Excellent OFST synopsis... Featured Article (08/14/99):
A QUEST FOR RESPECT
Having developed an out-standing product, which is getting raging reviews including in Time Magazine, along with awards from Corporations such as Microsoft and more importantly signing deals across the nation day after day, kept management and investors asking themselves, why NO R-E-S-P-E-C-T, NO RESPECT. They have watched the stock price languish below one dollar in recent months.
In what follows, I am going to talk about Objecsoft Corporation (NASDAQ: OSFT), by looking at the need for product in the market, explain how it works, how it generates revenues, recent awards/featured articles,
impact its already making, recent signed deals/progress todate and then mention what's brewing and discuss what's in future and competition.
Part I: THE NEED:
Every store worries about managing inventory and providing information of their library catalogs to customers. That's no different for video stores. Thousands of movie classics sit on the shelves untouched while customers mechanically scan the new-release aisles.Even when customers want to rent older movies -- which typically
comprise 70 percent of a store's collection -- finding the right one can be an off-putting task. Catalog titles represent a tremendous profit margin for movie studios." I don't think we really understood that our [movie] library was intimidating," Hodge Tutun of Blockbuster says.
Additionally, with the recent launch of video e-tailers online, there is more pressure, than ever before, for traditional video stores to fill the gap and catch up with point and click browsable online e-stores.
Statistics from 1998 show that there are 65,000 video stores in the United States and another 10,000 in Canada. In addition, all most all the supermarket stores across U.S. have section for selling videos.
How many times you thought, wish I could see more than just a picture on the box cover before buying or renting movie.Yes, your dream becomes a reality!
Part II: THE PRODUCT:
FastTake video kiosk contains a searchable database of movie titles, DVD quality trailers, and other information to help customers find films they might not otherwise rent or buy. When customers first approach the FastTake video kiosk they are presented with a number of menu choices including Find A Movie, Just for Kids, and Editor's Pics, Current Videos, Coming Soon, and New Releases. A customer using the video kiosk makes his selections by using the intuitive touch-screen. "A customer does not have to be computer literate to use FastTake. Within 60 seconds he will know where to push on the screen. It's just that simple to use. Customers can enter the interface at
any time and search by title, genre, or actor, or by categories such as classics or children's movies. When someone clicks on the hyperlink for a given film, a still shot or trailer is retrieved from the database. When the kiosks are not in use, it plays a loop of approximately 20 trailers. The name FastTake describes the customer experience-it is immediate. There is no waiting to download movie clips or images, it is done instantly. Its not possible for e-tailers to provide the same service because of huge download times. Currently Fasttake video kiosk allow consumers to preview 500 movie trailers, search up to 7,500 titles, and will soon be able to receive drop shipment to the home or workplace through e-commerce and online transaction capabilities. "The capacity of the unit is 4,000 trailers with 4 DVD drives; we currently have two, and we are building the capacity every month. We are increasing our data base very dramatically very soon, and we should then have about 20,000 titles and a bit later another 17,000
special interest titles" Sarna CEO of Objectsoft says.
Objectsoft provides retailers with monthly updates to the database, advertising opportunities, point-of-purchase promotions, demographic targeting and studio/retailer cross promotion.
Installation and field service are provided by IBM Corporation. Platform technology is provided by Microsoft Corporation. What makes the unusual economic model viable is ObjectSoft's LOW development costs. The kiosk's futuristic design -- shaped like a robot -- belies its use of inexpensive technologies such as Microsoft Internet Explorer and DVD media. Microsoft Visual Basic programming transforms the IE display and HTML links into a user-friendly touch screen. More importantly, the computing under the covers -- a Microsoft Windows NT server tuned for the task -- requires little or nomaintenance by store employees, according to George Febish, president and co-CEO of ObjectSoft. "The only thing the store has to do is upload new DVDs," Febish says. "Nobody is adding new software or drivers. It's a very controlled environment."
Part III: REVENUE:
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Revenue, for the kiosks in service for more than 30 days, currently stands at $5,000 per kiosk. Each kiosk has the
potential to earn $12,000 a piece should all advertising opportunities be used.
Part IV: AWARDS/FEATURED ARTICLES:
- ObjectSoft's FastTake(R) Internet Kiosk Featured as Success Story on Microsoft Website
FastTake, which utilizes Microsoft development tools, was highlighted as an example of exceptional use of Microsoft products, according to David E.Y. Sarna, CEO of ObjectSoft. The case study can be viewed using
the URL:http://msdn.microsoft.com/vbasic/prodinfo/casestudies/objectsoft/default.asp
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As featured in Time Magazine:
pathfinder.com
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- AUG 12,99:ObjectSoft FastTake Kiosks Selected for Roadshow '99
biz.yahoo.com
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- Jan 14, 1999
ObjectSoft's FastTake(TM) Internet Kiosk Featured
at Visual Basic Insiders' Technical Summit '99
- As Featured in INFOWORLD
infoworld.com
In addition, Fasttake product has been featured in Investor TV show in Silicon Valley,Knoxville News,New York New Day and several other New England area news papers.
Part V: IMPACT:
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Besides boosting rentals of movies that have expired from the new release shelves, the kiosks also help sell excess inventory. For example, Blockbuster might purchase 150 copies of a movie when it comes out on video. The store can recoup some of that cost, which can run as high as $60 to $70 per copy, by selling it as previously viewed.
The kiosks help move that excess inventory in a more efficient way than having customers rummage through cluttered bins full of videos, Hodge Tutun of Blockbuster says.
"I've been in the business for 14 years, and we just hadn't entered the software age," Hodge Tutun says. "I don't think we knew how big the demand for something like this was until we got it in the store and people were lined up to use it."
''For June, field data revealed that 38% of the top 50 titles requested were catalog titles, emphasizing FastTake's power in moving the backlist, the most profitable sector for video retailers.''
''Catalog titles represent a tremendous profit margin for
movie studios, and 32% of the top fifty titles searched on FastTake were catalog.''
'We have been very pleased with the results of the four FastTake video kiosks we have had in our store since March, FastTake has increased our member interest and rentals,'' said Holly, Director of Operations for NY/New England Video, a Connecticut-based franchise of Blockbuster Inc., an indirect subsidiary of Viacom, Inc.
"Continued growth in usage demonstrates that FastTake provides the public with a new resource that is fast, informative and reliable".
Aug 11, 1999:ObjectSoft Reports Ten-Fold Increase in Usage for
FastTake Since April.
Part VI: PROGRESS TODATE:
Oct 7, 1998
Coming to a Video Store Near You! ObjectSoft Corporation and Plaza Entertainment Unveil New FastTake Video Kiosk at East Coast Video Show
Nov 5, 1998
Objectsoft's FastTake Video Kiosk is Coming Soon to a Video Store Near You; Retailer Interest in New Product is Promising
Nov 16, 1998
ObjectSoft Delivers Electronic Commerce Over Internet to Retail Stores Everywhere
Dec 3, 1998
ObjectSoft Expands FastTake Video Kiosk into International Markets by Exclusive Distribution Agreement with Diamond Cove Entertainment
Feb 3, 1999
ObjectSoft Increases Orders for FastTake Kiosks from 30 to 100 to be used in pilot programs around the country.
Feb 16, 1999
ObjectSoft and Instant Replay Video Bring FastTake(TM) Video Kiosk to Pittsburgh Marketplace
Feb 18, 1999
ObjectSoft Corporation and Entertainment Zone Video Bring FastTake Video Kiosk to Connecticut Marketplace
Mar 4, 1999
ObjectSoft's FastTake Enters New York City Market with Champagne Video and Video Room
Mar 9, 1999
ObjectSoft Launches Multi-State Series of On-Site Tests for FastTake Video Kiosks
Mar 11, 1999
ObjectSoft Signs Marketing Agreement with PolyGram Video
Mar 15, 1999
ObjectSoft Enters Marketing Agreement with Full Moon Releasing
Mar 16, 1999
ObjectSoft Enters Marketing Agreement with Plaza Entertainment
Mar 24, 1999
ObjectSoft Corporation Signs Distribution Agreement With Central Park Media
Apr 1, 1999
ObjectSoft's FastTake Kiosk Lands Deal with Country's Third Largest Video Retailer
Apr 16, 1999
ObjectSoft Signs Five Additional Retailers for FastTake; Growth is Swift; Now 20+ Locations Nationwide
"By the end of the July, we will have signed agreements completing our commitment of 100 FastTake kiosks across the nation ahead of our projected schedule,'' said Ray Schwartzman, Vice President of Sales and Marketing.
Apr 20, 1999
ObjectSoft's and Blockbuster Franchise In Deal for FastTake Video Kiosk; Connecticut Franchise Brings FastTake to Four New Markets
May 6, 1999
Fattake kiosks already installed in retail locations were used 30,000 times during the month of April.
Jun 2, 1999
Blockbuster Franchise Expands FastTake Video Kiosk to All 18 Locations; Second Blockbuster Franchisee Signs On
Jun 10, 1999
ObjectSoft's FastTake(R) Video Kiosk Usage Up 127% for May;
Jul 20, 1999
ObjectSoft's FastTake Penetrating Marketplace with Additional Orders; Three More Blockbuster Franchises Sign
Tuesday July 20
Wegmans Supermarkets of New York have placed orders Fasttakes.
"Having Wegmans Supermarkets accept our FastTake is as important to us as our first Blockbuster franchise,'' commented George Febish. ''Wegmans will be our use the FastTake in a point-of-purchase fashion. We are confident their results we be pleasing and, as Blockbuster franchises across the country, additional supermarkets will follow suit.
Aug 5, 1999
ObjectSoft Signs Fourth Largest Video Chain to FastTake
Aug 5, 1999
With the addition of Video City, Objectsoft now have four of the Nation's five largest video retailers on board for the FastTake kiosk,
"We are clearly tracking ahead of our business plan to place 400 kiosks into the market during 1999,'' said George Febish, President and Co-CEO of ObjectSoft Corporation.
Aug 11, 1999
ObjectSoft Reports Ten-Fold Increase in Usage for FastTake Since April.
Part VII: What's Brewing
In addition the above official releases:
According to Ray Schwartzman, VP of Sales and Marketing
"We are currently in four different Blockbuster chains, Movie Gallery and another major video chain that I cannot mention yet. This chain already has one of our kiosks in their employee lounge and I expect to be giving them ten kiosk to test very shortly". (looking at the installation as shown in website, it looks like Hollywood video)
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According to Ray Schwartzman, VP of Sales and Marketing:
We put our first kiosk in a major video retailer, but were not making an announcement yet about this one. Soon however!
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We also got a verbal agreement from a major Hollywood studio who will be paying to have their titles promoted on FastTake.
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we are beginning to develop a relationship with General Mills who may want to advertise on FastTake.
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Sarna, CEO of Objectsoft Writes
"the earliest chain to try us was the blockbuster franchise in NY - CT that has signed up for all its stores. Though we haven't announced it yet, several other chains of franchisees have also signed up. We are in detailed negotiations for the placement of several thousand kiosks, as a consequence of the very successful experience that stores are having with FastTake"
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According to Ray Schwartzman, VP of Sales and Marketing:
"We are currently in four different Blockbuster chains, Movie Gallery and another major video chain that I cannot mention yet. This chain already has one of our kiosks in their employee lounge and I expect to be giving them ten kiosk to test very shortly".
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According to Sarna, CEO of Objectsoft:
"We derive most of our revenues from studios, either through barter or cash transactions. While we have been quite successful in attracting some major studios to our kiosks, they have been unwilling, to this point, to agree to do press releases. There are a number of reasons for this. One studio considers this type of information proprietary. Another wants to be "sure" of the result before being publicly identified with us. And so on. You should start to see prominent studio sponsorship on our kiosks beginning in October".
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According to Ray Schwartzman, VP of Sales and Marketing:
"Blockbuster corporate with 3,200 stores is aware that some of their franchisee's have FastTake and are looking for feedback. Potentially any one of these major chains could say they want FastTake for all their stores! We
could be getting orders for thousands of FastTake kiosks!"
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According to Sarna, CEO of Objectsoft:
Finally, We still expect to be able to announce in 1999 a deal for placing about 1500 units in one large video store chain. There is a deal now, but it won't be announce able for 90 days.
Part VIII: FUTURE:
The FastTake video kiosk is really a retail kiosk, and by changing the graphics that show up and the database that controls the site, it could be retailing cars, or music CDs, home electronics, anything at all-without changing a line of code." Thanks to the flexibility and reliability of Visual Basic, the future potential for the kiosk to enter a myriad of retail markets and flourish with absolutely no more development time appears to be infinite.
According to Sarna, CEO of Objectsoft:
"We have an artist's layout and first-cut screen layouts for a digital music kiosk. However, given the very strong demand for FastTake and our limited financial resources, I don't want to divert any resources from FastTake until we have 1,000 FastTake units in the field (critical mass)"
Part VIII: Competition
According to Sarna, CEO of Objectsoft:
"MUZE(provider of music kiosk) today is more interested in Internet and less in kiosks, and they have offered to license their data base to us, which we are now evaluating, along with another very comprehensive data base. In video, we have a clear advantage, as MUZE does not offer trailers. In Music, we are working on a similar advantage, but it is very highly confidential right now.-
If this is not big enough, I don't know what is
geocities.com
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