A couple of days ago, I posted the first part in the “20 Questions with Dr. Dre(y)” series.
Something Kris said caught my attention, and this second question is directed at that.
#2. Very interesting point, re: “Platforms are beginning to narrow their focus on core competencies”.
As we see the emergence of more end-to-end platforms, where would that leave pure-play offerings like Tube Mogul (syndication only) and Encoding.com (encoding only)?
The way I see it, both form a piece of a bigger puzzle, and if there are vendors emerging that not only solve that larger puzzle, but also focus on specific core competencies, then it’s probably not going to be very good news for the other pure-play folks.
What’s your take on this?
I see the pure plays as a very distinct piece of the OVP puzzle, some having come directly from the platform world.
Encoding.com was once an OVP until they changed their business model one year ago this month.
VideoEgg changed gears back in 2007 from being an online video platform to that of online “engagement advertising” development.
The pure-plays have a very significant role in the big picture, focusing their time on a specific function which adds value to everyone in the form of third-party relationships.
As mentioned in question 1, the partner programs include these pure plays which save the top-to-bottom platform providers time and money offering win/win relationships as add-ons for the end customer.
Yes, and No.
These pure plays *could* save top > bottom providers time and money if they were able to offer easy hooks into their service that make a particular task(for example..video encoding) economical.
Most of them have an API that can facilitate the hook, but very few of them offer clear economic value in deviating from an on-premise solution.
Case in point, Marcellus uses the Amazon Cloud for video encoding, storage, and delivery. Not only does Amazon provide a seriously awesome API for us to be able to pull that off, they also offer a usage-based model starting at pennies, which makes adoption/integration a no-brainer.
On the other hand, we have a company like Encoding.com. It’s a great service that seems like a clear complement to our offering..on paper. We were even considering leveraging their API to off-load our video encoding. But the economics simply didn’t make sense to us, and we ended up building up our own encoding engine.
In theory, it’s all a nice value-chain. But in reality, there’s very little opportunity for forging fast, on-demand relationships. Which is why I feel like the pure play service providers need to start thinking about interoperability from an economic standpoint…moving beyond simply providing an API.