Elemental Technologies Looks to Hit Home Run with Streaming Video for TV and Web Content

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taking away from its TV-based revenues, such that the revenue per viewer is becoming nearly constant—regardless of whether they watch on a PC, TV, or smart phone.

Meanwhile, Elemental has been busy signing up new partners to help get its technology into wider use. It recently added Hewlett-Packard and Lenovo as distribution partners. Its list of allies also includes Adobe, In-Q-Tel, and Nvidia. The company also has recruited Bruce Chizen, the former CEO of Adobe (and a relatively new venture partner at Voyager Capital), to its board of directors.

Given the exploding and competitive video processing market, what advantages does a small company like Elemental have? “We can innovate faster than our competitors can,” Blackman says. “We can do customer support better too,” he says, because the company built all its own video compression technologies, so its development team knows all the intricacies of what might go wrong.

The biggest challenge, Blackman says, “is around the fact that we’re selling a new technology. Broadcasters make their money around having video streams working 24/7 and never going down.” So there is a natural aversion to risk with a new video processing system. “We convince them that they can trust their business on a GPU system,” he says. But he admits, “Getting that national momentum” around its technology has been challenging. Nevertheless, Elemental has roughly doubled its revenues in the past year and is on pace to become profitable in 2011.

Elemental was founded in 2006 and raised a $7.1 million Series A round in 2008, co-led by Seattle-based Voyager Capital and Cambridge, MA-based General Catalyst Partners. The company has just under 30 employees, and Blackman says it has been investing a lot of resources in its national sales team and its R&D efforts, including its intellectual property protection.

“We are working aggressively to patent the technology,” he says. “We expect to see some get granted in the next year or so.”

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