Online content consumption has doubled since the start of COVID from 3 hours and 17 minutes to just under 7 hours a day according to DoubleVerify. Online video consumption is said to have quadrupled. JW Player is a leading video infrastructure software platform that allows content producers to control, manage, and measure their mobile, OTT, and web video applications. The player is also now equipped with monetization options for video publishers that are coupled with the company’s data analytics that offers advertisers precision targeting options.
AlleyWatch caught up with CEO and Cofounder Dave Otten to learn more about how the company has evolved from an open-source solution that was used to power the initial YouTube platform, the company’s strategic plans, latest round of funding, which brings the total funding raised to $145.7M, and much, much more.
Who were your investors and how much did you raise?
$100M in Series E funding from LLR Partners.
Tell us about the product or service that JW Player offers.
JW Player is the largest source of video plays on the internet outside of the walled gardens. Each month, 1 billion viewers, or one-third of all people on the Internet, consume video on JW Player’s technology across 2.7 billion unique devices. This creates a vast trove of data and insights that we can provide to customers to optimize the reach and engagement of their videos. For example, our article matching feature uses AI to automatically place videos from the publishers’ inventory that are related to the content of the surrounding article, while the recommendation engine keeps audiences engaged with new videos related to the videos they’ve already seen.
JW Player also has robust monetization features to maximize revenue from videos. Part of this has to do with contextual targeting, or the practice of targeting ads based on the content of the video it plays on, rather than the user watching the video. While most contextual targeting solutions provide only page-level targeting, JW Player uses AI and natural language processing to precisely categorize the content of the video itself. This allows publishers to monetize more of their videos that would otherwise be excluded from advertisers’ campaigns. JW Player also provides advertisers with real-time viewability signals, rather than historical signals, which means advertisers can place videos on relevant videos as consumers are watching them in real-time. This also opens up more of publishers’ inventory that would be excluded using historical viewability data, generating additional revenue.
What market does JW Player target and how big is it?
JW Player serves the traditional media market of digital publishers and broadcasters, but also a wider market of non-media enterprises using video online in verticals such as faith, fitness, e-learning, e-commerce, and sports. It also serves ad buyers looking to place ads on the videos playing on over 12,000 sites using JW Player’s video platform. There is a massive opportunity in the market, on target to grow from $14B today to $50B by 2027 as more companies join in the digital video economy and consumers come to expect video in their online interactions with brands.
What’s your business model?
JW Player has a SaaS business model. Customers sign up to use the JW Player video platform to play videos on their website and leverage the analytics and monetization features to optimize the videos for engagement and revenue. JW Player’s services include video hosting and live streaming, OTT apps, content protection services, advertising, and analytics which widens our customer choices for products that improve their video experience.
What was the funding process like?
Fundraising processes are always intense, no matter the size of the round. And our Series E was no different. However, what made this process different is that both JW Player and LLR shared a very similar vision around market opportunity. This was clear during our initial meeting and really set a positive tone for the entire diligence process. From our perspective, you could not ask for anything more than that.
What factors about your business led your investors to write the check?
According to David Reuter, Partner at LLR Partners, “JW Player has been at the forefront of digital video innovation ever since founder Jeroen Wijering created YouTube’s original video player in 2008. Today, the company offers the most comprehensive technology, advertising, and data analytics platform in the digital video ecosystem. We look forward to partnering with the JW Player team as they expand their platform and continue to elevate the way brands can host, stream and monetize video.”
What are the milestones you plan to achieve in the next six months?
In the past year, JW Player’s revenue growth has accelerated as it maintained profitability. Over the next several months, you’ll see us continue to invest in and strengthen our video software and data insights platform as we meet the ever-increasing demands of the Digital Video Economy. The pandemic gave us a deeper entree into customer types such as e-learning, fitness, sports, e-commerce, and marketing organizations and you can expect growth to continue with these customer types, especially in the APAC and LATAM regions. By the end of 2021 our goal is to be a ‘Rule of 35%’ company or better (revenue growth % + EBITDA margin % = > 35%), with a view to reach ‘Rule of 40’ (a proxy for world-class SaaS companies) shortly thereafter.
In the past year, JW Player’s revenue growth has accelerated as it maintained profitability. Over the next several months, you’ll see us continue to invest in and strengthen our video software and data insights platform as we meet the ever-increasing demands of the Digital Video Economy. The pandemic gave us a deeper entree into customer types such as e-learning, fitness, sports, e-commerce, and marketing organizations and you can expect growth to continue with these customer types, especially in the APAC and LATAM regions. By the end of 2021 our goal is to be a ‘Rule of 35%’ company or better (revenue growth % + EBITDA margin % = > 35%), with a view to reach ‘Rule of 40’ (a proxy for world-class SaaS companies) shortly thereafter.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Cash is king. So my advice would be to manage your expenses in a manner that is consistent with your cash holdings. Making sure you have the cash runway to pivot as necessary, especially when you are in the startup phase, is crucial.
What’s your favorite outdoor dining restaurant in NYC
If it’s NYC, it has to be pizza. And if it’s pizza it has to be John’s of Bleeker.
