Sorenson Targets Brightcove in Updated Release of Online Video Platform Technology

Sorenson Media CEO Peter Csathy tells me it was always part of the company’s plan to introduce its digital media technology in the enterprise market, where big media and Internet companies enable Internet users to watch streaming video and TV broadcasts. Today the company with offices in Salt Lake City, UT, and Carlsbad, CA, is announcing just that.

Sorenson is introducing its Sorenson 360 v2 online video platform (OVP) for big businesses exactly one year after launching the Sorenson 360 platform in the market for small-to-medium businesses, with a focus on luxury tour and travel operators and advertising and marketing firms. Now, after gaining experience and putting some mileage on its system, Csathy says Sorenson is targeting the big media and enterprise customers that use rival online video delivery technology—a market currently dominated by Brightcove of Cambridge, MA.

Peter Csathy

Peter Csathy

Sorenson’s announcement coincides with the Streaming Media East conference that begins today in New York, and Csathy sounds like he’s spoiling to take on the industry giant and any other rivals. “We’re going squarely into space occupied by Brightcove,” Csathy says. He acknowledges that it’s a crowded space for the companies that provide online video technology to Internet video publishers. Other than Brightcove, Ooyala of Mountain View, CA, is probably the name mentioned most frequently, Csathy says. “After that, it’s an open game with scores of competitors—all small, VC-backed companies trying to gain market penetration, and none of them has established a business model that works.”

All the competition is emerging because the market for online video is booming. Nielsen Online reports that online users watched more than 11 billion streaming videos in September—a 25 percent game over the videos streamed in September 2008. Yet the rating service also says 139.3 million of those watching were unique viewers, a relatively small number compared with the number of videos shown. In other words, the global online audience still has plenty of room to grow, and with an estimated 79 video streams per viewer, the demand for online video technology is bound to increase dramatically among the world’s YouTubes, Hulus, and Yahoos.

So how does a relatively small company like Sorenson stand out?

“Our video quality has always been our calling card,” says Csathy, who describes Sorenson’s HD digital media technology as “professional grade.” He described the system’s advantages for enterprise customers in an entry posted yesterday on his Digital Media Update blog. Although the private company doesn’t disclose its financial results, he maintains that Sorenson’s “critical differentiation is that we’ve been around for a long time, and we are long-term profitable, with multiple revenue streams.”

It also helps to have the backing of James Lee Sorenson, the billionaire scion of James LeVoy Sorenson, a Utah medical device inventor and real estate mogul whose wealth was estimated at $4.5 billion when he died in 2008.

CEO Csathy says James Lee Sorenson was instrumental in founding what was then known as Sorenson Vision in 1995 to commercialize technology from the University of Utah that was developed for digitizing medical records. The family provided all of the necessary startup funding, although Csathy says Sorenson Media has been “standalone cash-flow positive and very profitable” for years. The codec, which proved to be ideal for encoding video, was licensed a few years later to Apple for integration into its QuickTime video technology, Csathy says. A subsequent iteration was incorporated in the Flash video technology developed by Macromedia and acquired by Adobe.

“It was natural for us to get into the video encoding space,” Csathy says, and Sorenson marketed its Squeeze software technology to video professionals “from wedding videographers to Time Warner-ABC.”

Csathy, who joined Sorenson as CEO about 15 months ago, is a Harvard-trained lawyer who came up through the ranks of film companies like New Line Cinema and Universal Studios before joining a startup in 2000. Two years later, it was acquired by America Online. He followed his tenure there as the president and chief operating officer of Musicmatch, an online pioneer in digital music that was acquired by Yahoo in 2004, and SightSpeed, which had developed Internet-based video communications services and was acquired by Logitech in 2009.

With today’s introduction of the updated Sorenson 360 OVP for Enterprise customers, Csathy has embarked on a strategy to challenge Brightcove, Ooyala, and other rivals to become the leading contender in the market for OVP technologies. The odds might seem daunting, but as Csathy puts it, “We’re in inning 2 of a 9-inning game…We’re in it for the long haul.”

Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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