80% of all internet bandwidth is consumed by video streaming. Today’s consumers of content expect low latency and multi-device playback. Transcoding is the process where videos are formatted to work properly across device ecosystems. This becomes an expensive proposition for content creators. Livepeer is a scalable open video infrastructure that’s built on the blockchain to specifically use excess GPU capacity across nodes to transcode video. By leveraging decentralization, costs are reduced and reliability is improved without the threat of any outages that are associated with dependency on larger infrastructure providers like YouTube, Facebook AWS, etc. The Livepeer network has 70K+ GPUS, enough computing power to encode all video streaming on Twitch, YouTube, and Facebook combined while delivering costs savings of up to 50x.
AlleyWatch caught up with Livepeer CEO Doug Petkanics to learn more about how decentralization of the streaming market will lead to a better experience for all parties, the company’s expansions plans, acquisition strategy, recent round of funding, which brings the total funding raised to $51M, and much, much more…
Who were your investors and how much did you raise?
We raised $20 million in a Series B extension, primarily from financier Alan Howard and VC firm Tiger Global, with participation from existing investors.
Tell us about the product or service that Livepeer offers.
Livepeer is a livestreaming network built on the Ethereum blockchain, targeting the $70 billion video streaming market. Livepeer enables livestreaming innovators across web3, creator economy, media, eCommerce, sports, and entertainment to bring their ideas to market affordably – and to scale them without exorbitant usage fees.
Livepeer’s network already features over 70,000 GPUs, which is enough aggregated power to encode all of the video streaming through Twitch, YouTube, and Facebook combined. To date, Livepeer has streamed tens of millions of minutes, passing a key milestone: a record 2.3 million minutes streamed in a single week, a six-fold increase from the start of 2021.
What inspired the start of Livepeer?
Eric Tan and I founded Livepeer to address a web2 pain point: the centralized gatekeeper. Our previous business was essentially shut down by delays and blocks from Apple and Facebook, which prevented further growth.
From there, we decided to focus our energy only on open ecosystems. That’s how we discovered Ethereum, and began building small projects to understand this emerging technology. That led to identifying the problem that Livepeer solves: the cost of transcoding videos is prohibitively high, stifling innovation for startups while further entrenching bigger players.
How is Livepeer different?
Livepeer offers a scalable open video infrastructure that’s more affordable and reliable than existing solutions. The way it currently works is that live streaming platforms rely on third-party transcoding services that cost up to $3 per hour, per stream. That’s not really a price that scales well for anyone but the largest operations (or those with lots of funding). Not to mention that it’s vulnerable to centralized failures, as we saw with AWS outages last year.
Livepeer offers a new way: leverage a global network of nodes to transcode video, which reduces cost and increases reliability. These nodes are using spare GPU capacity (often from cryptocurrency miners) to provide transcoding services. This adds additional revenue from latent capacity, so it’s unlocking value and more effectively allocates resources.
What market does Livepeer target and how big is it?
80% of web traffic is video. There were over 8 billion minutes streamed across platforms in Q3 2021. And, with people consuming 27% more creator content, that demand continues to increase as more consumers get their entertainment from online video.
What’s your business model?
We work with developers to support their live streaming needs and price based on the desired capabilities, capacity, and throughput. As we further expand our functionality, we’ll begin adding more services around content delivery, AI-driven content moderation, and more. We also hold LPT, the native token of the Livepeer network, which grows in value through increased usage of the network.
We work with developers to support their live streaming needs and price based on the desired capabilities, capacity, and throughput. As we further expand our functionality, we’ll begin adding more services around content delivery, AI-driven content moderation, and more. We also hold LPT, the native token of the Livepeer network, which grows in value through increased usage of the network.
What are your post-COVID office plans?
We’ve always been a mostly remote team with a flexible coworking arrangement.
What was the funding process like?
It was very organic. The impressive strides we made in 2021 gave us momentum and a clear path forward.
What are the biggest challenges that you faced while raising capital?
The main challenge is always maintaining focus on the fundraise while also continuing to operate the business. It’s a juggling act that doesn’t get easier over time!
What factors about your business led your investors to write the check?
We’ve done a lot this year, including making our first acquisition: MistServer, an open-source media toolkit for internet streaming. The acquisition expands our video capabilities deeper into the video tech stack. By combining both open software and disruptive infrastructure, we’re building a high-quality, low-cost alternative to expensive big tech cloud platforms. We’ve got a vision that started from our own experience with centralized gatekeepers and we’re executing on that vision.
We’ve also seen strong organic growth in demand for transcoding, as well as growing awareness of the reliability, value, and efficiency of web3 infrastructure. That’s led to increasing investor interest around all things infrastructure.
We’ve also seen strong organic growth in demand for transcoding, as well as growing awareness of the reliability, value, and efficiency of web3 infrastructure. That’s led to increasing investor interest around all things infrastructure.
What are the milestones you plan to achieve in the next six months?
Our primary focus is the successful rollout of Confluence, our L2 scaling solution that allows us to move transactions off of Ethereum while still benefiting from its security. The migration of the Livepeer Network to Arbitrum will increase the profitability for our community by lowering transaction costs, while also giving us runway to build capacity for future opportunities.
Beyond that, we’re also looking forward to continuing to invest in our community, expanding the web3 ecosystem, and hosting workshops at major ETHGlobal hackathons throughout 2021. There’s so much growth ahead, so we anticipate a busy 6 months as we promote the web3 ecosystem and build our developer community across a variety of events and geographies.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Continue focusing on building a product or services that users want. Showing growing adoption is the most surefire path to being an independent sustainable business, or accessing additional capital to accelerate your growth.
Where do you see the company going now over the near term?
We will continue executing on our vision to become the world’s open video infrastructure. What that looks like is expanding deeper into the video tech stack so that we can further support our clients across all aspects of their video operations.
Furthermore, we’re seeing successful use cases that leverage video built on blockchain technologies, such as video NFTs, metaverse streaming, token-gated streaming for communities and DAOs, and more. We’re excited to support these new video use cases.
What’s your favorite restaurant in the city?
I like the Perelandra market on Remsen St in Brooklyn.
