#37- Deciphering $1mn+ in annualized revenues of VdoCipher
Covering the journey of two students who set out to eliminate video piracy, and made over $1mn in annualized revenues this year
The groundwork
Think about a world where content creators do not have to worry about their content being downloaded, copied, and shared freely. Content creators work hard to create their own content and earn a decent ROI on it. A content creator is not only a YouTube star, or an Indie artist, but also an educational institution, a yoga or fitness chain, or an OTT platform. All of these persons or organizations create content with the single goal of making decent revenues out of it. The content is their intellectual property. And online piracy violates their intellectual property rights.
What does Digital Video Piracy cost the US Economy in a year?
Digital video piracy results in between $29 billion to $71 billion of lost revenues annually in the US. On top of that, the economy loses anywhere between 230,000 to 560,000 jobs per year. More than 125 billion views of American-produced TV episodes are pirated digitally every year with ~80% of piracy happening via streaming. Read more here.
While most college kids would thrive on pirated movies and TV shows and take pride in the amount of money saved by watching movies for free, IIT Delhi students Siddhant Jain and Vibhav Sinha made it their mission to reduce, if not eliminate video piracy.
The beginnings
The founders Siddhant and Vibhav met while studying engineering in IIT Delhi in 2015. They experienced the joys (for the students), and despair (for the content creators), and embarked on a journey to create a tool that would take online piracy head-on. And VdoCipher was born.
Having approached top e-learning companies in India like CAClubIndia with a prototype, they got a first-hand account of video piracy being experienced by these behemoths. Almost every company was looking for a better solution. Once their hypothesis got validated, they started building out the product, feature-by-feature, and launched VdoCipher in 2015. By the time they graduated, they already 6 customers paying them for their video encryption and digital rights management (DRM) tool.
Malpani Ventures has had the privilege of investing in and working with the founders since early 2016 when VdoCipher raised an angel round from investors like Solidarity, 91Springboard, and others.
What's so special about the product?
VdoCipher offers a bunch of security features like Hollywood-standard DRM encryption used by the likes of Netflix, screen-blocking, viewer-specific watermarking, optimized coding, and licensing technology for videos that can offer high-quality viewer experience even in low internet connection regions beyond Tier 2 & 3 towns.
Put simply, no internet-based downloader can be used to play, stream, or download videos if the company uses Vdocipher tools. The company uses the same underlying encryption tools used by bigwigs like Netflix, and Hotstar. It is also a direct Google partner for major encryption technology called Google Widevine DRM.
The features that the company has developed ensures that videos can neither be downloaded nor shared illegally from a video platform. A core advantage of using VdoCipher is that an easy to use package combined with cloud hosting helps not only big organizations use the product seamlessly, but also allows a small institution or a single person running a website a user-friendly option to protect their intellectual property.
VdoCipher can be used on websites as well as apps. CDN server hosting, customer video player, analytics, dashboard, APIs are all part of their complete package.
For the uninitiated, VdoCipher also shows how much revenue can a company potentially lose because of online piracy.
Share this with your people who might lose money because of online video piracy!
Who uses their services?
Currently, VdoCipher mainly targets education and media space. Numerous Indian companies in UPSC, Entrance exams, K-12, Coding tutorials, and others rely on VdoCipher to provide video playback and security solutions. The company also has edtech customers from Europe, Brazil, and the Middle East in varied spaces like science, marketing, finance, and mathematics.
Not only edtech, even companies in online fitness, music, media, and communication, regional movie producers find these services useful. Recently, film festivals in Brazil, Ukraine, and Yugoslavia have also used VdoCipher for video security. With every passing day, the importance of protecting intellectual property rights, and the cost-benefits of using DRM encryption is making more and more companies turn to VdoCipher for its services.
Tailwinds propelling growth
With COVID forcing their hand, most educational institutes have become online providers, and are basking in its glory. VdoCipher has seen more than double the sign-ups for new customers, a more than 50% growth in online viewership, and strong growth in customer base that has since crossed more than 1000 institutions. About 60% of this growth has come from outside India which has solidified its value proposition.
Every month, over 3 million hours of content is played via VdoCipher in 30+ countries around the world!
The offering is a sweet deal for customers that can avail of the best-in-class video security at a completely variable cost. The charges depend on bandwidth, which in turn depends on the number of views, and the number of videos watched.
Who are they competing against?
Video hosting solutions like Vimeo or Youtube offer no-or-low security against video piracy. At the same time, there are a few security technologies available that offer exhaustive services, but the pricing makes it out of reach if you aren't a Netflix, Hotstar, or Disney!
VdoCipher is one of the only players that offers a complete video hosting and security solution that works for all kinds of businesses, effectively democratizing the right to protect intellectual property. It brings the best-in-class technology previously only available to companies with deep pockets, and delivers them to even a mom-and-pop coaching class, or an indie movie platform!
If you know of brands or companies that can use VdoCipher’s services to protect them against online video piracy, please comment below!
Show me the money!
What better number than an Annual Revenue Rate of $1.3 million, and a QoQ growth rate of 20-30% to provide credibility for their services?
We believe that every organization, whether big or small, that produces video content, has a fantastic way of protecting their intellectual property using VdoCipher's solutions thereby greatly increasing the probability of success for this young and promising venture!
If you want to know about more such founders and learn about their journey, please subscribe below! I promise not to spam with B.S.