.

Weaknesses:

Low-barriers to entry - Providing a platform for “internet tv” is easy and fairly inexpensive. This leads to increased competition, which in turn leads to lower profitability.
Competitors - Several strong competitors exist in the marketplace (Google, YouTube, Amazon, Yahoo, www.revver.com, www.roo.com, etc.)

Massive Amount of Resources - The business model requires a large amount of resources (time, money, skilled employees, etc.) in order to build the complete business.

Complex business model - The business model is made up of many moving parts (multi-sided) and needs all parts in order to function (network must be adopted by all parties involved).

Subject to the “Penguin Effect” - have to get all four parties involved, nobody will join without the others. Who will join first?

Difficult to implement - It is difficult to implement portions of the business model in phases; essentially, it must all be done at once (an all-or-none strategy).