Brightcove Acquires Unicorn Media To Improve Video Ad Insertions

Among other hurdles, the limits of multiscreen ad measurement and the spread of ad-blocking technologies have been enough to keep a significant share of TV dollars offline. Addressing both issues, video distribution platform Brightcove has agreed to buy Unicorn Media for $49 million in cash and stock.
Unicorn Media’s cloud-based video ad insertion service, Once, offers an alternative to the video-player-centric approach, which has left so many TV buyers feeling cold, according to Jeff Whatcott, Brightcove’s chief marketing officer.
“Old ad insertion models have been holding back the future of TV,” Whatcott said. “With Unicorn, ads are inserted in the cloud -- before the steam ever gets to the user -- which is similar to how TV ads are served.”
“We’re seeing a surge of interest from broadcasters and TV programmers interested in bringing to market new and existing channels that can reach many platforms. Cloud-based ad serving is making that possible.”
While Unicorn is not the only provider of cloud-based ad insertion technology, Whatcott noted that the company does hold 14 related U.S. patents. Unicorn clients include ESPN, NBC News and The Weather Channel.

In 2013, the online video advertising market represented $10.4 billion U.S. dollars in worldwide spending -- with spending expected to grow to $16.8 billion by 2015 -- according to Accustream Media.
Such growth bodes well for Brightcove, as the company expects fourth-quarter 2013 revenue to be $29.7 million to $30 million -- above prior guidance of $28 million to $28.5 million. The company currently expects fourth-quarter 2013 non-GAAP income from operations to be $1 million to $1.3 million -- above prior guidance of $350,000 to $650,000.
As for 2014, Brightcove expects revenue of $126 million to $130 million, including $8 million to $9 million of contribution from Unicorn Media. Non-GAAP loss from operations is expected to be $9 million to $12 million, which includes a loss attributable to Unicorn Media of $11 million to $12 million.

Per the acquisition, Brightcove plans to market a cloud-based product line dubbed Brightcove Once.
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