Roku is a video streaming service that may be going public later this year, according to sources with Bloomberg. Roku makes set top boxes that connect TVs to the Internet.
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The Hearst Corporation Posts
Roku is a digital TV entertainment company that has raised $60 million in funding led by Fidelity. Hearst Corporation also participated in this round of funding. Previous investors that participated in this round include BSkyB, News Corporation, and Dish Network. Roku has raised a total of $130 million thus far.
Hearst Corporation, the parent company of publications like Car & Driver, Cosmopolitan, Elle, and Car & Driver, claims to have around 800,000 paying digital subscribers. These numbers were announced in a letter to employees at the company by Hearst President David Carey. This figure includes monthly subscribers across all of their titles on iPads, Nooks, Androids, etc. Mr. Carey claims that this figure is “the highest in the industry.”
Even though the iPad has been around for two years, it has not made much of an impact on the digital magazine market. Digital magazines make up only 1% of the industry circulation total and the publishers know that this could be a problem. This is why Next Issue Media has announced an Android app, which encourages users to read more publications on their tablet. Next Issue is a joint venture between five magazine publishers: Conde Nast, Hearst, Meredeth, News Corp. and Time Inc.
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Hearst Corporation is rumored to be buying digital ad company iCrossing for $375 million. iCrossing would earn additional bonuses if reaching certain targets. “While going through the process of evaluating iCrossing’s position in the market, we have spoken with, and entered into, non-disclosure agreements with many companies,” stated iCrossing spokesperson Dana Mellecker. Hearst is the parent company of 15 newspapers and 14 magazines. [Reuters]
The return on investment made on YouTube’s funding through the acquisition definitely has whetted the appetite of investors. YouTube took in two rounds of funding from Sequoia Capital for a total of $11.5 million. So how come Brightcove, a lesser known Internet TV website is receiving such substantial funding? Brightcove started with $5.5 million and then received $16.2 million. Today, it was announced that Brightcove raised $59.5 million. This comes to a total of $81.2 million of total funding. The investors include Maverick Capital, The New York Times Company, Transcosmos Investments, Accel Partners, Allen & Company, America Online, General Catalyst Partners, The Hearst Corporation, IAC (InterActivCorp), and Brookside Capital.
“We think thereâ€™s a lot of opportunity outside the United States for Internet TV,” stated Adam Berrey, the VP President of Marketing of Brightcove. “We think this market will consolidate. Itâ€™s time for the leaders to emerge. This puts us in a good position.” Berrey didn’t mention what Brightcove is planning on doing for future plans, but according to TechCrunch, Brightcove did acquire metaStories on March 20, 2006. metaStories is a Seattle based company that has the tools that creates Flash content.
“Brightcove’s early success in partnering with media companies that are driving the transition of television and video distribution to the Internet puts the company in the right position as Internet TV takes off on a broader scale,” stated Jamie Kiggen, senior VP President of AllianceBernstein. “We’ve looked at many opportunities in this area and believe that Brightcove is well positioned for success in creating solutions that both media companies and consumers will embrace.”
With this new funding, Brightcove plans on growing the company and to provide Internet TV tools to media creators so that it would help them monetize as well as distribute their own videos. Brightcove is planning on launching ad revenue sharing soon.