Ooyala Signs Yahoo! Japan In Big Customer Win For The Company

Screen shot 2011-02-22 at 3.36.33 PM Video platform provider Ooyala has announced a new multi-faceted deal with Yahoo! Japan giving Ooyala access to the largest and fastest growing portal in the region as well as the world’s second largest population of Internet users.

Under terms of the multi-year deal, Yahoo! Japan will standardize all of their online properties on Ooyala’s platform for video delivery, subscription and advertising services. Yahoo! Japan will also resell Ooyala’s platform on a white-label basis and provide end-user support for all of the publishers using Ooyala. Financially this is a big deal for Ooyala as they get paid twice by Yahoo! Japan; once from Yahoo!’s own internal use of the Ooyala platform and also every time Yahoo! Japan resells it.

According to Ooyala, Yahoo! Japan serves 40% of all the online video in Japan using Yahoo’s own content delivery network with the average user in Japan watching 12.5 hours of video each month according to comScore. Yahoo! Japan will deploy Ooyala’s platform inside their CDN and while financial terms of the deal were not discussed, Ooyala’s President and CEO Jay Fulcher said that the value of the deal is based on certain thresholds of traffic. While it will take time to get Yahoo! Japan up to scale, I think this deal could bring in a substantial amount of revenue for Ooyala twelve months from now. By substantial I mean multi-millions, especially since Yahoo! Japan’s stream count is in the billions each year. Ooyala also mentioned that they expect to share more major news of this kind in the next couple of weeks.

In the online video platform space, the market is currently dominated by Brightcove, Ooyala and Kaltura in terms of market share. For some time I’ve thought that it would be very hard for any company to really give Brightcove a run for their money, but Ooyala seems to have really picked up a lot of momentum as of late and this deal is probably one of the largest seen in the OVP space. Kaltura has been growing very nicely as well, but they are really a different kind of OVP targeting their open-source platform to a somewhat different segment of the market.

Since all of these companies are private and don’t discuss revenue, it’s really hard to know if any one vendor is truly taking wallet share away from another or if the market is simply growing fast enough that all of them are seeing growth based on new business. One thing that is clear though is that Ooyala is clearly a force to be reckoned with and the competitive landscape for all three of the major OVPs continues to heat up.