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Business Impact

The Video Web

Three startups let users layer new content onto online video.

Today’s Web pages feature streaming media, interactive applications, and forums for social interaction–­content that Dow Jones’s VentureWire, which tracks venture investment, refers to as “information services.” Companies that provide those services have seen increasing funding for years.

But according to Venture­Wire, information services that specialize in entertainment have grown even faster than the sector as a whole, from seven deals worth $42 million in 2002 to 76 deals worth more than half a billion dollars in 2007. Investment in the first half of this year was ahead of even last year’s torrid pace.

This story is part of our November/December 2008 Issue
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In part, that growth reflects the recent explosion of online video, which represents more than just a convenient way to watch the same old TV shows: it also opens up the possibility of interacting with video in fundamentally new ways. That’s the goal of several companies that received funding in the second quarter of 2008, the last for which VentureWire has data.

That’s Entertainment: Number of deals, by quarter

BigStage’s software was originally funded by the CIA, which wanted 3-D computer models of suspects’ faces to match against images in a database. The company’s commercial customers take three digital pictures of themselves and upload them to BigStage’s servers, and in about 50 seconds, they have a digital avatar that they can insert into videos or photos. Users will be able to post the ­videos to their ­Facebook pages or e-mail them to friends; eventually, they should also be able to purchase brand-name virtual accessories for their digital selves.

Product: Digital avatars constructed from still photos

CEO: Phil Ressler

Location: South Pasadena, CA

Funders: Mission Ventures, Selby Venture Partners, Tech Coast Angels

Funding: $2.9 million

URL: www.bigstage.com

Plymedia provides software that lets video producers add content to their ­videos, whether it’s foreign-­language subtitles for viewers abroad, closed captions so users can watch the financial news without disturbing their coworkers, or snarky remarks in thought bubbles above politicians’ heads. One of Plymedia’s more interesting services is TrackIt, which ­analyzes the music in a video, compares it with files in Sony’s Gracenote library of music, identifies the song’s title and the artist’s name, and displays them along with a link that can be clicked to purchase the song as a music file or ring tone.

Product: Interactive content for online videos

CEO: Ben Enosh

Location: Palo Alto, CA

Funders: Elron Electronic Industries, Greylock Partners

Funding: $8.5 million

URL: www.plymedia.com

With Veotag’s software, a video publisher can embed descriptive tags in a video and display the tags next to the video window as a table of contents, so viewers can skip forward or back to the sections they find most interesting. Below the table of contents is a box that displays additional information or links related to each tag. For example, a publisher could add a link to a set of PowerPoint slides to accompany a CEO’s talk about company earnings. The tags provide far more information to search engines than the video’s title alone would, making the video more accessible to the public.

Product: Software to embed tags and other content into video

CEO: Scott Rhodes

Location: New York, NY

Funders: Small Ventures USA

Funding: $2.5 million

URL: www.veotag.com

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