Last month, Peter D. Csathy was named President & CEO of Sorenson Media, Inc., the global leader for encoding and compression applications which launched in 1995. A 20-year digital media/technology industry veteran, Csathy has an extensive resume with an unbroken track record of company successes that began following his graduation from Harvard Law School. But those who know him say that he's a down to earth guy and family man with Midwestern values and a remarkable business sense. Most recently he served as CEO of Internet video company SightSpeed, Inc., and engineered the company’s successful acquisition by Logitech, Inc. in late 2008 in the midst the current economic melt-down. Prior to Sightspeed he served as president and COO of digital music leader Musicmatch, Inc., which Yahoo! acquired in 2004. Before that he was COO of eNow (Relegence Inc.) which was acquired by AOL and a long-time media/digital media executive for Universal Studios, New Line Cinema and others. Peter lives in San Diego with his family, is a diehard Minnesota Vikings fan (no matter how difficult that is at times) and is a passionate believer in the power of music. He maintains a personal blog, Digital Media Update, which he updates daily and calls it a "myriad of media and technology musings by Peter Csathy." You can see his full profile here.
I had the opportunity to speak with Peter the following week after his appointment as CEO and the company. At that time he eluded to a number of big announcements outside of Sorenson Media's traditional market sector but couldn't comment on the specifics. But within the last month his new company already has made a number of announcements including their significant expansion into San Diego bringing big employment opportunities in both their San Diego and Salt Lake City offices, the bundling of Sorenson Squeeze 5 with Avid's Editing Software, the use of Sorenson Spark video technology in the new touch screen the Verizon Hub home phone system, and showcasing Sorenson Squeeze 5 and the Sorenson Spark Developers Kit at the NAB Show in Las Vegas, April 20-23, 2009.
I'm pleased to present the first part of this interview with Peter in which he talks about his new job, his short and long term goals and the challenges and opportunities for his company and the online video industry.
Larry Kless: How did the position come about for you?
Peter Csathy: Well, I've been in digital media technology space for a long time, you see. And we had just completed the sale of Sightspeed to Logitech which was a great result for all. And I'm particularly proud because it's a great result for the company, my investors, my employees. And it happened during this crazy economic meltdown. So it was a wonderful thing, a great result, a great home in Logitech. And the transition was happening for the last couple of months. And I'm a company builder. That's what I've been doing. So I'm fortunate that I've had a number of opportunities come my way. Sorenson Media was one of them. And given my background and just given my deep passion for video and my belief that we're in the very early innings of this whole video opportunity, that's how it presented itself. And that's why I decided to go with this team.
First of all, the market opportunity is vast. We're early. Second, Sorenson already had this established name of credibility, of high-quality products, best in breed. And we've been a profitable company, which is very rare, of course. And we have a nice clear direction of where we're going to take things. And then finally, of course, we have the team. And I'm a believer in the team that we have. And we're growing both in Salt Lake and in San Diego. We're hiring. We're expanding because the opportunity's so big and the company's doing well. So for all of those reasons, for me, it was a no-brainer.
LK: Was there any other leadership changes at Sorenson aside from yourself as president and CEO? Peter Csathy: No, I have the same team, but we're growing. We're expanding the team, as I said, both on the Salt Lake City side and the San Diego side. And so we're hiring and kind of across the board actually.
LK: You know how everybody's looking at President Obama and saying, "Okay. One hundred days, what is he going to do?" Did you have a 100-day plan yourself?
Peter Csathy: Well, I'm a pretty off-and-running kind of guy. I believe in setting the vision, the tone, the objective early on as long as I know enough about the company and about the opportunity to do so. I was able to, I think, hit the ground running with this company. So there are absolute things that we have set in place that weren't in place before that I think can be very exciting for this company. So I don't have a technical 100-day plan, but I certainly have a plan that has been implemented or is being implemented that first and foremost, we've already determined our priorities. And now it's a question of execution in a very focused manner. So that's what we're doing.
LK: Is there any specifics on the objectives that you could share?
Peter Csathy: Well, I can tell you this that we have an exciting opportunity beyond what the company's been focused on today. So we will always focus on being the best in class and most innovative when it comes to the compression and encoding and Squeeze and Squish. And our current slate of products, you can bet that in the near term, there will be a very compelling expansion of the overall opportunity for Sorenson that is going to make the company even more exciting. And, unfortunately, that's all I can say to that.
LK: I understand. When should we expect to see some of these changes or some of this new innovation? In the calendar year?
Peter Csathy: I can tell you that it's not a long term. It's going to be sooner than people think.
LK: What do you think the biggest challenge is so far facing your company? Peter Csathy: Well, the biggest challenge I think for any company is that there are opportunities everywhere. And you can't spread yourself too thin. You have to really focus. You have to choose your battles. You have to focus and be more right than wrong. And so the biggest challenge for any company is to have that kind of focus. Rather than trying to do everything, you pick the most compelling opportunities. You focus on them. And you really make those take off.
LK: What would you say are some of the biggest challenges just facing our industry right now, online video, streaming in general?
Peter Csathy: I think that the biggest challenge in terms of even accelerating a pace further is that things aren't as easy as they need to be. And I think reaching a wider audience more quickly with the power of what could be done because video's everywhere, as I said, and it's growing by leaps and bounds. But getting the message across to an even wider swath of the small and medium sized business, videographers, even on the enterprise side. The enterprise side is pretty focused on the, but the SMBs, which is a huge opportunity and then on the consumer, a huge opportunity. And the biggest challenge is to make it high-quality, which we can do. Simple or easy to use. And things are too complex out there. So ease of use. And then in terms of a cost-effective solution. When I look at the competitive landscape, that's where I see the big holes. And that's where Sorenson can really come in and fit in. And I think our unique proposition above and beyond all of those kinds of things is that Sorenson is a trusted name. As I said, we've been profitable, and we've been profitable for a long time. And the company's been around a long time. And we partner with the best, you know, Avid, Apple, others. And so we're a very rock solid company that will be there. And others in and around the space are startups, not proven. And it's not a great time to be a startup.
LK: Well, that was actually a question that I was going to ask you a little later, but I guess I'd ask if you'd have any advice for some of these startups in these kind of volatile, dire economic times?
Peter Csathy: Well, so in our particular space, that is a substantial differentiator from most of the competition. And so for customers, when they're looking at possible solutions, if you're entrusting your video, your precious possession of videos, then you better be working the stage to be around. That's one thing. But when it comes to just generally for entrepreneurs, well, it's crazy out there. It's very difficult to raise capital, obviously. So what you need to have is beyond the obvious of having a compelling composition, you have to have a very focused plan, focused business model. And for those who already have funding, it is not the time to be deficit spending. It is the time to be very lean and mean and get to cash flow break even essentially because funding is not going to come.
LK: You've mentioned that we're in the early innings of the online video game. Each month the video views continue to grow -- comScore said just in January YouTube hit more than 100 million. More people are moving to online video. Any general comments on the growth you see?
Peter Csathy: Oh, yeah. So first of all, as massive as those numbers are today, it is early. It's early. Video is already pervasive, but it's going to be so much more pervasive on a mobile phone, everywhere you are. It's all going to be internet-driven, video-on-demand. And so it's a question of just like text content initially, the internet, it's getting it all encoded and having as broad of a supply, as broad of a library of videos and then it will be just like a Google search. You'll be searching for what you want, when you want, where you want it. And so for those who are essentially arms dealers, like us, we're in a very good position because it is so early. Are videos recession-proof? As you can see by those numbers that you said, the consumers and businesses alike -- first of all, the consumers, they'll consume more and more. People like video. It's compelling. And now that it's so easy to use on whatever device you're on, not as much on the TV yet, but it will be there very soon. It's already there, but it's particularly early there in terms of getting it into the living room. But for the consumer, video's only going to grow, continue to grow massively. Just massively. As far as the businesses, similarly, from the enterprise side, monetizing your video assets, and again that's why we're positioned really well, but also for the SMBs, when you're talking about, "Okay. How do you make more money? How do you generate more revenues? How do you optimize?" Well, the best way to sell frequently is through video. Showcasing a product. Showcasing of services. And that's something that video can do unlike anything else in terms of from a marketing/advertising perspective. So as you can tell, I'm beyond bullish on the overall opportunity.
LK: Absolutely. And there's been a real move, I think, for small and medium-sized businesses in more localization to provide video as getting rid of the banner ad and using video instead.
Peter Csathy: Oh, yeah. Absolutely.
LK: So one question which you answered was just how healthy Sorenson Media is, you mentioned you're profitable and have been profitable.
Peter Csathy: Yes. The company is extremely healthy. It's one of the great assets of the company is that we have been profitable and profitable for a long, long time. And the company, as I said, has been around. So that's a significant differentiator from others who have kind of come and gone. And I saw that game play out before in other markets. So especially in these crazy times, that's absolutely critical.
LK: And then in terms of just the space itself, from your position, clearly looking at competition and strategic partnerships, and you had mentioned stay tuned for some announcements, it sounds like you're talking about expanding into other areas, potential partnerships and strategic partnerships there. What about the competition? Do you get that question asked a lot about On2, your direct competitor?
Peter Csathy: Well, I'm not going to name specific competitors, but certainly there are a number of parties in and around our space. And all of the things that I indicated why we are uniquely positioned and best positioned is that we are profitable. And you can look at the competition and who else can say that? Certainly, we've been around for a long time. We have a business that's a proven business with a best in class product. We're known as being the innovators when it comes to the core products that we have today. And we have partnered with some of the best and brightest. And we have for a long time. Obviously, Macromedia way back when which has become Adobe. Apple as well. We really empowered or enabled video of the internet from the very beginning. So we're the pioneers. And we have a very interesting business model. So when you look at from a partnership perspective, why us? Well, all of those reasons I just said. Because partners need to make sure that the company's going to be around; that's critical. We're best in class. We're built to partner. And if you look at my background, partnership is essentially in my DNA is the way I see it because for 20 plus years, I've been very partnership-driven. And that's how we built my last companies. That's how we built the company before that. And then throughout my career before that, it was very partnership-driven. And we can uniquely offer partners of all kinds, such as the Avids of the world, a world class solution that is something that they need and their customers need.
End of part one. Stay tuned for part two.
About Sorenson Media, Inc. Sorenson Media (https://www.sorensonmedia.com ), the global leader for encoding and compression applications, provides hardware and software solutions that enable users to easily and affordably compress, manage and deliver quality video over the Internet and to CDs, DVDs, mobile devices and other formats. The company also produces quality tools for publishing and managing user-generated content. From the time it was launched in 1995, Sorenson Media has been at the forefront of seminal trends, products and technology that have dramatically improved the Internet experience for developers and users alike. The Sorenson name has become synonymous with quality, innovation, ease-of-use and cost-effectiveness in video compression and encoding. Beginning in early 2007, Sorenson Media entered the realm of user-generated content with the release of easy-to-use Web applications and editing and management tools for the development of customizable video sharing sites.
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