Owner-Oriented Investment Research and Commentary - Have a private comment or question? Email us at commonstocksense@gmail.com

Tuesday, August 24, 2010

Webcasting Redux: Did Your Firm Get the Mediasite Memo? An Objective View

By now, most of us have watched (or listened to) hundreds or even thousands of Webcasts, whether for investment research, training, education, continuing education, or for any number of other reasons (see 102 uses for Mediasite). Few would debate whether Webcasts and other forms of online video are here to stay, or whether all of us will watch more and more events online over the next five years.

As the market grows and matures, the viewing experience will no doubt continue to improve. YET, surprisingly - to this day - the average Webcast offers limited or even disappointing functionality and performance. At the risk of sounding like a broken record: THERE is a better way. This post is meant to serve as an additional check on our implicit subjectivity as an owner of Sonic Foundry (SOFO). We always strive to be objective in our research.

In January, we shared Who on Earth Needs Mediasite?, positing that everyone can benefit from Sonic Foundry's Mediasite solution for Webcasting all kinds of events -- from schools to corporations to government organizations to hospitals and all of their respective end-users. In that post, we included a number of links to various events for readers to peruse and objectively evaluate different platforms relative to Mediasite.

Among the alternatives, we included Thomson Reuters (TRI), PR Newswire's "MultiVu" /VideoNewsWire, ON24, TalkPoint, Veracast, Wall Street Webcasting, Accordent, and even Cisco's (CSCO) WebEx solution. We see a wide disparity in the quality of the end user experience from these various platforms, especially relative to Mediasite.

As an example, while WebEx may be optimal for group collaboration, we see the solution as suboptimal for lectures, town-hall-type CEO presentations, conference events, or any other
one-to-many situation. Further, we surmise that most viewers would prefer to not see the extraneous WebEx pop-up window that says:

"Playback in progress - Do not close this window, refresh this Web page, click Back or Forward, or click a URL in another window. If you do so, playback will end".
In late July, we again mentioned out that countless Webcasting companies and even Nasdaq's (NDAQ) Shareholder.com unit could use Mediasite. Here, we shared Microsoft's (MSFT) Analyst Meeting that was Webcast live by Shareholder.com -- video only, no synchronized slides (slides available via separate download):

The Shareholder.com approach only features the active video box and all other "boxes" are still images.

Likewise, another example comes from the quarterly conference calls of video gear maker Polycom (PLCM), which uses Visual Webcaster from Onstream Media (ONSM). Here's a snapshot from the latest call in July:

In this case, the slides pop up in successive, separate windows and, like Microsoft's Analyst Meeting, the "POLYCOM" window above is static.

Finally, we watched the proposed Intel (INTC) / McAfee (MFE) acquisition Webcast live last week, which provided yet another example of the shortcomings of most Webcasts. The audio-only Webcast launched pop-up windows for each slide, leaving a number of excess windows open on our PC toward the end of the event:

BTW, looking more closely at this slide -- based on data from Cisco Systems -- please note the expected growth in video traffic (not necessarily surprising; acknowledge difficulty in accurately forecasting both market size and potential growth):

Now, for comparison, we will again share the following recent Mediasite catalogs and presentations:
Please feel free to click through each, compare notable differences versus other offerings, and reach your own conclusions. We welcome any informed feedback.

While shares of Sonic Foundry have moved higher following favorable June quarter results, we continue to believe shares are trading well below fair values based on earnings power and implied private market valuations that would be assigned by an informed strategic buyer. In the latter case, recent M&A activity provides ample valuation support. Further, we fully expect Mediasite video content to contribute a large share of the growing video traffic on the Internet referenced in the above slide. BUT, to be sure, although we like this very positive secular trend and large addressable market opportunity for Sonic Foundry, we're not necessarily buying the trend. We're buying value. Investing solely in the latest, most hyped trends without value is a perilous endeavor.

Just how is Mediasite contributing to online video growth? We shared evidence from Twitter in our July post, The Value of the Mediasite Franchise? First, Many Firms Could Clearly Benefit; Second, Ask Massey University and Others Around Globe. Tweets from the University of Florida, North Carolina State University, and Massey University, respectively:
The last Tweet comes from an IT specialist at Massey University. Toward the end of the Massey video shared in that post (video link here), note this customer commentary:
  • "We looked at what other universities were doing.... We tried Mediasite and, to be honest, we've not looked back.... The automation has just started. It's very successful and again that means we can cope with minimum resources. Basically, our roadmap is to get a number of units so that we can do automated recording across our campuses in three different cities and we can cope with the demand we're getting and that we expect to get over the next year or so... What I like about it [Mediasite], is that it's consistently high quality."
While some could say we're biased given our ownership position in the company, we can objectively say that many more organizations can benefit from Mediasite. Not only staff, but end users like all of us. Webcasting life all around the globe could be significantly improved. Do you agree?

Happy investing,

Jeffrey Walkenhorst

Disclosure: long SOFO.
© 2010 Jeffrey Walkenhorst
Please see important Risk Factors & Disclaimer


  1. The points you are making are valid and interesting. My question to you is that you are soley focused on the 'Product' and not an integrated solution with existing infrastructure. Although a good 'product', Mediasite, like others in the market place, is a proprietary "product" that only allows you to manage and distribute Mediaiste content. In a fast paced visual world with social networking, video, audio and other media and content files, one would think the vision of Mediasite would be to integrate and give the IT department a tool that would fit into their longterm strategy. I would challenge you to write an article on the convergence of the IT and AV departments and look at how video solutions integrate with long term strategies and not focusing on mere 'products' in the market place. There are many products that provide the same output as Mediasite. But the 'competitors' you choose to highlight are not them, at this point in time.

  2. Hello Anonymous,

    Thank you for your comment. I'm pretty sure that I covered integration and the back-end in the past, at least from a high level. Anyway, the best commentary comes directly from customers, not from me. In this regard, aside from reaching out directly to current customers (which I recommend), there's a wealth of information on Sonic's Web site here:


    Focus on the customer commentary and how/why they selected Mediasite over other offerings. BOTH the front-end (what end users see) and the back-end hardware/software infrastructure are important. There's nothing wrong with a proprietary stack if customers truly want a secure, enterprise grade system. Apple's proprietary stack seems to work just fine for computing, music, phones, iPads, etc. Also, note that Mediasite can capture all kinds of VGA content and the company plans increase "consumption" of even more types of content.

    Here's a relevant press release regarding how/why the London Business School selected Mediasite:

    One question: you mention "many products that provide the same output as Mediasite" - could you please share examples?

    Thanks and best regards,

  3. Some bits from the LBS press release:

    Prior to selecting Mediasite, the School completed an extensive international assessment of course capture solutions, including a comprehensive benchmarking review, site visits at peer business schools to study their respective capture strategies and formal, scientific evaluation of responses to the School's publicly-issued RFP.

    "During our review, we were impressed with the comprehensiveness of the solution, how Mediasite addresses the very real and practical day-to-day demands that we as a support organization meet along the pipeline from class to website," said Altendorff. "Mediasite offered more administrative tools and diagnostics, more comprehensive features than its competitors, and that was important for us because we aim for 100 percent up time for all technology in a lecture theatre. For us, the more slick the back office is, the better, and Mediasite is a mature and well-developed product."

    "We were equally impressed by the service levels of Sonic Foundry and the quality of Mediasite's install base. It was very powerful to talk with people who are using Mediasite and have been for some time, and to hear them speak so highly of their experiences with the product and the company," added Altendorff.

    London Business School will integrate the Mediasite EX Server platform within their Microsoft Active Directory and LDAP directories for security and user authorization. Mediasite RL Recorder will be integrated with AMX room control and automation systems in one of the schools major lecture theatres, which also features remote control network cameras, wireless microphones for presenters, two display screens and a new touch screen, light pen PC system. Mediasite ML Recorder will be used in a mobile rack system to capture guest lectures and special events throughout the campus.

  4. Jeffrey,

    Below are products with similarities. Albeit that each takes a slightly different approach, the output is generally the same. I'm sure you have seen most of these and more? I bet their customers have posted how they love their products as much as sonic foundry's.












  5. Anonymous,

    Thanks for sharing the links. Yes, I'm familiar with these companies, some of which I've mentioned previously and offer seemingly similar products/services, while others such as Elluminate and Wimba (acquired by Blackboard) are in ancillary spaces. I've tracked their progress from time to time and advise others to also keep tabs on competitive offerings.

    Indeed, there's always tons of competition in technology -- companies looking to do things faster, better, cheaper. This is a major reason why technology investing often delivers poor investment performance over time (versus, say, consumer products, beverage, or tobacco companies). Constant homework is necessary as the environment can change. Yet, with Sonic Foundry and potential competition, my research implies that we continue to talk about apples and oranges... The primary reason hails back to my initial thesis around the Mediasite franchise:


    "Our confidence arises from several competitive advantages that point to a powerful, sustainable franchise: (1) Sonic Foundry/Mediasite is far along the learning curve with (2) intellectual property protection, and (3) very satisfied, captive customers that face high switching and search costs. Points (1) – (3) are both related to and strengthened by (4) economies of scale and (5) leading market share."

    In my view, there's more than meets the eye to enterprise-grade video capture and event Webcasting.


  6. The best product out there for this is one by Altus. http://www.altuscorp.com/

    Check out their site. They have every video searchable down to the spoken word (not just within each video) but across a whole library of thousands of videos. They do this for Oracle, IBM, General Motors, etc.


Note: Only a member of this blog may post a comment.