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The Netflix Model: Disc Publisher Rimage Acquires Qumu To Add Streaming Capabilities

CD DVD Printers, Rimage, TechnologyNancy Woo20 October 2011

Moving Towards Two Options Everywhere: DVD and streaming capabilities offered for all

The world of corporate infrastructure is always changing, with one company merging here, another merging there and bits and pieces of the whole breaking off along the way. Two instances have occurred recently of relevance to disc publishing and new media communications.

The first we are all familiar with: Reed Hastings, CEO of the ever-popular Netflix, decided about a month ago to separate the DVD portion of the website from the online streaming into something called Qwikster. After the public vehemently opposed the split and Wall Street stock for Netflix dropped 25%, Hastings picked up his pride and related to the public that he wouldn’t be going through with the separation process.

Whew. When people thought that their beloved Netflix was going to get the axe, and for no apparent reason, many actually started cancelling their Netflix accounts. One of the reasons Netflix is so successful is because of the simplicity and convenience of searching a huge movie and TV database, with options to either stream online or have a DVD mailed to your residence. If these two things were to be separated, the entire scheme of simplicity would have gone down the drain. Good thing Hastings saw his error and listened to his customers before it was too late, because Netflix/Qwikster would have been bye-bye.

Following the theme of maintaining a streamlined process for choosing media, the disc publishing company Rimage has recently acquired Qumu, a video communications company. Unlike Netflix, which was trying to separate the DVD and online streaming portions, Rimage, which publishes content onto discs for clients, has recognized the value of adding media streaming capabilities to their bag of tricks. Qumu is a start-up video communications business, which specializes in technology that can publish video or media straight to smartphones or the Internet.

Rimage has traditionally been a distributor of on-demand Blu-ray, CD and DVD discs. For example, a company might hire Rimage to take their video surveillance and publish that content to discs. Now, with the clever merging of a video communications firm, Rimage will be able to not only take that footage and publish it to discs, the customer will also have the option of having the media sent straight to their computer or smartphone. Following the original Netflix model, Rimage is giving two options: have a DVD sent to you, or stream the material online. It’s brilliant, and in a showdown between Rimage and another disc publisher that can’t offer instant streaming, who do you think will get the customer?

Qumu’s clients are typically in the banking, telecommunications, university, technology and government industries, and the company helps them manage, create and securely distribute video content.

“We’re like Netflix, Hulu and YouTube for the enterprise,” said Ray Hood, chief executive of Qumu in San Bruno, Calif. “We make the video secure and targetable to the right employees.”[1]

Rimage acquired Qumu for $52 million, along with Qumu’s 100 client companies, last week. Rimage is hoping that they will be able to help Qumu expand into markets faster than they would on their own, and in return Rimage adds a valuable capability to their service line.

[1] Takahashi, Dean. (October 10, 2011). “Rimage Acquires enterprise video communications startup Qumu for $52M.” Venture Beat.

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