jw player raises $100m to build subscriptions and other monetization tools around its video software

JW Player Secures $100 Million Funding to Drive Video Innovation

JW Player, a pioneering force in online video technology – notably powering YouTube’s initial video player prior to Google’s acquisition and subsequent development of its own solution – has consistently maintained profitability. This success stems from a business model centered on delivering comprehensive video streaming tools to publishers and organizations seeking to integrate video into their online platforms, without the need for extensive in-house development or reliance on potentially competing entities.

Growth and Investment

Following a period of substantial growth fueled by the surge in online video consumption during the COVID-19 pandemic, the New York-based company has announced a significant funding round of $100 million. This capital injection is intended to facilitate expansion of its technological capabilities and position the company for the future evolution of the video landscape.

The investment is being provided solely by LLR Partners. While the precise valuation of JW Player remains undisclosed, sources indicate it is nearing the $1 billion mark, though not yet reaching it. This funding arrives after a period of considerable growth for the company, despite its relatively low profile within the industry.

Increased Video Consumption

Dave Otten, CEO and co-founder of the company – named in honor of co-founder Jeroen Wijering, the original technology developer – revealed in an interview with TechCrunch that the company experienced a nearly 200% increase in video streaming traffic over the past year. Live streaming witnessed an even more dramatic surge, growing by 400% during the same timeframe.

Currently, over 600,000 applications and websites utilize video powered by JW Player. Approximately 10,000 of these represent premium users, while the remainder benefit from the software on a free basis, as stated by Otten.

This balance allows the company to maintain profitability, a status it has enjoyed for several years. Notable clients leveraging its tools include Sesame Street, TIME, Hearst, Insider, IMDb, and the Chelsea Football Club.

From YouTube's Origins to Future Innovation

While JW Player’s origins lie in powering the early iterations of YouTube, the company is determined to avoid the fate of many pioneering firms that struggle to innovate later on. It aims to leverage its first-mover advantage to anticipate and shape the future of video technology.

Focus on Monetization

The primary challenge JW Player currently addresses mirrors that of its clientele: effective monetization. As organizations increasingly implement paywalls for their written content, they are exploring similar strategies for their video libraries. JW Player intends to serve as a key partner in this transition.

This will involve further investment in subscription services, alongside the development of new tools for video personalization and advertising opportunities. These advancements will be powered by the extensive data JW Player has collected and continues to gather regarding video usage patterns.

The company possesses a unique asset in this regard: users of the free version of JW Player contribute valuable insights into video viewing habits, effectively “paying” with data.

Expanding Capabilities

JW Player is also expanding its capabilities in live and on-demand video. In May, it acquired Vualto, a U.K.-based specialist in these areas, including Digital Rights Management (DRM) solutions, which have already been integrated into its platform.

The Growing Importance of Online Video

Video currently constitutes a substantial 80% of all online traffic, with individuals spending over two hours daily watching video content. While a portion of this consumption occurs on major platforms like YouTube, Facebook, Instagram, TikTok, and Snapchat, significant opportunities remain for others, supported by companies like JW Player, to establish their presence in the market.

LLR Partners' Perspective

“JW Player has consistently been at the forefront of digital video innovation, beginning with founder Jeroen Wijering’s creation of YouTube’s original video player in 2008,” stated David Reuter, Partner at LLR Partners. “Today, the company provides the most comprehensive platform for technology, advertising, and data analytics within the digital video ecosystem. We are excited to collaborate with the JW Player team as they expand their platform and continue to enhance the ways brands can host, stream, and monetize video.”