Discussion on VSI from High Growth Stocks For 1998 thread:
Thought those on this thread would enjoy reading.
To: MF (49 )
From: PGI Friday, Dec 19 1997 12:38PM EST
Reply # of 58
>>One would think that if their solution does what they claim it does, and their product is available to the market in the beginning of the second qtr / 98, all the major players would be forced to switch over to this technology in order to remain competitive. <<
Maybe, maybe not. The costs of picking the wrong technology are often greater than waiting, see what catches on, and then jumping in. Besides, VSI won't be the first, products are available *now* that do this very thing. I guarantee that most of the major studios have at least 1 project utilising these technologies already. As to post-production facilities, they will use whatever system their single largest client uses, or whatever system has the largest installed base. That means if VSI can get a contract from, say, NBC to be NBC's system provider - then I'd take a look, becuase *that* would have a significant ripple effect. A standard would be set. Until then, until some major player makes a major (read: exclusive) commitment to a provider I'd be leery of any claims to potential market penetration, unless they have sales (not POs) that they can point to today to back up their claims for significant growth. This market is in it's infancy - research, research, research. Go beyond IR and ask tough questions, because their customer's are, and frankly, the people at my company have said they are often astonished at how little many of these companies understand our business.
Postage-stamp sized Quicktime video streams at 5 frames per second just don't cut it. Generally, most streaming technology is seen by our people as inadequate - given the massive amounts of data transfer rates that full screen, high-quality, full motion video demands - the best solutions are seen as those that require the images be transferred (via FTP or some such process) to the recieving party's local hard drive and manipulated from there.
My questions to you to ask them, if I'm transferring 10 minutes of dailies, what's the file size, how long to download, what's the picture quality like? Is it better or worse than VHS and how choppy is the video? 15 frames per second or better/worse? What kind of hardware (Intel boxes or low-end SGI boxes) and must the platforms be dedicated? What is the recommended connection to the net (T1 or 28.8 or are they copper)? How long does it take to setup a single installation?
I'd most like to hear management's take on the competitive enviornment they are living in... who's their 3 biggest competitors? What do they offer that other's can't (better picture quality, cheaper eqiupment, etc)? Who's the inhouse brains behind the technology?
It sounds to me this is a startup looking for a cash infusion... unless they've made a sale, they *know* the system works (not just from tests but from real world applications), they can give you a name of a posthouse or studio to verify their product's usefulness, and they can articulate their competitive advantage over existing systems I'd think twice about plunking down some cash for them, IMO.
- Patrick
RESPONSE:
To: PGI (55 )
From: MF Friday, Dec 19 1997 8:27PM EST
Reply # of 58
Excellent thought pattern Patrick. It inspired me to forward your response to the company and the following is the response I received:
1st Paragraph
Our solution does what we say it does. The product will be ready for release early 2nd quarter 98, late 1st quarter 98. All the major players will hopefully be using this product mix as there is no comparison to our technology and price point. There may not be a necessity for a hard "switch" of technology, integration and enhancement implementation may occur offsetting a large capital expenditure and creation of "out of date" equipment.
2nd Paragraph
Jumping in vs Waiting. Network pricing is not an erratic schedule. Unlike the current PC market, network costs will remain relatively consistent as time goes on. In most cases prices will rise as "real estate" (fiber optic placement having increasing costs due to integration, construction and management i.e. labor costs rising as time passes. The NICB costs may decrease slightly over time due to volume pricing, however, given that we are in the business of making money-the increase in profit should help our bottom line / stock price.
I would not guarantee that all studios employ this technology at this time as our own market research and independent market research studies indicate (i.e. Feasibility study). As far as large contacts and contracts are concerned, we have signed letters of intent from a number of large production houses. We also have signed reseller agreements with studio electronics resellers who have the household name studios as their clients.
The market of Video Stream International Inc. is in its infancy, however, there is no research, research, research. At VSI we have gone public to build, build, build and sell, sell, sell!. We understand both sides of the fence (Market and Product) and would encourage any questions about our market plans and integrity as well as questions on the nature of our product mix / revenue stream.
3rd Paragraph
We are providing 30 frames per second, two way , live video streaming while simultaneously video conferencing as a FULL SCREEN-SIZE APPLICATION!!!!. The daily images are viewed in full motion, high quality, live video.
4th Paragraph
If you are transmitting 10 minutes of dailies on a network capable of 10 Megabytes per second (Mbps) the transfer should only take a few minutes. However, the technology we are implementing is Video Streaming ie. The film daily is not "downloaded", it is "Streamed" to the NICB owners residence assuming NO hard drive space at all --- The NICB is a streaming device, not a PC with a hard drive. The dailies are stored on our secured, encrypted password protected server farm . Our platform is Power PC which can operate on all major operational levels i.e. Microsoft, MAC, etc. Our network is Proprietary NOT DEDICATED, allowing us to take full competitive pricing advantages of bandwidth suppliers. WE ARE NOT AFFILIATED WITH THE INTERNET!!!!!. Access to the "VSI Network" is only available to those individuals with the NICB. The recommended bandwidth will well over the 28.8 range - minimum level is ISDN. The specific network requirements and calculations are part of the caramilk secret and are on a need to know basis. Installation is based on the network requirements of the studio. Mr. Disney may have a longer network installation time with numerous NICB's at each studio location. Al's studio barn may take as little as 3 weeks. Mr. Disney (as an example) may take approx. six weeks.
5th Paragraph
The competitive advantage of VSI is the market in itself. There is only one major telecommunications / service that we are aware of that even resembles the principle of live video transfer. They are a local company that provides one-way broadcast (NTSC Signal) video to the US. Our prices are a fraction of the competitors and we also offer simultaneous video conferencing on the same network. We have a large technical team with over a decade of technical experience. Our hardware prices are also a fraction of our closest competitor.
6th Paragraph
Our test bed will be setup by Feb 98 and letters of intent transferred into PO's. At that time the "word" that we are shipping systems will have a dramatic effect on the market. If you are curious if our technology works, feel free to come in to our offices and see a demo as many people with technical backgrounds did during the Alpha & Beta testing of the system.
We will not give you the name of the Production Studios that have issued VSI a P.O. as we have very little interest in having some potential investor phone our Studio asking hundreds of questions about us.
Please call us direct if you have any questions.
604-688-0108
|
