LARRY KLESS: So why don't we take it from the top. I was just on your blog and I noticed that it was a big news day yesterday, wasn't it?
PETER CSATHY: Oh, yeah. Yesterday was a very big news day because, of course, we introduced Sorenson 360 which we believe is a game changer. And it's interesting the feedback we've received from the trusts and analysts so far is that they agree, they understand why it is a game changer in this space. So that was exciting. And then kind of buried in there, but also very important, is the fact that we had an enhanced version of Squeeze 5 that was released. And so there are some important changes and enhancements in there that are identified in the press release. But so you now look at the overall ecosystem that we've created with Squeeze and 360, it's pretty exciting. And then let's not forget that there was one more very important thing which was the complete reworking of our corporate identity, so a completely redesigned website and logo and such. So the other thing, last night we all slept well because there wasn't much sleep up until yesterday at launch.
LARRY KLESS: So are you calling 360 video delivery network?
PETER CSATHY: Yes. We're calling Sorenson 360 a VDN, a video delivery network and the reason being that what we've done, based on the feedback from our user base, so we're not guessing -- based on the feedback of our user base is we have re-imagined what video publishing should be. And so what we mean by that is our users have told us that they want an all-in-one solution. And they didn't have that before with power encoding on the client side. And they also identified significant shortcomings with other services in the space. And based on that, we built our Sorenson 360 and it re-imagines what video publishing should be.
LARRY KLESS: So it comes out of customer demand. Is that what you would say? Or has Sorenson been working on this for some time?
PETER CSATHY: Well, it's certainly customer demand because we have this map of user base of Squeeze users and we have a continuing dialogue with them. And this is something that's bubbled up, that there is demand for this kind of an all-in-one solution that meets their needs. So that's where it came from. And we built it based on the feedback that we received in terms of what the needs are there. So our initial go to market strategy with Sorenson 360 is our existing customer base. They've asked for it and now we have a solution that we're making available to them. And that's our core. We're focusing on the core Sorenson customization for the video professionals, what we call the SMB, the small to medium businesses and video professionals.
LARRY KLESS: It seems you've been "baking it for a long, long time." As part of that, did you role this out at all to some of these core customers to get feedback along the way? Or did you have focus groups or getting to launch, how did customers give you their input into this?
PETER CSATHY: Well, for a long, long time, we've been having these -- like I said, the ongoing dialogue with our user base in terms of what kind of features you want in Squeeze. And then when you get into the dialogue of Squeeze, it naturally evolves into, "Well, we'd like to have the all-in-one solution." And we went from there. And so that's what germinated the concept of Sorenson 360. And this is something that full team, including the expanded team have been working on for a long, long time. And then you add the rebranding, the corporate redesign, it was an all encompassing lengthy process that saw the light of day yesterday. We had a significant beta program. So we had well over a thousand beta customers who were -- then they took what we initially built. They used it. They hammered on it. We got more feedback from them. We went back and changed it and revised it and updated it. And that's what ultimately saw the light of the day. So it's this product that's a great deal of focus group testing or not focus group -- beta group testing.
LARRY KLESS: Right. So basically, you gave them the features that they were asking for and then integrated into their workflow just basically to give them a solution that extends their workflow into content delivery.
PETER CSATHY: Yes, that's right. And then when we gave them kind of the straw man solution, they banged on it. We took their feedback. And then we refined it for the launch version.
LARRY KLESS: What's interesting, too, in one of our first conversations you weren't at liberty to talk about things that Sorenson was working on that was outside of your traditional area.
PETER CSATHY: Yes.
LARRY KLESS: And so how does this change the game? How is this game changing?
But the major expansion of business, our product portfolio and what it means for our business, it's an entirely new product category as software as a service, recurring revenue streams, not just a one-time purchase that we had on the Squeeze side.
LARRY KLESS: Absolutely. And then in terms of the actual delivery network, are you doing what some of the other companies do just in terms of your pricing? Are you farming that out to a number of CDNs? Is that something you're running yourself? Or on the back-end, how is that working?
PETER CSATHY: On the back-end, so we put out the all-in-one solution. On the back-end, we are plugged into Amazon Web Services, so AWS. But we can fully -- the way that we've designed it, you can fully work with any CDN. So if one of our customers already has an account with an existing CDN, we can just plug into that and it works seamlessly because that's the way we've built this thing.
LARRY KLESS: I've read too, about the fact that from a quality standpoint, your video delivery network is high definition video.
We disagree with that. And we're fully transparent. We're no hidden charges. Check out the other services. There are setup fees that are hidden. They charge you for the uploading of the videos. So not just the streaming down but the bandwidth to upload them because and I'll give [inaudible] why that is. And then, of course, a third differentiator is we've been in the business for 14 years and the fact that we are this trusted name. We've been profitable. We are proven. Whereas every other service in our space has been around for two, three, four, five years max.
So we're kind of like Allstate; you're in good hands with us at Sorenson Media. But the primary differentiator, so I saved it for last, quality, quality, quality is what ultimately matters for the video professional. It has to look as good as possible. What we do that nobody else does is client side encoding. Everybody else does server side encoding. We uniquely do client side encoding because we are the encoding expert. This gets back to the power of having Squeeze and the Squeeze heritage. Squeeze has been developed over years of time. We've always been considered to be the best in class. We have tremendous expertise in technology and a team that's built that. It's then the client that gives the video professional the control, the quality, the whistles, the bells that they need so that they can make the decisions. What formats do they want? They can make the decisions. When you're working with another one of the -- any of the other services, you send your files up to their servers; they make the decisions for you on things like output format, how they compress the files. They make the decisions for you. You don't have that control. We have the quality. We have the control that comes uniquely from the client side. And there's another substantial benefit to that; because the compression is done on the client, the file that you're sending up into the cloud is a compressed file. So it requires very little amount of bandwidth. And so we don't have to charge for that.
The reason why all of the other services charge, and it's a hidden charge for most of them, is because you're sending up the entire raw file to the servers for encoding. So that's a substantial difference. There's another important differentiator that comes from the client side. Because you've compressed and it's a compressed file, when you do upload it, it takes a fraction of the time that it does when you are uploading the raw file for the other service and their server side encoding. And if you're a video professional, that's a massive difference in terms of the user experience. So for all of those reasons, quality, time, cost and ultimately, quality, quality, quality, there really is -- we think it's game, set, match; we're the place to go.
LARRY KLESS: Slam dunk.
PETER CSATHY: You know, look, the great thing that we have is we have a substantial user base who know and trust us already. So we don't have to start from square one. We don't start at person zero or patient zero. And that's a great, great legacy to start from.
This ends part one of my two part interview with Peter Csathy. Look for part two of the interview tomorrow. Go to the Sorenson 360 web site for more information.
About Sorenson Media
Sorenson Media (www.sorensonmedia.com) offers comprehensive, award-winning video solutions that empower customers to easily and affordably deploy the highest-quality video across the Internet. Included among its products and services are the Sorenson 360 Video Delivery Network (VDN); Sorenson Squeeze, the gold standard encoding application; Sorenson Squish and SquishNet, an easy-to-use browser-based video publishing platform for user-generated content; and Sorenson Spark, the industry’s most widely used video codec, which today empowers the largest selection of Internet video on mobile devices and other consumer products. From its inception in 1995, Sorenson Media has been instrumental in mainstreaming Internet video, and is committed to dramatically improving the online video experience for content creators and consumers alike.
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