BRIGHTCOVE

Business Models for Digital

Economy Case Study Submission

Group 8, Section F
ASHISH (318) | KANIKKA (329) | KESHAV (332) | KRITIKA (333) |
KESHAV SAXENA
PAYAL (342) | VIBHOR (367) |

1
2

CONTENT
1. Describe with examples (at least one) to represent one–sided, two-
sided, three-sided and n-sided platform types. ...................................... 3
2. Compare and justify in line with your reasoning given in question 1
to describe an n-sided platform to find the particular multisidedness of
the brightcove Inc. .................................................................................. 4
3. Give the examples with full justification of companies which are
intermediaries but not MSPs. ................................................................. 4
4. Describe how each of the customer groups of Brightcove interacting
by using the facilities supported by Brightcove. ..................................... 5
5. What kind of approach used by Brightcove to sequence (i.e., which
sides to attract first and then which others in that order) various sides on
the MSP? ................................................................................................ 6
3

1. Describe with examples (at least one) to represent one–sided, two-

sided, three-sided and n-sided platform types.

One Sided Platform: Business models with one direction of revenue generation or monetary flow
and a single direction for product and service refinement are called one sided platforms Activity early
in the value chain are called "upstream activities", whereas "downstream activities" are later parts of
the value chain. The monetary flow in One-Sided Model flows from downstream actors to upstream
actors, whereas digital, physical products and services are refined in the opposite direction. This is
the default traditional business model and value passes from cost to revenue.
Example: Mobile phone operator
In a One-Sided Business Model of mobile operator, users pay for a mobile phone and services often
with a subscription based and utility-based business model. Direct services such as text and video
messages, internet access, are combined with concepts such as being part of an exclusive group or
having constant access to online-platforms, automatic back-up, remote-erase of memory, file-
storage, weather, games, music etc. The user is the sole source of revenues for the mobile phone
operator regardless of the service.
Two Sided Platforms: Business models which facilitate interaction between two customers and
generate revenue from two directions are called two sided platforms. The purpose of double-sided
platform is to facilitate interaction between providers and consumers and provide a trustworthy
platform and charge commission for every transaction. It creates double sided network effect along
with cross side virality.
Example: Uber
In a two-sided platform model of Uber, every side of the market needs other side to succeed. Its two
customers are drivers and travelers who use the mobile app which is a cost saving platform to match
car owners or drivers with travelers. User acquisition and retention is critical for Uber along with
maintaining balance between the two. They also have the advantage of opportunistic price
discrimination as users can’t really track their algorithms and hence minor tweaks. But there are
logistics pain points like in case of any issue customer always blame Uber and not the driver.
Three Sided Platforms: Business models which eliminate logistic pain points and involve 3
customers are three sided platforms; generate revenue from 3 different sides or customers. It
consists of consumers, content providers and advertisers.
Example: Joost
An Internet TV service based on peer to peer file sharing network to distribute content to their Mozilla
based desktop player. It started with an aim to combine best of the Web and best of TV with a focus
on peer to peer distribution to save cost and increase profit. It is a three-sided model with content
owners, advertisers and viewers. So, the free content is supported by advertisers and revenue is
generated from advertisements. This simplifies user experience and gives them control over how
content is shared and operations.
Example: RealReal
This is a consignment marketplace for luxury goods, and is an example of three-sided platform model.
They require sellers first to send their products to a centralized warehouse where the company
performs a rigorous authentication process to eliminate counterfeit items, uniformly photograph the
4

items, and then resell them to eliminate all the hassles for sellers of high-end merchandise as well as
ensure seamless and trustworthy experience for buyers.
N-sided Platforms: Business models with many markets and cross-group network externalities are
called n-sided or multi-sided markets. These platforms operate like intermediaries and enable
multiple groups of customers to interact with each other where members of each group benefit from
interacting with those on other sides of the market. They connect two or more interdependent groups
and play a matchmaking role. It tries to achieve network effect and more the number and types of
users the better it is. As the value increases, they attract more customers and users from one side
lead to more users on the same side joining the platform.
Example: Revver
It is a video sharing website that hosted user generated content called makers. Advertising was
attached to user-submitted video clips and originally offered to share ad revenue with the video
creators. It aims at providing free content to watchers and shares advertising revenue with content
creators and syndication partners. This is a four-sided model with content owners, watchers, sharers
and sponsors as customers.

2. Compare and justify in line with your reasoning given in question 1 to

describe an n-sided platform to find the particular multisidedness of
the brightcove Inc.
A
It has been described in the previous question; the n-sided firms are established by how many
consumer groups are connected by it. Such type of organizations has the following features:
It serves more than one or multiple groups of customers.
The relation between these kinds of customer groups forms direct and indirect network effects.
Each of these connects with the platform. "Affiliation" implies that clients on each side have made a
few investments that are required to get to the platform and source income through it.
Brightcove has four participants in its business model, which are the Consumers, Publishers,
Affiliates, and Advertisers.
From the network diagram illustrated in the Brightcove Inc case, it can be concluded that,
1. There is immediate cooperation between certain sides. (Eg, Affiliates and Publishers)
2. BC is the third party among them, which facilitates all transactions.
Hence Brightcove is a four-sided platform

3. Give the examples with full justification of companies which are

intermediaries but not MSPs.
Intermediaries put buyers and sellers together without taking ownership of the product, service or
property. They act as go-betweens. They are not wholesalers or distributors, which buy products
and then resell them. They are usually paid on a percentage of the total transaction.
Andrei Hagui of M.I.T. states that MSP’s are “technologies, services, or products that add value
primarily by enabling direct interactions between two or more participating parties”. Essentially, they
serve two or more customer bases and facilitate transactions between the participating parties.
5

S No. Logo Name Reason

1. Swiggy Swiggy is a
platform where
they collect orders
from customers
and delivers, they
are only into being
intermediary
2. Redbus Similar to Swiggy,
RedBus also
facilitates the ticket
between
customers and
travel companies.
3. Gestifute This is a sports
player advisory
firm where they
represent different
players. They also
facilitate trade
between two clubs
also.
4. Capital Group They are am
Companies example of
financial
intermediary which
provides a middle
place for investors
and loan taken.

4. Describe how each of the customer groups of Brightcove interacting

by using the facilities supported by Brightcove.
Platform Portion (Early stage business)
Publishers (Content owners): Two groups of customers – long tail publishers which were small scale
niche owners who required an inexpensive and all-inclusive internet TV solution, and large media
companies which required high touch service and full control over use and branding. These
publishers could upload their content (videos), encode them in the Flash format if required and share
the content with one of more players. Brightcove handled broadband delivery and content hosting
through its platform for which it charged fee.
Network Portion: Groups were divided into four and revenue model was designed such that
Brightcove could leverage integration of different network users i.e. it could earn more revenue by
helping one group interact with the other.
Publishers: There were three types of accounts made available subject to usage of software platform
and control over content distribution and monetization by publishers:
6

Premium: Large media companies (discussed above) who had access to the full platform and
network (all three discussed below). Fees was charged on five-tier rate system that incorporated
platform charges and CDN charges on peer-stream basis.
Standard: Small and medium organizations needing access to platform with limitations and to some
part of network of advertisers and affiliates. Tiered fee charged based on use with publishers having
the option to pay via a credit card.
Brightcove Network: Independent small and medium publishers that sought to create their
broadband video channels. No fee charged. More of a barter system where content rights given to
Brightcove in exchange of platform services but access was made possible through invitation only.
The remaining three can be accounted as part of customer groups as these players were given
access to content or other players serviced by Brightcove and the interaction by each was done
differently with Brightcove:
Advertisers: Quality ad-serving technology helped placement of ads across Brightcove AdNet.
Advertisement placement was not provided on the basis of channels but on the basis of genres
targeted by the advertiser. Advertising slots were made available on the Brightcove network from
publisher sites to affiliates to Brightcove’s web platform – Brightcove.com.
Affiliates: These groups offered availability of their websites for posting of broadband content on
Brightcove’s platform. Foremost though the content owners were required to highlight whether they
would want to make their content available for syndication. The owners who agreed appeared on
the ‘Syndication Marketplace’ which was made accessible to affiliates (third party websites) through
Brightcove’s destination website. Affiliates could look at various offers on this site and apply
accordingly to content owners (players) while the terms of agreement or denial vested with the
content owners.
Consumers: The idea behind relaunching the website was to make the platform accessible to end
users or consumers of the online content. Features such as classification of genres and
recommendations based on search and browse behavior were incorporated. Brightcove was trying
to aggregate consumers and build a base for publishers and advertisers to come on-board.

5. What kind of approach used by Brightcove to sequence (i.e., which

sides to attract first and then which others in that order) various sides
on the MSP?

The team of Brightcove had decided on a sequence in which they were to roll out their business. On
the overall level, a differentiation was made between the platform portion of the business and the
network portion. The platform portion consisted of the technology offering for content owners, while
network portion of the business comprised of offerings that include destination sites, affiliate network
and advertising network. Recognizing the difficulty in building a single comprehensive solution up-
front, the team decided to first focus on building the publishing platform and bringing publishers on-
board. Once the publishers are on-board, the company could leverage them to attract consumer and
advertiser attention, which in turn would lead to creation of a compelling marketplace, allowing those
publishers to promote their content on the platform.