Today Cisco announced the acquisition of our portfolio company 1 Mainstream. Congratulations to Rajeev Raman, founder and CEO, and the entire team! Rajeev is 3-time Menlo entrepreneur and this outcome is a testament to Rajeev’s vision and tenacity. It is equally an important signal that the “Over the Top” (OTT) video market is now becoming mainstream.
1 Mainstream is a software product that allows owners of video content to publish and monetize content on any platform, including streaming devices, game consoles, tablets, phones, and connected TVs. Going back to our Series A investment in Roku, we have believed that the broadcast industry is ripe for disruptive change. High bandwidth Internet combined with cloud-hosted video will destroy the value of the old network providers – cable, satellite, and terrestrial broadcasters – and transfer that value, along with ownership of the end customer, to the creators and owners of the content itself. Why is HBO developing so much original content themselves? They understand that the old monthly service charge isn’t going to last.
What hasn’t changed yet is the traditional entertainment industry business model. Network operators have typically owned the end customer. They license content from studios or athletic leagues that produce it, and employ the advertising sales force that monetizes it. But a studio, sports team or TV Series can now connect directly with its fan base. What if they could monetize it as well, or better, than the network? That’s what 1 Mainstream enables. Other companies, like Invidi, have perfected programmatic, targeted TV advertising just like we are used to on web and mobile. The pieces are now in place for consumers to cut their cords. Cisco has long provided networking equipment to the cable and television industry, but now with 1 Mainstream they can offer a new OTT service, shifting power from traditional network owners to technology and content providers.