SmallCapPower: SoMedia Networks (TSXV: VID) has re-engineered how businesses access video content, creation, production, and deployment. The cloud-based SoMedia platform allows businesses, brands, and media to easily order the production of custom video content at scale and volume anywhere on demand with rapid turnaround and at a fraction of current costs.
George: SoMedia Networks is all about video. It’s about the scalability of video. What you’re seeing today with video is its use across all online platforms and particularly mobile. And as a result, the demand for video production and video marketing services has escalated. The problem with video is that it’s not a scalable solution. It’s an old-fashioned business, kind of like most of the businesses that the Internet disrupted which were being done traditionally by hand. And SoMedia is all about developing the systems and the processes, and the solutions to be able to make video production as simple as it is, to go online and order a website.
I started the company eight years ago, we’ve transitioned completely to video six years ago, and have ever since then been developing our platforms and our systems, and tools and solutions for different sectors of the market, and different applications.
So, SoMedia really focuses on making video simple and accessible, and less expensive. In fact, we’re able to produce video content anywhere in North America. We’re able to produce it in 14 day turn-around, at the lowest price points in the market, which can be 50% or greater savings than from anywhere else. And we make it so that you don’t have to know anything about video to deal with us.
So, video advertising is really starting to take off today. Google with YouTube and now Facebook, and soon Twitter and it’s expanding to Yahoo, etcetera, are driving the use of video advertising. Why? Because video advertising performs better than any other form of advertising. In fact, Google has told us themselves that they have 27 times the click-through rates on video advertising than they do on other forms of advertising. So, it really comes down to the math. The ROI of video advertising is higher than it is for any other form. So what’s happening is the demand for video advertising is escalating.
SoMedia’s positioning as the only company that provides scalable video, where we make it inexpensive and simple, and everywhere has put us in the right place at the right time to be able to enable the online marketers to bring video advertising to their clients.
SmallCapPower: Some people have described your company as being the Uber of video. Is this accurate, and if so which way is SoMedia similar?
George: If you look at the way Uber operates and then compare to SoMedia it’s pretty obvious. Uber hires drivers who have their own cars. Those cars need to meet a certain requirement. The drivers need to have a certain level of experience. SoMedia has a network of over 3,500 videographers across North America who all have their own equipment. Their equipment needs to be a certain level of professional grade. And their experience needs to be a certain level. We actually rate and rank all of our videographers, levels one to four based on their experience. Uber rates and ranks all their drivers as well. In fact, after every Uber ride, you can rate the driver, and our clients rate our videographers. With Uber, your relationship is a very simple one. It’s online or through an app relationship where you order a car. Uber takes care of all the rest. A driver shows up, you know that the car is going to be a nice car and the driver knows what he is doing. You don’t pay that driver, you don’t even know that driver, and you’ll never talk to them again. Uber takes care of all that.
Well, SoMedia is the same way. With SoMedia, our clients go online, they order the type of video, the length they want, and they provide us with some simple creative input. We translate that into production requirements. So when you order the video, a videographer will show up at your place of work on the day you’ve ordered for, and they’ll only spend an hour to an hour and a half shooting the video. Once they’ve finished, they go home, and 14 days later your video is done.
SmallCapPower: What steps do you think are required to take SoMedia to the next level?
George: What we need to do today is scale up our marketing and our advertising. And to do that we are in the process now of putting together robust content marketing programs, demand generation systems, sales automation processes, tools that SAS companies use to be able to reach thousands and thousands of customers at the same time.
SmallCapPower: What’s the greatest challenge you face in growing the company?
George: The greatest challenges we face going forward are really to do with the rate of acceptance of video by marketers and businesses. And our ability to attract the right talent. When it comes to video, it’s something that’s new. Most businesses still aren’t using video. In fact, only about 30% of small businesses today have video on their website. That’s changing rapidly but because it’s new, people are learning about it. And when they’re learning about things they move more slowly. That’s been our challenge in the past, that’s changing, things are speeding up, but it’s still one of the challenges.
The second thing is, is the talent level. Unfortunately in Canada, marketers who understand content marketing and demand generation just aren’t on every corner. So, recruiting the right talent available to take SoMedia to the next level is always a challenge for us. We’re succeeding at that, but it’s always a challenge to find more people.
SmallCapPower: SoMedia Networks’ stock price has doubled so far in 2015. Which catalyst do you think will move it even higher for the remainder of the year?
George: SoMedia has been able to harness some of the demand for video production. Investors have started to recognize SoMedia for what it is; a first mover in a rapidly-growing sector. And as we continue to go forward, and sign more agreements with companies like the Yellow Pages, and Maaco who need video production in volume, in multiple markets, or our programs for Google Partners and Facebook advertisers, the market begins to recognize the potential of SoMedia. And as we go and roll out these sales and marketing programs, and these inducements to tens of thousands of marketers, our volume of production, overall sales and earnings will escalate with that.
SmallCapPower: Thanks for taking the time for today’s interview.
Keep up to date with all of your favorite small caps. Subscribe to our free newsletter and get daily investment ideas, break-out stocks, momentum gainers, expert and analyst stock picks and more. Small Cap Power.com. Investing ideas and research.
