The Fall of Move Networks

Just a few years ago, Move Networks was a high-flying startup with what seemed like unlimited possibility. The company had succeeded where many video technology startups (and some incumbents) had failed to deliver — by providing high-quality video streams to the end user without having to worry too much about how much bandwidth was available. It raised about $70 million and even nabbed a few deals with major broadcasters, being chosen as the default video technology for streams from and

But despite a good amount of early traction, the company failed to deliver on its early promise. With those broadcasters now abandoning the technology and Move Networks shifting focus to sell its technology platform to Internet service providers to deliver IPTV services, it’s worth looking at where the company failed in serving major media customers.

So what went wrong? For one thing, Move Networks never reached critical mass on the consumer side of things; despite early success with ABC, Fox, the CW, and others, many media companies shied away from the technology because it required a plugin that not many consumers had installed. This created a vicious chicken-and-egg problem: How do you get people to install the plugin if it’s not being used to deliver good premium content? And how do you get good premium content unless people already have the plugin installed?

Many people will point to the need to install the Move video plugin as a barrier to entry for the technology. Flash is still seen as the go-to video technology, in part due to its ubiquity in consumer computers. Adobe claims that its plugin is installed in 98 percent of Internet-connected computers; by comparison, Microsoft’s Silverlight is now installed in about half of all Internet-connected computers, according to

In addition to the lack of an installed base, using Move Networks cost a premium compared to other web video technologies, requiring custom encoding equipment and the use of its platform for management of video assets. As a result, the cost of deploying the technology was mostly out of reach for all but major media companies.

Former employees I’ve spoken with have told me that Move lacked the strategic direction necessary to take advantage of the two years or so worth of technology advantage that it had when it first nabbed those first media customers. Move made a number of investments in engineering personnel to create alternative revenue streams, in both its “platform” business — what would be a precursor to its current IPTV strategy — and in advertising. But none of them really seemed to stick. The company topped out at about 180 employees at one point, before scaling back drastically with two big rounds of personnel cuts that ended up cutting headcount roughly in half.

Advertising was a particularly tough nut to crack for Move; because most video ads are built to support Adobe Flash, the Move player could not natively support them without having the ads permanently stitched into the video file itself. With no good way to dynamically insert Flash ads into the Move player, most programmers that relied on its technology for video delivery simply layered a Flash player on top of the Move player, which showed ads during planned commercial breaks.

Meanwhile, the other big players in online video caught up to what Move was doing. Its big advantage was HTTP-delivered adaptive bit-rate streaming, and it led that segment of the market for a few years before Microsoft and Adobe were able to offer similar capabilities with updates to their web video platforms. With the release of Silverlight 3 and Flash Media Server 3.5 last year, Microsoft and Adobe are able to deliver video that is close to the same quality as Move’s, using similar adaptive bit-rate technology.

Move isn’t necessarily done for; its video technology is still being used by The CW and for Comcast’s Fancast Xfinity TV Everywhere deployment. Furthermore, its acquisition of Inuk Networks and its focus on providing a platform for ISPs to deploy IPTV services could still catch on, particularly for ISPs who want to try their hand at rolling out video services in markets where they don’t have physical broadband infrastructure. The company already has one such deal, with Cable and Wireless’ international subsidiary, to roll out IPTV services to broadband subscribers in markets where it would be cost-prohibitive to build out a cable plant.

The company has also assembled a pretty strong management team, led by former DirecTV COO Roxanne Austin, who was partly credited with that company’s turnaround in the early 2000s and took over as Move’s CEO last summer. Austin has recruited some other folks from her DirecTV days, including founder and former CEO and Chairman Eddy Hartenstein, who recently joined the board, and former DirecTV VP of business affairs Steven Cox, who joined Move as its executive vice president for strategy and business affairs.

But Move’s days as a competitor against Adobe Flash and Microsoft Silverlight are over. It might continue to support existing media customers — at least, for as long as they want to stick with the Move player — but it probably won’t be out fighting for that business.

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