While Google grapples with making YouTube profitable, a Silicon Valley start-up called Dyyno says it has a fraction of the video-sharing site’s distribution costs and is focusing on monetization out of the gate.

Dyyno’s technology basically lets users build a channel of whatever they want: live video, recorded video, presentations on their laptops, photo slideshows or game-playing and then stream it live to many concurrent users. The content is also archived for later use.

CEO Raj Jaswa says what makes Dyyno’s technology different is that is combines the best of both the server-client and peer-to-peer models of sharing data. When the peer-to-peer flow breaks down, the more reliable and expensive server-client model fills in the gaps, he said.

“With this model, we eliminate 98 percent of the cost of video distribution,” he said. “Where a normal server might serve 1,000 streams, we can bring 100,000 streams.”

Dyyno is already supporting live screen-sharing on Xfire, a gaming site with almost 14 million users.

The company targets a few different market segments. A consumer-facing option charges $10 a month for 10 concurrent viewers. A business channel costs $100 a month with 10 channels, allowing up to 100 viewers. A “broadcast station,” meaning a provider who wants 100 channels or more than 1,000 concurrent viewers, pays a $10,000 licensing fee plus a revenue share from advertising. The revenue sharing agreements are negotiated case-by-case. Dyyno is also compatible with Cisco’s WebEx online meeting service.

Why not simply upload videos to YouTube or put presentations on SlideShare? Jaswa says because of Dyyno’s cheap distribution, it can support high-quality video and doesn’t have the same bandwidth limits as competitors like Ustream. YouTube also limits video size to 2 gigabytes and reserves the right to place advertisements.

“The business models out there for video distribution need to change,” Jaswa said. “People will want control of what they put out there and Dyyno gives them that platform.”

The company started with about 10 Stanford Ph.D students two years ago, Jaswa said. It now has 25 employees and has raised $7 million from Artiman Ventures and Startup Capital Ventures.

Original post created by: Digital Venture Beat