Will Ooyala Threaten YouTube’s Grip On Video Content?

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Ever watched the latest episode of ESPN SportsCenter online or the latest clips from the NBA Finals? Chances are Ooyala, a video technology company founded by former Google employees, is managing that video stream and other video content for big companies like Miramax and Electronic Arts.

The Ooyala executive team

Now, Ooyala (meaning “cradle” in the South Indian language Telegu) is rolling in dough thanks to a $35 million round in financing by Australian telecommunications giant Telstra. The company hopes to use Ooyala to deliver web content and resell it to other media companies. Overall, the video content provider has raised $79 million with the help of angel investors.

If the amount of money and interest invested in Ooyala increases over time, it could probably become a more serious threat to YouTube, despite the fact that it’s not a place to simply drag and drop your videos. Although many companies use YouTube as a low-cost site to host video content, Ooyala’s approach may be more suitable for businesses, especially those who are looking to trade “analog dollars for digital dimes,” those wanting unique customization through multiple platforms, and those who want to gain a better understanding of their base.

Although paying customers are a hard demographic to attract in this free world of the Internet, Ooyala has courted big names like Miramax and News Corp to use their system; these are companies that have a segment willing to go through paywalls. To that end, other companies will want to learn from the big guys and want a one-stop shop like Ooyala that really know how to monetize content, not just giving out commissions and free space.

What does the interest in Ooyala mean for independent creators? Many small-time artists will want to go beyond YouTube’s basic help and try to make it professionally. As YouTube has to deal with millions of partners and users on a daily basis, artists may feel they are not having their needs met. If they have enough cash in hand, they may not need YouTube for help anymore and may be able to seek help from specialized companies like Ooyala. If more investors step up, Ooyala will more likely have the money to outreach to independents.

Will Ooyala become the next YouTube? It will likely become a major video content provider in its own right like smaller competitors Brightcove, Vimeo and Dailymotion, but its customized approach to businesses and creators will definitely become its selling point.

[Source: Bloomberg]