Brightcove Bags $59.5 Million

The Internet video distributor Brightcove Inc. has bagged a monster $59.5 million funding round, its third and largest, from investors including The New York Times and several venture capital firms. (See Brightcove Raises $59.5M.)

Along with the Times, Brightcove's new investors include AllianceBernstein , Brookside Capital, Maverick Capital , and Transcosmos. Existing investors Morgan Stanley Venture Partners , AOL/Time Warner Inc. (NYSE: TWX), General Catalyst Partners , and the Hearst Corp. also took part.

The new money brings Brightcove's total funding, so far, to about $81 million. The company says it'll use the funds to form new media partnerships and to build its Internet video distribution network internationally.

Brightcove's main business is providing media companies a ready-made platform over which to publish their video content to sites and blogs all over the Internet, says VP of marketing and strategy Adam Berrey. Some media companies pay Brightcove up front to distribute content already wrapped with ads. Others pay nothing up front and allow Brightcove to sell ads around the video in a revenue-sharing model. (See Brightcove, Warner Partner.)

Brightcove says its distribution platform stands out in a crowded market because it's built to handle professional and commercial-grade video, not the lower-quality, user-made stuff. Brightcove's publisher clients are large news and entertainment corporations, not the guy who drops Mentos into bottles of Coke. (See AOL, Brightcove Launch Services.)

"The Brightcove business model allows you take all that is happening in convergence and the Internet, and puts a real business around it through ads and syndication," says General Catalyst partner David Orfao, whose firm led Brightcove's first funding round four years ago.

Brightcove even offers some of its customers the ability to push content out to TiVo DVRs for viewing on regular TV sets, Berrey says. That feature is still in beta. Brightcove partners with the content delivery network Limelight Networks Inc. (Nasdaq: LLNW) to locate video content nearer the consumer, improving the speed and quality of delivery.

Brightcove says its main competition are the media companies that decide to home-build their video distribution networks. Berrey says Google (Nasdaq: GOOG)'s YouTube also isn't to be ignored, although it focuses on addressing a different consumer market.

— Mark Sullivan, Reporter, Light Reading