Brightcove revenue jumps by 41 percent; buys Zencoder

Second-quarter results look strong as did the first, but an acquisition could spell further success for the Boston-based cloud video platform provider.

Brightcove's future is looking bright as its second earnings report as a public company as it continues to narrow its losses and generate vast sums in revenue. 


Its second-quarter results showed a 41 percent growth in revenue to $21.6 million, while its losses narrowed by 38 percent to $4.3 million.

Adding a surprise to the mix, the Boston-based cloud video platform provider said it will acquire cloud-based video encoding firm Zencoder for $30 million. 

Zencoder, founded in 2007 but sparked off to Y Combinator success following a $2 million funding drive, provides cloud-based video encoding services for digital publishing and distribution -- dubbed two-times to ten-times faster than other commercial cloud transcoding services. Its open source HTML5-baesd Video.js player remains a massive success, used on more than 24,000 websites.

Zencoder's pegged 1,000 customers, including TwitVid, PBS, and Posterous, now joins Brightcove's 4,700 customers recorded at the end of Q2 -- more than a 40 percent increase year on year.

On the Brightcove blog, rumors of what happens next were laid out straight. 

"These days, it often seems that acquisitions are good for the merging companies but bad for customers. An acquisition can result in the death of a product, either immediately or over time," it said.

"This is not one of those deals." And there's the collective sigh of relief.

"So if you’re a Zencoder customer, you will see minimal change to your service. The name on your invoice might change, but our APIs, features, pricing, and terms of service will stay the same."

"The Zencoder team is excited to join Brightcove," said Zencoder co-founder and chief executive Jon Dahl in a statement, as Brightcove continues to drive its platform-as-a-service offering.

"Our founding mission was to build the best suite of media processing services in the cloud, with a focus on powerful, API-based tools for developers. Brightcove shares this vision, and by joining forces, we believe that we will be well positioned to accelerate Zencoder's growth."

Brightcove closed up 2.45 percent on the Nasdaq at yesterday's market close. Its market cap currently stands at $410.4 million.