Brightcove Branches into U.K., Aims to Cash in on Growing Ad Market

Online ad spending in the U.K. accounts for almost double the portion of overall ad revenues there that it does in the U.S., and online video platform provider Brightcove wants in on the British market. Today the firm is officially unveiling its London digs, and also has extended deals into the U.K. with a handful of existing clients, including Hachette Filipacchi, BET Networks and Sony BMG.

The opening of the London outpost follows a hefty funding round of nearly $60 million in January from the likes of The New York Times Company, The Hearst Corporation and IAC/InterActiveCorp.

“One of the primary objectives of that financing was international expansion,” said Brightcove VP, Marketing and Strategy Adam Berrey.

According to the Interactive Advertising Bureau Europe, the £2 billion ($4 billion) spent on online ads in 2006 in the U.K. accounted for 11.4 percent of overall U.K. ad spending. In comparison, the $16.8 billion spent on Web ads in the U.S. in 2006 comprised 5.9 percent of all ad dollars, according to the IAB. In addition, at over 39 percent of the European market, the U.K.’s take of online ad spending is the largest in the continent.

Media consultancy Screen Digest pegged the U.K. online TV market at £19.6 million ($39.8 million) in 2006, and estimates it will reach £144.9 million ($295 million) in 2011, with 47 percent of those dollars coming from ads.

In addition to the language factor, Brightcove chose Britain as its first overseas market because, according to Berrey, “U.K. media companies have a global presence…. They have a very strong interactive advertising business.”

The three-year-old firm had ready-made contacts in Britain through two execs with U.K. ties. VP, Business Development and Strategy Elisabeth Bentel Carpenter worked for several years at News Corporation, directing British Sky Broadcasting’s broadband operations, and guiding the launch of Sky Digital. VP, Content Partnerships and International Development Tony Dunaif also had U.K. connections that facilitated Brightcove’s launch into the market.

Current U.S. client BET is launching its first European broadband efforts using Brightcove. The black entertainment and culture media firm plans to distribute its ad-supported entertainment, lifestyle, fashion, music and celebrity programming to British audiences through a new video site, BETonBlast.co.uk, set to launch later this summer. BET will also allow users to share and embed BET video using the Brightcove technology.

Hachette Filipacchi, another U.S. client, has released its first ad-supported online video extension on ELLEUK.com, a component of ELLE Magazine, using the video platform. Content includes video clips on beauty, travel and fashion. The publisher plans to add to its video channel offerings, and will feature content on Brightcove.com. Sony BMG UK, whose U.S. arm already works with Brightcove, is also using the platform to serve up video on sites dedicated to its music labels, which include RCA Records and Epic; the company puts out music from artists such as Beyonce and Tenacious D.

Some U.K.-based media firms have signed with Brightcove, including IPC Media, publisher of consumer magazines like Marie Claire, NME and Country Life. British magazine publisher Emap also has begun running pre-roll ad-supported videos via the platform on HeatWorld.com, the Web site for its gossip tabloid Heat.

Another British client, Simply Media, uses the video platform; its property the Baby Channel features baby and parenting-related clips sponsored by advertisers like Tumble Tots, which currently is running a pre-roll spot alongside a floating display unit linking to its site. “Simply Media are really taking great advantage of some of our more advanced formats,” said Berrey. The media firm also distributes its content through Brightcove’s network.

Despite inroads it’s made into Britain, the company does have its work cut out for it in the decidedly smaller market. U.K. competitor Narrowstep just signed Virgin Media as a client in April.

But Brightcove has its sights set beyond Brittania, said Berrey. “We’re definitely looking at continuing the expansion in Europe,” he said, adding, ‘I think Japan is going to be important for us as well.”