Ensequence Raises $40 Million in Series C Funding Round

--Ensequence's Aslam Khader Discusses the New Funding with [itvt]
--Ensequence Launches New Version of MLB.TV Mosaic Service
--Company also Enters Blu-ray Authoring Space

Portland, Oregon-based interactive TV authoring solutions provider, Ensequence, last week announced that it had raised $40 million in a Series C funding round (note: the funding is from an undisclosed private investment company). The company, which has raised a total of $87 million to date, says that it will use the new funding to continue its international expansion, open new offices in Los Angeles and New York, continue deployments with cable and satellite operators, bring the next generation of its flagship on-Q software suite to market, and expand its presence in the broadband and mobile video spaces. Ensequence launched the on-Q software suite around five years ago: its customers include such companies as Disney, Major League Baseball Advanced Media, MTV, Nickelodeon, QVC UK, and TV Guide. According to the company, the software allows programmers and advertisers to quickly and cost-effectively enhance their video with interactivity, and then distribute their interactive video across TV's, PC's and mobile devices.

[itvt] recently caught up with Ensequence's VP of marketing and strategy, Aslam Khader, and we asked him to elaborate on the company's expansion plans: "We plan to open up our New York office later this quarter, and our LA office soon after that," he explained. "We expect to grow internationally in Europe later this year: we haven't yet decided where in continental Europe we are going to establish a presence, so, for the time being, we will use our London office as a jump-off point. However, we are definitely making inroads into the Italian, German and French markets--so, regardless of which European country we end up in, we'll definitely be expanding into that market. We also expect that, towards the end of this year or early next year, we'll have some selective expansion into Asia as well." Khader also told us that Ensequence is planning a significant expansion of its employee base: "We currently have around 75 employees worldwide," he said, "and our expectation is that we'll grow that number by about 40% this year. So we'll go from 75 to 105 or 110--something in that range. I think our hiring efforts will be more skewed towards sales and marketing and business development, but we'll definitely also be hiring engineers. As a company, we've always been very focused on the engineering side, and we'll definitely need to expand our engineering department to address these other platforms and devices we're interested in providing technologies for."

[itvt] asked Khader about Ensequence's plans to address non-traditional TV platforms: "We plan to complete the work that we've started doing to address the broadband marketplace, and we'll be continuing our efforts to expand into the mobile space," he explained. "We plan to make our tools more comprehensive, in terms of what they can do, and to improve how efficiently and effectively they can produce. We'll also be looking at opportunities around some specific applications as well. We have a services group today, and we plan to expand that--but that expansion will be fueled by customer projects. The largest part of our focus will continue to be on our tools, which span authoring, playout integration, and response integration. We're not currently focused on developing our own end-user and direct-to-consumer services," he added.

According to Khader, the conditions are now in place for major growth in the interactive multiplatform TV industry: "Right now, we are seeing all the market elements aligning to really make a very significant business out of what we do," he said. "The rapid proliferation of commercial video to non-television platforms that's going on right now is doing two things: first, it is opening up opportunities for real revenue. It's no longer about creating a company with 5 million users sharing videoclips and hoping that you can then sell it to somebody. There's a real opportunity for us to help our customers leverage all these new platforms and devices to produce, aggregate and distribute interactive entertainment and advertising content, and that should allow us to achieve profitability sooner. Secondly," he continued, "a side-effect of this ongoing proliferation is that it is causing the established TV players to say, 'We'd better do something to ensure that we continue to be people's core entertainment platform. Which means that we need to embrace these new interactive technologies more, because it's now being proven that consumers like to interact and like it when you give them enhanced and immersive entertainment experiences.' So we are also seeing an accelerated deployment of interactive services on traditional TV platforms."

[itvt] asked Khader to prioritize the various platforms that Ensequence's technologies address, in terms of their long-term importance for the company: "It's very important for us to address the existing television audience," he said, "so cable and satellite for now remain our highest priority, because that is where the mass audience still is. There are close to 60 million digital households in the US, between cable and satellite, and there's a good chance that the majority of those digital homes will have interactive TV capabilities before long. So that's an absolute focus for us. The Internet is also an important platform for us, because there is so much rapid innovation on that platform: the possibility of Internet TV becoming big is pretty high. However, there is still a lot of uncertainty and experimentation, in terms of which business models will play out in that space, how much premium content will be consumed, and whether a high-quality experience can be delivered--so there's still the question of whether I will really be watching Discovery in HD online, or I will instead continue to watch it on traditional TV. Nevertheless, we see the Internet platform, and related devices, as a very important area for us. And then there's also the mobile platform. The reason I put the mobile platform third is because it has some limitations in terms of technology and screen real estate and what you can do with it. However, there are some opportunities for it in some niche areas that I think are pretty useful. Then, there are also things like Blu-ray [see below], which is an easy extension of our platform and is basically low-hanging fruit for us. However, it will still take some time before consumers start buying Blu-ray devices en masse."

In other Ensequence news:

1. In time for the new baseball season, the company has launched a new version of MLB.TV Mosaic, the multiscreen broadband video service which it provides to Major League Baseball, and whose initial version debuted last year (see [itvt] Issue 6.70 Part 3). The new version of the application offers end-users:
   • Video quality which Ensequence claims is "two times better" than was previously available on broadband.
   • The ability to drag and drop selected games into the video mosaic, and then to further customize the experience by selecting their video mosaic format in the lower right-hand corner of the screen.
   • The ability to watch combinations of six, four, three or two games simultaneously, and to watch games in full-screen mode.
   • The ability, when live games are not available, to watch on-demand games, outtakes from the previous night's games, and archived footage of every game dating back to 2005.

   

2. At [itvt]'s TV of Tomorrow Show in San Francisco last month, the company announced that its on-Q Create software now offers interactive video authoring capabilities for Blu-ray DVD's. "Blu-ray technology is an extremely powerful platform for interactivity, and Ensequence is proud to roll out a simplified design and programming environment for the platform," Ensequence CEO, Dalen Harrison, explained. "With the on-Q Create suite, our customers can now bring creative, compelling, customized and fully interactive content to viewers with Blu-ray." According to Ensequence, on-Q Create's new Blu-ray authoring capabilities are intended to be used for such applications as entertainment portals, enhanced content illustrating special effects concepts, context-based merchandising, and search and personalization options. The company says that on-Q Create enables creatives to identify, label and categorize video segments "in any way imaginable," allowing layout, focus management and video stream indexing to be accomplished visually; and that it thus allows creatives to rapidly develop and test numerous interactive experiences. The viewer, meanwhile, controls what is viewed, for how long, and in what order, through rich interactive menus and powerful custom controls, the company says, and rich graphics utilizing over 2 million pixels in 1080P, with complete alpha compositing, enable a rich and flexible viewing experience.

   Ensequence points out that Blu-ray is a far more powerful platform for interactivity than are traditional DVD's, because it offers increased storage and HD capabilities: among other things, Blu-ray DVD's can store information, such as favorite scenes, customer details and previous purchases, between viewings of the disc. According to Ensequence, viewers of Blu-ray DVD's authored using on-Q Create have the option of theme-based viewing as well as traditional chapter-based viewing: theme-based viewing, the company says, enables seamless weaving of synchronized content, including time-based updates of content and advertising. Instant shopping opportunities can be offered with any content, Ensequence claims. According to Ensequence, the next generation of Blu-ray DVD players will incorporate network capabilities: the company says that it plans to support on-demand content downloads to Blu-ray set-top DVD players, allowing viewers to download updated and supplemental content for the DVD they're watching. Programmers and studios will be able to easily combine local personal profiles to download and execute relevant content based on user interest and input, the company says.

Originally Published: April 16, 2007 in [itvt] Issue 7.26 Part 1

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