Reality Digital, a white-label video service, gets funding to expand

Reality Digital provides software that web publishers can use to host their own collections of videos. The company was founded in 2004, before the latest wave of online video startups appeared, and has done well enough for itself, winning MTV, The Travel Channel and other large media companies as partners. And now it has also raised $6.3 million from OpenView Venture Partners.

Reality Digital lets a third party use its software to host an entire interface for videos: The videos themselves, and user profiles, comments, and other features — plus advertising space so a publisher can make money from traffic to the video part of the site.

Here’s a screenshot of Reality Digital in action on a site created by MTV, called “You R Here” that’s a sort of venue for fans to express themselves about their favorite shows:

Reality Digital’s core customers were media companies up until around three months ago, chief executive Cynthia Francis tells me. That’s when large television broadcasters had to start paying more attention to the web: Movie and television scriptwriters went on strike, cutting down the number of compelling new shows they could offer, and forcing them to more seriously consider distributing and monetizing content online.

The company’s competitors include Google’s online video market leader, YouTube, that has recently started offering its own, somewhat restricted white-label service for video publishers. And then there are competing startups, like Magnify and Vodpod, that offer white-label services for publishers.

The San Francisco company will use the money to fuel business and technical expansion in the US and Europe. The company wouldn’t disclose traffic numbers to me, because many of its clients keep that information confidential, but it is transferring more than 100 terabytes of data per day, according to Francis.