Every successful business either solves a problem or fills a need that had previously gone unfulfilled. With the emergence of the Internet and the social media movement, online videos have now become the content ‘kings’ and this new medium has become the message, one that advertisers are rushing in to provide.
So how does a smaller business compete with the big corporations in this space? Enter Canada’s SoMedia Networks (TSXV: VID), which has developed a scalable video production solution that 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. And, in doing so, is solving a pre-existing problem within this industry.
“The demand for video by business for online marketing was taking off, and it was obvious that the future of marketing online is going to be video. The problem was, and is, that video, except for (SoMedia’s method), is still being produced the old fashion way, which is by hand, a creative process,” SoMedia’s Founder & CEO George Fleming told SmallCapPower.com recently.
“The model was very similar to other businesses that the Internet had been used to disrupt, where process, systems, standardization and SaaS based platforms were able to streamline and make processes more efficient and organize people differently to reduce cost and speed up turnaround time,” he added.
In many ways, what SoMedia Networks is doing for video production is similar to what Uber has done for the car service and taxi industry, minus the regulatory hassles.
“Uber stepped in and turned it into a very simple process where all of a sudden they made something that was difficult to access simple and easy. When people say that about SoMedia, it’s the same thing, video production has always been considered expensive, complicated and cumbersome, and most people would avoid having to deal with it, or have to pay a huge price for it. What we have done is turn video production into something as simple to access, as it is to access as an Uber ride,” Mr. Fleming contends.
Where SoMedia really stands out is that made a complicated process (video production) simple and is able to provide it at the lowest possible turnaround time and price point, which the company estimates at 50% or greater savings as compared with the traditional video production model. It does this by employing a network of more than 3500 videographers throughout North America, who are crowdsourced and ranked based on experience and equipment quality.
SoMedia Networks’ success thus far has been reflected in its financial results. The company reported record sales of $970,654 in fiscal 2014, an increase of 125% over the previous year, while reducing its total operating costs by 24%. Its Q1 2015 sales of $384,503 was 15% higher than the previous best month and a 37% improvement over the previous quarter.
SoMedia has achieved this, in part, by signing high-profile clients such as MAACO and Yellow Pages. And there’s plenty of room for growth, as the company has identified 85,000 businesses that provide Internet marketing services across North America, a fragmented market where there are no large players and only about 25% offer any video production services.
Investors, meanwhile, have taken notice, sending SoMedia’s stock up about 100% so far in 2015 to its current price of $0.28. The company has approximately 43 million shares outstanding, about 22% of which are held by SoMedia insiders.
Keep up to date with breaking news, commentaries, and interviews by following SoMedia Networks here.
To learn more about SoMedia, you can view their research update and CEO video interview on their SmallCapPower.com Investor Hub: http://www.smallcappower.com/companies/products/somedia-networks-inc-tsxv-vid
About SoMedia Networks:
SoMedia Networks, the creator of Scalable Video, has reengineered 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. SoMedia provides Scalable Video as an integrated solution to corporate partners, as a resale solution through thousands of web marketing firms and directly to digital agencies and millions of SMBs across North America. For more information visit: www.somedia.net.
Disclosure
Ubika Research has received compensation from SoMedia Networks to provide analyst research coverage.
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