Prism Skylabs IP Video Service Examined

By Ethan Ace, Published Sep 13, 2011, 08:00pm EDT

A Silicon Valley startup, Prism Skylabs, is targeting the IP Video marketplace, funded by an All Star lineup of investors and lead by former executives of video analytic companies 3VR [link no longer available] and ObjectVideo [link no longer available]. The company is taking a different approach to the market and is likely to have a significant impact. In this note, we examine what Prism Skylabs is attempting to do, its potential, risks and how we see this impacting the market.

Let's start with a review of the most important aspects of the business:

  • Powerful financial backers: Prism Skylabs has a very strong set of investors with nearly unlimited pockets. Investors include the former CEO of Google, Eric Schimdt, Ron Conway, the godfather and most famous angel in Silicon Valley, Yuri Milner, the Russian super investor, Michael Arrington, the tech's industry most famous journalist/blogger, etc. Expect Prism to get tens of millions of additional funding over the next few years to expand their efforts and lots of favorable press coverage.
  • Application vs Infrastructure: Prism is looking to add applications leveraging existing security camera infrastructure. They will not be in the business of selling DVR boxs, VMS software licenses, VSaaS storage, etc. This is much different than nearly anyone in the IP video market.
  • Direct vs Channel: Prism says they will be offering a free service driven by a software downloaded at the user's site that automatically connects to Prism's cloud service. It's highly unlikely that Prism will beg ADT to re-sell their services, etc. Their model will likely attack traditional channel relationships.
  • What is it? Prism says they are targeting business that have a retail or consumer focus (e.g., restaurants, stores, hotels, malls, etc.). Examples of services they would provide include: (1) sharing real time video and images over the web via various social media outlets and (2) providing business intelligence via heat maps, PoS integration, etc.

Here is Prism's pitch at the TechCrunch Disrupt conference.

In terms of services and their impact, we see 2 broad categories for Prism:

  • Easy Sharing of Video: We think this has the most immediate potential and is relatively easy to accomplish. Essentially no one in the IP video market does a good job or even really tries to make it easy for users to share their video on the web with the public. Sure, you can manually embed a video feed from an IP camera on a web page but it is a real pain and rarely done. We see real value in this and an unmet need.
  • Business Intelligence: This aspect is a lot harder. While heat maps, PoS integration, etc. have value, there are either lots of choices for this already (PoS integration) or it is really hard to do (e.g., retail video analytics).

We do see a number of potential concerns with adoption of the service itself:

  • Connecting to cameras/recorders: With no standards in place and hundreds of proprietary interfaces, connecting to what is already on site is going to be problematic for most users. Larger customers with existing DVRs are likely to have the DVR manufacturer object or block integration with Prism (as they do with most everyone).
  • Camera Positioning: Most cameras are unlikely to be in the right position to be used for marketing or for business intelligene. This may require purchasing of new cameras to make use of the service. We think this might be abated by the fact that IP cameras are now increasing cheaply.
  • Attractiveness of the video shared: Prism has a strong emphasis on privacy blurring or obscuring most personal details. The company also mentions that they are building composite images from a series of lower resolution inputs. It is not clear to us how attractive or useful the images shared will be.

Conclusion

Ultimately, with a company only a few months old, it is impossible to have any firm sense of how good or bad it will eventually be.

However, given the investors backing the company, we think Prism will have large amounts of money and marketing to spread the message for their service and its value. Of course, this does not guarantee success (if so, 3VR would not a fringe player and Object Video would not be in the middle of a kamikaze attack) but it does mean that customer interest will be raised. We think this is a good thing as increasing the value of video for non-traditional uses has great potential.

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