Earnings Interview: Suranga Chandratillake, CEO, Blinkx: Losses Slimmed, Eyeing Canvas

AIM-listed video search index Blinkx saw 113 percent better revenue of $13.93 million in the 2008/09 year – but higher outgoings still meant it made an $8.87 million loss. Marketing spend nearly doubled to $13.9 million, R&D grew to $4.2 million, admin costs to $1.8 million. But the loss was halved from last year thanks to revenue growth.

Run from Cambridge and San Francisco, the outfit indexes 35 million hours of video, offers the search service to white-label partners as well as to its own site, and its AdHoc system lets producers place ads in their videos. It claims monthly uniques are up 56 percent to 88 million, 8.5 million searches are served daily and its video ad CPMs are holding steady at $16.25 in the downturn. Blinkx now has a dizzying array of products, but the company says 2009 is “a year of tremendous potential” and will continue investing in the “once-in-a-generation opportunity” of online video. Blinks is now planning “transactional hi-jacking”, marrying ecommerce with its downloadable video search client.

Blinkx on Project Canvas?: Blinkx this month struck a deal to place its video search in set-top box services offered by BSkyB (NYSE: BSY) interactive TV spin-off Miniweb. Speaking to paidContent:UK, CEO Suranga Chandratillake revealed Blinkx is also involved somehow in BBC’s Project Canvas VOD scheme, currently out for consultation: “We’ve played a role in the project so far. We were invited to submit comments on the work that’s taken place. Most of the work we’ve done has been private so far. If it can deliver the result, it would be good for everyone.”

Chandratillake wants to discourage the TV folk behind the project from limiting Canvas just to shows from the main broadcasters: “Helping people in that world lose those shackles and say, ‘you can have that, but we can also have this online video from the web‘. The key thing for these platforms is openness – that anyone can put anything up and you have access to this amazing tapestry of content.”

What’s the goal for Blinkx?: The market speculated 12 months ago about an acquisition by News Corp (NYSE: NWS) or even Google (NSDQ: GOOG). Google Video doesn’t exactly index video as well as Google indexes the web, so was Blinkx, which floated on AIM in 2007, seeking a sell-off? The companies’ rainbow logos, at least, seem complementary. “It’s a very Silicon Valley thing so I wouldn’t read too much in to that. We’ve always set the company up on the basis that we want to run it ourselves. In some ways, we’ve already had the various ‘exits’ we need – we’ve had investment, our finances are in good order.

“But, having said that, you can see ways in which Blinkx would fit quite neatly in a search platform or a media company – you have to be open to that on behalf of the shareholders. Four years ago, YouTube and Blinkx didn’t exist – YouTube did that without being part of some larger platform – it just demonstrates that, when you have this level of disruption, you can build pretty large centres of activity from scratch. But Blinkx is no longer pursuing ad network Miva, which rejected its buy-out offer last year.

New platforms and mobile challenges: “I would imagine 99 percent of online video gets consumed on a computer monitor – but it can be so much more.” For Chandratillake, a technologist who has since handed nuts-and-bolts responsibility to a dedicated chief technology officer, that means mobile. Results could be seen in a year, but: “We’ve had quite a few frustrations – the mobile industry is probably even more closed-off, controlling and micro-managing that the TV industry. It’s been difficult to have meaningful headway. We’ve built some prototype systems, but there are lots of players involved and, at the moment, most of the telcos are interested in other things like how they pay off or restructure their debts.”

How have things evolved?: Today, a third of the business comes from its own Blinkx.com destination search site and two thirds from the video search it powers for clients’ sites. “It’s been that ratio pretty much from the start – which surprised us in the early days, when our attitude was, Blinkx.com was going to be a showcase and we would make most of our money and traffic through white-label relationships. In reality Blinkx.com has grown very nicely but we’ve ended up pursuing this two-pronged approach.”

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