The margins of big entertainment events are eroding under high costs as smaller venues are finding media outlets too expensve for their specialized content, but a local company is applying the latest technology to help both groups achieve success over the Internet.
Although the Internet and video streaming aren't exactly new, Las Vegas-based iStreamPlanet has simplified the layers of complexity for playing to the Internet market profitably into two easy steps.
By securing the transmission from the piracy that has burned many, particularly the music industry, iStreamPlanet has turned the fragmentation of the media market to the advantage of the provider, allowing any production, from concerts and music releases to lectures and weddings to find a profitable niche among the 450 million Internet consumers worldwide.
The company has developed numerous products in its four short years to tap into the city's extensive entertainment, convention and other venues looking to expand their reach. Nailing down two deals in the past month, iStreamPlanet officials believe the company is poised for rapid growth not because of its innovative use of the latest technology but because of its old-fashioned approach to business.
"With new technology, there's always going to be someone who says 'This is hot. Let's turn some product around and sell it and make a quick buck'," says Mio Babic, president of iStreamPlanet. "Our position is always to make the long term relationship. Our [goal] is not to replace existing businesses but to find an existing business that's successful and broaden their market potential. That's the value proposition from our end."
Formed just before the pop of the technology bubble in 2000, iStreamPlanet started modestly by providing live Internet transmissions of marriage ceremonies at the Little White Wedding Chapel to interested family and friends across the country who could not attend. The concept quickly attracted attentio and iStreamPlanet entered into similar arrangements with other wedding chapels in the city.
To get the word out, the company began providing the service, sometimes at no- or minimal cost, to various city organizations such as the Chamber of Commerce, the Las Vegas Convention and Visitors Authority, the Convention Center and the city itself. By late 2001, iStreamPlanet was able to get its services bundled within the product offerings of telecommunications provider Smart City, which holds contracts with 12 convention centers in the country and Disney World in Orlando, Florida.
Breaking into the lucrative convention market was a deliberate step as the attendance figures, but not the appeal, for shows declined in the wake of the September 11, 2001 attacks.
Initially hitting it big with the convention center in Orlando, which accounted for 75 percent of the company's convention show revenue stream in the early stages, iStreamPlanet has grown strongly here, streaming portions of the CD Expo, COMDEX and the International Association of Amusement Parks exposition across the Internet in the last month alone.
"Getting into conventions was my idea," Babic says. "You pick a niche that you know makes money and grow from that. We built everything off our revenues."
Building his company's profile while plowing back earnings into the company, iStreamPlanet has developed a host of other products to penetrate the cornucopia of market segments available here.
Among its inventory, iStreamPlanet created an on-line training program in June 2002, named the "Knowledge Platform" that allows companies to provide training classes and seminars to employees, contractors and others across the country on demand and at the convenience of the busy viewer as well as track the effectiveness of the training through interactive testing.
"All this for $20-$30 [per person]," says Babic. "Compare that to $1,500 [for live training]. But if you use tape, what guarantees are there that I'll put the tape in the VCR and even if I do, that I'll learn anything. We offer convenience, cost reduction and the ability to track results. That's what any business is about. We hope to take this platform to other markets."
The company has found particular success with the product in the insurance industry, signing a contract with Guardian XXXX and recently bidding for a contract with airplane manufacturer Boeing.
In addition to the live training, iStreamPlanet also created PayCast in April 2002, which offers live or on-demand transmissions of events over the Internet. In May, the company transmitted the 2003 World Series of Poker Championship Match live from Binion's Horseshoe Hotel and Casino.
Accounting for 30 percent of iStreamPlanet's revenues this year, Babic said the division is set to expand rapidly in a city known for entertainment and shows around the clock.
"Paycast is the fastest growing segment of our business," he says. "How many special events, concerts and sporting events are out there? Why not take the same concert and put it on the Internet and give the world a chance to see it and pay for it? There's got to be tons of other people who want to see it. If you sell an extra 50,000 for $20, that's $1 million."
The company's portfolio of video streaming products for live, on demand and download products has generated interest here and elsewhere. iStreamPlanet has closed two deals since Thanksgiving, one to transmit South American programming on demand for the Spanish language SUR Channel and another to transmit the Mazda show at the Mandalay Bay Convention Center in January.
Babic added that the company is in negotiations with 15 other major corporations for transmission contracts but declined to name them.
"Getting over the hump is the hardest part," he says. "We're right there. I think the first quarter of 2004 is when we'll really see the results of all these relationships."
The success has been based on the company's ability to make its product easy to use for both clients wishing to transmit over the Internet and end users wishing to view the content. Just as importantly, iStreamPlanet uses Microsoft Media Digital Right Management to insure no one can illegally infringe on the broadcast and thereby, the client's profits.
"We're one of five companies licensed by Microsoft to do secure live events," he says. "Out of those five, we're the only ones who made money. We built propriety equipment that integrates 30 steps into two. We put multiple programs and systems into one seamless product that is as easy to use as selecting an event and pressing a button. Now, people who have never used a computer know how to run our system after five minutes [of training].. Our product is automated and self-autonomous. There are no technicians and no need for intervention. You don't need 30 employees to facilitate it."
Offering videotape quality transmission currently, Babic says the transmission capabilities of the Internet have not kept pace with equipment to move it, adding that he expects that to improve because the more effective broadband transmission is expected to gain a 40 percent market share by 2005.
"We can go as good as HDTV but the Internet has not caught up," We now have VHS quality and within a few years, we'll have DVD quality."
As the transmission capacity increases, so is the competition. While Internet giants like Yahoo! and MSNBC are entering the video streaming contest, Babic believes their very size will allow him to maintain his lead, which he estimates is about nine months in terms of development.
"Where they're big, we're small," he says. "We can adapt faster and at less cost. Because they're big, they can get contracts on big lines. But by the time they redesign something, we can do it three times already. The vision is there. We know how to create products. The only challenge is not having the resources to capture large clients in different markets."
The hunt for market share might dampen efforts to bring new products into the light. For instance, a music program created this year by iStreamPlanet which allows artists and recording industry producers to test market new music with consumers and even sell without having to risk fortunes in recording contracts and promotions has yet to get exposure.
"It's a tradeoff," he says. "We really have several business models that have tremendous opportunity to sell and capture market share. In some we have more established relationships. If we focus on them and get success, we can channel the resources to other segments. Are we taking a huge risk that someone else will come? We definitely are but it is a business risk that we have to take. I can't focus on it right now. We might regret it six months from now but at this stage, we allocate resources based on our priorities."
Those efforts could get a boost by dropping less valuable commodities, such as the wedding segment, which now accounts for only five percent of company business from its heyday as the sole product. With relationships the primary vehicle for the company's drive, Babic believes their integrity is the ultimate destination of the journey.
"There is a sentimental value," he said. "It really started us. I get letters from people saying thank you very much. One from Scotland, for seeing her grandson's wedding. It has intrinsic value and not just X amount of dollars."
[via iStreamPlanet]
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