“It’s hard for a B2B company to get media coverage,” says Stefan Lederer, the 27-year-old CEO of Klagenfurt-based bitmovin. Perhaps this is because descriptions of highly technical software tend to baffle the average reader. But the specialised trade press has certainly taken notice: Streamingmedia.com listed bitmovin as one of the Top 100 companies that matter most in online video, among such big players like Apple, Adobe, Cisco, DivX, Google, Microsoft, and Sony – “the youngest company on the list!” according to bitmovin’s website.
So the challenge, dear reader, is how to describe the products and services bitmovin provides without making your eyes glaze over. So here it goes, for you, Dad, and all you other techno-illiterates out there: bitmovin enables online-content providers to quickly and efficiently convert and stream video content for display on various end-user platforms and devices, and adapts the video stream to whatever network conditions are available (even if the bandwidth is constantly changing).
Maybe I should let Stefan Lederer explain. “We take care of the transcoding and streaming of our customer’s content via our web portal, as well as our API, and we also provide them with our players, which are the best way to display that content on all possible devices, so that the customer can focus on their core business, creating content, marketing, generating revenues, acquiring customers, and not on the background technical issues and acquiring their own IT infrastructure.”
From Klagenfurt to Hollywood
Christian Timmerer (CIO), Christopher Mueller (CTO) and Stefan Lederer (CEO); Photo credit: bitmovin
Lederer, was still a teenage hacker studying computer-science back when Dr. Christian Timmerer began his MPEG video technology research at the University of Klagenfurt (Carinthia, Austria). In 2009, Timmerer was searching for motivated PhD candidates to work with him. He chose Lederer and his fellow student, Christopher Müller, and sponsored both of them for internships at Dolby Labs (famous for its audio technology, but also a video-tech innovator) in Los Angeles, California.
“We worked directly in Burbank, where all the movie studios are located,” remembers Lederer, who likely spent more time with other computer scientists rather than rubbing elbows with Hollywood stars. “It was a cutting-edge group that was working on the newest standards and we did some cool things there. It showed us how we could make a business from video technology.”
Getting the world onboard
By 2010, the three Austrian men were doing pioneering research on MPEG-DASH, a new technology standard for video streaming. Their American experience taught them that it’s not enough to be great engineers, but you also have to try out new things and, more importantly, get the world onboard with your idea.
According to Lederer, “usually, the outcome of research is a published paper, but the community has no chance to reproduce the results”. However, they created an open-source website for sharing their findings free of charge. “That was the source of our success,” believes Lederer, “we got a lot of positive feedback from the industry worldwide and that was the basis for founding the company.”
MPEG-DASH was quickly ratified as an ISO standard in 2012, the same year that Lederer, Timmerer and Müller cofounded bitmovin. They received important support from Build!, Carinthia’s AplusB (Academia plus Business) incubator, where they opened their first office. While developing various implementations of the technology, they simultaneously did a lot of Intellectual Property Rights work and filed for patents.
“We liked that, because it’s really tough to do.”
The biggest challenge for the team was the transition between the technology tool and a real product. “We started with good solutions and tools for transcoding and playback, but the biggest step was forming this into an easy-to-understand product for the market,” says Lederer. Simultaneously, they did a lot of Intellectual Property Rights work and filed for patents on various implementations of the technology.
Further funding came from the Carinthian Economic Promotion Fund (KWF) for one such implementation project: DashCar. A moving car is perhaps the most extreme test case for DASH technology, which aims to provide quality video streaming that adapts to changing bandwidths and content types. With DashCar, “your kids in the backseat can watch a live stream or on-demand video and the quality adapts to the situation, whether you’re driving through the woods or in the city,” claims Lederer. “We liked that, because it’s really tough to do.” Though the project lead to some conversations with the auto industry, Lederer thinks of it as a long-shot project, “more of a hobby of ours. Now we try to focus on what we do best. It’s great to test ourselves in tough environments and apply our findings to our core product”.
Upload video content to the cloud with bitcodin; Photo credit: bitmovin
The core product he speaks of, the bitdash player, was officially released in 2014. “We may not yet be interesting for the big gorillas like Netflix and YouTube,” says Lederer, “but we can enable the other content providers to offer the same or even better quality as they do”. Both of those big gorillas have already adopted the DASH standard, which accounts for more than 50 per cent of all traffic on the internet, “and now the rest has to adapt,” demands Lederer.
The companion product to bitdash is a cloud-based Software-as-a-Service solution called bitcodin, which is currently in a beta phase with selected customers. Bitcodin allows a content provider to easily upload video content to bitmovin’s cloud service, where it is quickly prepared (“transcoded”) for delivery to multiple platforms and devices.
While bitmovin’s success is certainly due to its team’s technical abilities, it didn’t hurt that Lederer had a double major in Business Administration as well as Computer Science from the Alpen-Adria University in Klagenfurt. After its founding in 2012, the young company generated cash flow by doing contract work in the media realm. To scale up in 2013 and 2014, they received funding from the KWF, AWS (Austria’s federal promotional bank) and FFG (Austrian Research Promotion Agency).
Lederer admits that “nothing would have been possible without the public-sector grants,” which also helped to leverage their first round of private investment, even though they weren’t proactively looking for one. Ironically, it was bitmovin’s participation at a Silicon Valley conference that got them noticed by the Austrian venture fund SpeedInvest, who together with the institutional investor Constantia Industries invested a seven-figure amount in August 2014. “It gives us the freedom to scale up our team to 14 people and keep it going for the next years and to focus on our core business,” says Lederer. The three cofounders still hold the majority share of the company and so retain the ability to do additional investment rounds.
Gearing up for global scale
Being part of the SpeedInvest portfolio also includes sales and networking assistance from their team in Silicon Valley. According to Lederer, “this is really efficient, and helps us to getin contact with U.S. customers, arrange meetings, etc”. It also allows bitmovin to display a Silicon Valley address proudly on their website. “We don’t yet have a U.S. subsidiary. At the moment we have as much work as we can handle from our European business, but we have really good traction in the US and are present at fairs such as CES and NAB in Las Vegas. So it might only be a matter of time before we expand.”
Lederer expects bitmovin to break even within the next two years, but what’s the ultimate goal for bitmovin? “We want to build up the company in a way that it can easily operate on its own, providing the best products in the industry. We don’t know yet if we will gofor an exit in the future; all options are open. In our business – online media technology – a lot of our competitors are no older than ten years, so it’s a highly dynamic market. Market shares change from year to year, so we have a good chance of becoming one of the big players on the market.”
This story is brought to you in partnership with AplusB, a programme funded by FFG.