Aniruddha Gupte, Layer3Media Technologies: Helping distribution of video content

Aniruddha, please tell us what Layer3Media Technologies is all about.

Layer3Media helps video content-owners distribute their video to anyone, anywhere, anytime and make money from their content easily without any upfront costs whatsoever. We do this by providing industrial grade copy-protection linked with easy payment methods including “free-with-ads”.

How is Layer3Media different from other video distribution models? What are your flagship solutions?

Firstly, we have turned around the entire model and do not ask content-owners to upload, license or sell us their content. Most other services require users to upload their content – so much so that most people are taken aback when I say “don’t give us your content, take our free software and encrypt it yourself”. Content-owners also don’t need to maintain streaming servers, nor do they need to employ costly CDN (Content Delivery Networks) based distribution. They can distribute over Rapidshare, Torrent, even through pen drives (USB drives). Many other distribution channels are available too.

Our flagship products are the L3 Producer and the Wizo Desktop Player. The L3 Producer encrypts files and creates an L3 format intelligent file. The Wizo player decrypts and plays the file after ensuring payment.

How did the idea for Layer3Media come about? How much capital was required to implement the idea?

It all started with my love for movies. And not being able to find them in the cold winters of Milwaukee, Wisconsin. What was on TV was not enough. I wanted to watch Polanski, Kurosawa, Bengal and such – these weren’t even names to most people.

In 1997, I started iCinema.com to put movies online. When I started, we were the second website in the world to put video online as a commercial proposition. We bought rights to movies and legally published them online. We had a lot of firsts like we had most of the Indian Regional languages online, and we also broadcasted the first Hindu Wedding live online and We pioneered many custom technologies and business models. I switched to doing something else that made money instead and sold that company after growing it rapidly in a cut-throat marketplace.

This gave me the opportunity to do some more research and test other business models. Still interested in movies specifically and their distribution, I decided to pursue it once again. With what I had learned about the technologies and the market, I created L3.Most of the capital and the learning have come from previous companies that I have owned and were in a related business. I have put in almost Rs. 40 lakhs of my own (and family) money to date.

Tell us about your background.

I am a graduate of IIT Kharagpur, India. My most recent entrepreneurial success was the sale of a U.S. based venture that I led (as CEO) and grew at 700% from year two to year six. I have spent over fifteen years engaging in business, research and intellectual property development in the area of Computers, Software and Networks. I was also the founder of iCinema.com which was the first to launch full-length feature films streamed over the web. I have been a consultant in IT & Software to Fortune 100 companies in the US including Brady Co., Rexnord and J.I Case as well as to small businesses.

Where do you see video platforms on the web and Layer3Media Technologies five years from now?

The internet is bigger than the Web – many other protocols and technologies can be run over the Internet and that is what L3 represents. The Web will become less and less relevant as people find different ways to communicate that do not use the Web, but the underlying Internet technologies to communicate and deliver user experiences.

What is Layer3Media Technologies revenue model?

Our revenue is model is simple. We are similar to a credit card company – we provide security for a transaction between the buyer and the purveyor of the content without taking possession of the goods. Our revenue comes from the transaction and we keep a percentage of the price.

Our business model is based entirely on the revenue model describe above, but is a little more complex. One key differentiator of our business model is that we do not take content from the owners, like all others do. We give them our packaging software free. Only when the user wants to view the content (using our free player), they have to pay for it (this includes watching free with ads). We provide the security to make this transaction happen and collect a transaction fee in the process.

What are the challenges that you faced while developing your products?

Currently, most of the challenges are technical. Some of the work has to be outsourced as the founders are not familiar with some specific technologies that are needed in the product mix. Now that the technical issues are getting resolved, we need investment in order to launch our products.

How has the journey been so far? Let us know about your expansion plans.

Our business has the potential for $200 million in revenue in 5-7 years based on a detailed financial analysis, because not only do we have a clear and practical revenue model we can also help expand the current market many times.

We are also looking at exponential growth and therefore expecting to ramp up our hiring as well as customer acquisition activities. We plan to first tackle the Indian and US markets and then expand rapidly into other markets two years from now.

We have also tied up with some customers and they are currently testing our beta product. Our idea also won a gold medal at the DST-Lockheed Martin Innovation Program.

We at YourStory.in wish Aniruddha and Layer3Media much success. To know more about this venture and the platform that they’ve created, check out www.layer3media.com.

Also, let us know your views on this story by writing to us at feedback@yourstory.in.