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Brightcove has buzz. It’s run by Jeremey Allaire, who seems like a solid get-it-done entrepreneur. And today, they have managed to land themselves on the front page of the WSJ. They have been profiled by Don Dodge, as well.

Brightcove is a middleman, providing a mechanism for video content owners like NBC, Reuters, etc. to syndicate their content. Brightcove inserts advertisements into the video stream and distributes the revenue from advertisers to content owners and syndicating websites. It’s like Google AdSense for Video.

We’re investors in Akamai (AKAM) and I consider it a key holding. They own large servers in many peering locations across the net. Media companies contract with Akamai to cache their data at these remote sites- for example, Apple (AAPL) runs iTunes on the Akamai infrastructure. This caching distributes network load, provides scaling for peak usage periods, and prevents QoS problems to ensure the media viewer has a quality experience (funny how QoS is going mainstream as an acronym isn’t it?). Akamai has a large software and hardware infrastructure investment to enable this distributed hosting.

It appears to us that Brightcove’s business model is just a subset of Akamai’s - they already act as a middleman between the media owner and the viewer. Brightcove has a really neat idea but does it have big barriers to entry? A Brightcove competitor is quoted in the WSJ article:

Not everyone will be left standing after the market begins to settle. “I don’t think there’s room for five of us,” says Ian Blaine, chief executive of thePlatform for Media Inc., another start-up company that is acting as a middleman. “There’s room for two or three.”

He’s right - scale is important - you want to have lots of media customers and lots of viewers to provide advertisers with that one-stop shop. Last quarter, Akamai spent $23M in sales and marketing to media customers. They already do business with the folks who want to syndicate their media. Brightcove, according to the WSJ, has only two salespeople. Brightcove’s last funding round was just $16M. Which company do you think can scale media customers faster?

Akamai already has a large physical infrastructure that is profitable, something that is a huge barrier to entry. They are missing the advertising component. The media to be syndicated is already on or could be easily added to their server infrastructure. They could put the same licensing interface together as Brightcove and run it on their mature caching platform to ensure viewers have a quality experience. Then they sell it to their existing customer base. It’s not rocket science.

For that matter, Brightcove’s business model may be running on top of the Akamai infrastructure. Akamai won’t disclose customers, but it’s a safe guess.

Brightcove (or one of its four competitors) is either a great acquisition target for Akamai, allowing them to leverage their existing infrastructure in a new way, or a company they could snuff out with a flick of their finger.

(Hat tip: IP Democracy)

Related: Akamai Technologies Inc. Q4 2005 Earnings Conference Call Transcript

AKAM 1-yr chart:

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Source: Brightcove vs. Akamai For Syndicated Video Content (AKAM)