Tuesday, September 22, 2009

CEO Conversations: Peter Csathy, Sorenson Media's Digital Media Mastermind

Since Peter Csathy took the helm of Sorenson Media as President and CEO, the 14-year old company has expanded the capabilities of its core customer base by launching an easy-to-use and cost effective video delivery network, Sorenson 360. By combining Sorenson Squeeze encoding tools with Sorenson 360, small and medium sized businesses (SMBs) and video professionals, have a dedicated workflow that extends into online video workflow. According to Dan Rayburn, EVP of Streamingmedia.com, who spent several months reviewing the product a hands on review, he said, "Sorenson Has A Winner With Their New 360 Video Platform." Dan provides a thoughtful review and gave Sorenson 360 a rating of 4.5 stars out of 5 and noted that Sorenson 360 was designed to address the needs of the SMBs and bundles all the key services including transcoding, storage, delivery, analytics, player customization all within an easy to use system.

Here's a brand new About Sorenson Media video, that makes an exclusive world premiere right here on this blog, in which Peter illustrates the key features and benefits of the Sorenson 360 video delivery network.

The following is recent conversation I had with Peter to catch up on the latest developments at his company. He also shares his perspective on monetizing of online video, the importance of high quality video encoding and what differentiates Sorenson 360 from the offerings of the many online video platform providers in the space. This is part one of the two part interview.

Larry Kless: I was just on your blog and I saw that, It's Official -- Sorenson 360 Now Features Secure Vid Review & Customizable Player Options, was that the announcement, could you explain that product launch?

Peter Csathy: Yes it was so just yesterday we introduced we significantly enhanced Soresnson 360 into the marketplace and it's a good day because the reception to date has been great couldn't ask for more.

Larry Kless: You also mentioned in your blog post that there was some critical differentiating reasons why Sorenson is in this crowded marketplace could you go into that then and then maybe talk about it but even before that what's so important about those new features?

Peter Csathy: So with respect to Sorenson 360, what we introduce yesterday there were really two primary features but from other important enhancements and we've addressed these very quickly from our initial initial launch back in May because our customers and prospective customers were really looking for these features and it surprised us that many of these were much larger groups of SMBs then we originally anticipated so that's a very good thing, and the two features that they wanted most were secure review and approval. So what we implemented is this secure password protected video. So now let's take an ad agency for example they can have their videos, they can then share them with their clients in a secure format and their clients are comfortable sharing this and they can then collaborate directly around that video in a way that makes them feel very comfortable.

So secure video with password protection was an important part of the launch yesterday. The second major enhancement is the fact that we introduced customizable players so now, as an example, video professionals and SMBs can add their own logos, they can choose the buttons and what they want on the players, the look of the players, the feel of the player and this was something that was requested very heavily from the users and prospective users. So those were the two major enhancements yesterday that quite frankly customers asked for so we listened to that and put it on the fast track in terms of development.

Larry Kless: When we've spoken in the past you described that with the launch of Sorenson 360 that you've been really in tune with your customer base and it's clear that you continue to keep in tune with them and to make enhancements based on customer demand and make it easy for them to publish a video online.

Peter Csathy: This gets back to your question about differentiation and how we look at the overall publishing market. There are a number of players and participants and it's a growing list of companies that are addressing this video publishing market and this tremendous opportunity is available to all. You know you go from companies looking to address needs of the consumer and then those who are addressing the needs of the enterprise and then there's this square in the middle where we have the SMBs, what we call the video professionals. That's our bread and butter. We know those customers, those SMBs and video professionals because we have been working with them for years and years and years. So we have an ongoing relationship with them because they've been using Squeeze for years and this is a customer base we know.

With this massive existing customer base of Squeeze users we are able to create products around them based on what they're looking for and they told us what they were looking for and that's what the genesis of Sorenson 360. The major differentiator of ours versus other players in the marketplace is that we are singularly focused on meeting the needs of the video professionals, the SMBs and we have an existing massive customer base of video professionals who are hungry for this kind of service and so we're able to provide this all-in-one one solution to them now. That's significant when you look at us versus other players in the space in that we bring quality front and center as part of Sorenson 360. And what I mean by that is that is we uniquely, I'm not aware of anybody else who does this, we uniquely can bring the power and quality of client side encoding through the equation and we bring that into Sorenson 360.

Larry Kless: Yes, because when you do all that encoding in the cloud you can't control your quality. I haven't seen any online video platform that actually publishes what their encoding specs are and actually gives you access to changing those settings.

Peter Csathy: That's right and for the video professional, the best quality is going to come from the control that they will have on the client side to adjust it precisely the way they want it. So we are able to uniquely say that Squeeze is already known as best-in-class, the gold standard when it comes to video encoding. The full power of Squeeze and client-side encoding is brought into Sorenson 360, it's brought into it in two different ways. You can have Squeeze the separate application that's seamlessly integrated into Sorenson 360, or for those who don't need that much control and power, they just want it be as easy as possible but they want the full benefits of the Squeeze client-side encoding engine. We have browser-based client-side encoding as part of Sorenson 360. So you don't need the separate Squeeze application. And it's simple drag-and-drop but it's all the power of client-side encoding so it is that control area you mentioned but it's also several other significant benefits.

So you've already compressed the file locally so when you're sending that into the cloud it's much quicker and it's done in a fraction of the time it would take it come from in front of the time that it would take using other solutions on the server side. And there are also significant cost benefits that come from that because you're not using bandwidth on the upside, just when you stream the video down so our operating costs are significantly less than other services and we can pass those savings onto our customers.

Larry Kless: Let's talk a minute about quality. I was looking at your blog post, For Video Professionals, It's the Encoding Stupid! Their Quality Content Is King, and I think about that in terms of one of your most recent posts about the video Amazon CEO Jeff Bezo just posted, Amazon's Bezos Uses YouTube to Explain Zappos Deal - But, C'mon, THAT Vid Quality? So you've been talking about how important video quality is in the value that everything we've just talked about brings to your core customer but then also to the consumer side. Could you talk about that and how high concept/low tech and poor encoding isn't always a great equation?

Peter Csathy: Yes absolutely so what your referring to is the video that Jeff Bezos and Amazon just posted yesterday on YouTube to announce a justification for the Zappos deal, and let's talk about a couple of things. It's quite a revolutionary way to do describe a business decision and you'll see much more of this. So what Bezos did of course is publish it on YouTube for the world to see because the intention was to make it as viral as possible. That's great for everybody in the online video game because that shows you the unique power of Internet video and the power ultimately come from getting massive buzz, massive distribution and making it very viral creating that kind of excitement in a way that no other forms of distribution can. That was a smart smart move by Amazon.

Now getting back to the quality issue and where quality matters. Whether you're a business that's huge like Amazon, a small medium business, video professional or consumer you still have the same goals of getting as massive distribution you want your videos to be seen by as large as a group of folks that you can and ultimately that will come down in large part to the quality of that video because without an optimal experience viewing that video you are sub-optimizing the overall distribution.

So while Amazon gets high high marks for uniquely coming up with this way of getting the word out on the Zappos announcement, it's very surprising to me and to others within our organization that the marketing team allowed the quality to be as poor as it was and in that video and because that is not getting the message across in the way that anybody would like to get across which it was the highest quality.

Larry Kless: I agree, and late last night I started a blog post about it and I looked all over the news, I checked Techmeme and the echo chamber was filled with talking about the deal but Dan Rayburn and you were the only people I saw talking about the video quality. So I saw two posts about it that commented on video and it is again, as you said too, is that it's a uniquely powerful way to use video when you've got the head of the company using video for viral marketing but the quality was extremely low, it was shot outside, there's lots of motion who knows what camera they used and it looked like it was done for $1.98.

Peter Csathy: It does look like it was done for $1.98, and the production itself, that's not the problem in fact as I commented on my blog the folksy nature of it is precisely what the marketing team wanted to do because that Amazon's shtick in the first play and it worked for them very effectively. But folksy really doesn't mean and shouldn't mean poor quality, and I'll give you a small real-world example from our own company.

When we announced the ability to view all of the videos from Sorenson 360 on an iPhone, that was a recent announcement about a month ago we shot in the course of thirty minutes of video showing the power of that just using a Flip cam, and I was outside with no special equipment at all, no special microphone just the microphone from the Flip cam. I was walking around the city of Carlsbad explaining it and if you look on our web site you can find that video and although we've done it for no money whatsoever, so for $1.98 if you will, the quality that video is pristine precisely because of the encoding and the power of the Sorenson 360 engine.

So that's the difference, low-tech in terms of production, that's the power of what all the tools that are around us. You don't need to have the heavy machinery in terms of creating great quality video but you do need the right encoding solution because that's where it comes from and that's what was lacking in Bezo's case and that's why it failed to optimize. Because look, they're trying to do what all these businesses who use online video and who understand the promise of it. They want to do is to build their businesses, monetize them better and more effectively than they have been able to date and ultimately the monetization question from online video comes down to that. For 95% of the businesses out there, it's not about ads and pre-rolls and post-rolls because they're not selling their videos themselves, they're looking to build their businesses, monetize their businesses, sell their goods and services market more effectively to the customers showcase their products much more effectively to their customers and prospective customers then they have been able to date. That's what online video does for them and that's the monetization question for them.

Larry Kless: It's a great discussion and we're looking forward to your participation in the Online Video Platform Summit in November.

Peter Csathy: Thank you, I do believe that the question of monetization of Internet video is tremendously misunderstood and proper focus isn't out there in the collective consciousness. And this gets down to what Dan Rayburn pointed out several times in what I'm pleased to say, his glowing review of Sorenson 360 and I appreciated that. As he pointed out as an example, we are not competing with a company like Brightcove. We don't see them as competitors. We’re in the same space but we're just addressing different market segments. So for our market segment, the video professionals this gets back to the point of when 95% of the businesses out there are looking to monetize their businesses not their videos themselves. They'll showcase their videos perhaps but sell their services. SMB that’s what they're trying to do, that's who we're targeting. So for these customers, we know who they are because they're Squeeze users and they told us that pre-rolls, post-rolls, that toolset is much less important to them from a prioritization standpoint the features we're talking about.

Quality, job one but all the things that we've introduced into the market yesterday for example, secure workflow, customization, all of that and so the reason why it's different gets back to the point of they're not looking to monetize the videos themselves but their services, their products her and that's the appropriate question to them in terms of monetizing online video

Larry Kless: Hear hear! (laughs)

Peter Csathy: There's a preview what I'm so passionate about and that's what I'll be discussing on the panel at the Online Video Platform Summit.

End of Part one. Stay tuned for Part Two

You can stay current on Peter's myriad of media and technology musings on his blog, Digital Media Update.

About Sorenson Media, Inc.
Sorenson Media, 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.

Updated 9/23/09: Corrections to transcribed text.