Sorenson CEO Peter Csathy: We're not just an OVP

Sorenson CEO Peter CsathySorenson Media CEO Peter Csathy is looking to take the company to a new level in the online video platform space.

In January, the company reported it had one of its best years ever as revenues jumped 50 percent in Q4 over the previous year and its newly launched Sorenson 360 video management platform began to gain traction in the market. It continued its success in the first three months of this year, seeing revenues grow 40 percent over the same period in 2009.

With its roll out of Sorenson 360 v2 this week, pushing hard into the enterprise space, and going toe-to-toe with segment-king Brightcove, it's poised to continue its expansion.

Although the company has long been seen as a tool for small business and solo video practitioners, Csathy--who himself is a relative newcomer to Sorenson--is aiming to change that perception. He's planning on using the company's DNA in the video industry--as USA Today's Jefferson Graham wrote in a story last year, "Everytime you see a video online, you probably have Sorenson to thank"--and its success as an enterprise in its own right, as the basis of that evolution.

He's vehement in his belief that there's room for the company at the head of the OVP pack, and says 360 v2--which has undergone a major overhaul from its predecessor that launched just a year ago--will be the engine that helps the company grow in a space that he says is destined to be changing dramatically in the coming year. He took time to chat with FierceOnlineVideo about Sorenson last week.

On the future of the online video platform business:

"If an enterprise is looking to entrust their video assets with a company, while there are scores of OVPs out there, it's a pretty risky proposition to invest, in terms of the majority of them.

"The majority of them are going to go out of business. They're small, VC backed, and most haven't been able to establish themselves, whereas we have a rock-solid story that we will be here. We're the company you keep. That's a major differentiation in how we plan to crack the enterprise market.

On Sorenson's unique perspective as an early player in the video market:

"We helped mainstream online video (the company introduced its first codec at MacWorld in 1997). We understand the needs of the companies in this market. People say to us, ‘You guys are SMB focused, you're focused on the needs of the solo video practitioner.' But we've always been ensconced in the enterprise space as a company, always. Other OVPs had to start from square one. We have a reputation that gets us a seat at the table very easily. We had to accelerate the pace of our development because of the demand for an enterprise solution that we had from existing customers.

On competing with Brightcove, Ooyala and other OVPs in the market:

"We're going after Brightcove and all others in this space and we believe we have a differentiated story: a trusted brand, a significant mass of customer base--including Fortune 500 companies--who are looking for more solutions from us. And we can get a seat at the table with them because they know us, and we've been long-term profitable and rock solid with this business.

"Both Brightcove and Ooyala started by focusing on the media space, but our usual target verticals are not media companies, although we can service them very well. We're targeting the markets we already know really well, such as higher education, the agencies and health care. Those are vertical markets that are right for us. They know us really, really well.

"There are 50, 60, 70, 80 OVPs out there but (online video) is a massive market. More businesses are understanding that they have to do online video either proactively or reactively. As many announcements as there have been across the board, we've only scratched the surface collectively as a market.

"We are not looking to poach customers; we're not looking at Brightcove's or Ooyala's customer lists to poach... but I think that if a customer puts us through our paces that the differentiation will shine though and then people naturally will say--even if they have an existing OVP--'hey, let's give Sorenson a call.'

"Media companies are just a tiny percentage of the industry. They get great attention because they're sexy. But we've had relationships with Warner Brothers, Gannet, HBO; these are companies that have used Sorenson for years and years. I think it's natural for any of these to say, 'lets take a look at Sorenson 360.'

"We're not targeting the media vertical out of the gate at all, we're not. BUT we can absolutely handle them service them and we feel we can do it better than just about anybody.

On Sorenson's sales strategy:

"Most other companies and OVPs are looking to build very large sales organizations, and essentially make all their sales through direct channels, plucking them off one by one. And we certainly have built a sales team that's having very good success with 360 v2 already, we already have several very big deals in the works.

"But this management team has successfully built partnership businesses before to really expand the footprint of the companies we've been with. That's why we were brought into this company. That's how we look to really grow and accelerate our enterprise solutions, like our OVP.

"One example of that is Amazon Web Services. We use them as our backend infrastructure, so we don't have to have our own server farms. But on top of that, Amazon's worldwide sales force is now out there selling Sorenson 360 v2, and so we have all the feet on the street from Amazon and a whole host of other partners. And that is a very differentiated strategy from most other OVPs.

"We're putting quality first and foremost. That's been our mantra here. Always has been, always will be. We will have the best quality video, a great feature set. Quality really matters to the enterprise because it reflects their own commitments to quality, it reflects on their own reputation.

On the hurdles facing Sorenson in the OVP space:

"We have to continuously look to make sure we are optimizing our resources. One hurdle for us, frankly, is that (Brightcove CEO) Jeremy Allaire has come out and expressly said Brightcove has had a hand in commoditizing the OVP business. I believe a lot of potential customers now are thinking of OVPs as a commodity.

"We fundamentally disagree with that, we believe that overall leader experience matters, that customized solutions really matter. From a marketing perspective helping people understand that is, of course, a challenge for our company.

On what he sees as the difference with Sorenson:

"We think one of the things we can do better than anybody is to be a problem solver. We tell our customers 'don't worry about it; you've trusted us before to solve your problems, we'll solve it in different ways--like our intelligent embed codes.

"We are hungrier. We have great customer support, a great sales team. From the top down, we are passionate, hungry folks. I will absolutely commit that we are never going to leave folks hanging.

"It's a big deal (to not have to worry about VC funding). A lot of OVPs out there are pie-in-the-sky in terms of their modeling. We're in it for the long haul. Because we have been long-term profitable, we can patiently grow this business.

"We didn't go into the enterprise space until now because we think the APIs are fully ready, we think the feature set is flushed out to the point where it's really ready. We've built up our sales organization and we have out initial partnerships in place.

"We've looked at the check list of various features we offer and we talk about differentiation, but at the end of the day, in the overall customer experience, ease of use really matters. What I've said many times is 'easy is hard.' Perhaps the most important feature is just that our product is intuitive, it's easy, its elegant. I think our execution is better than anybody.

"Lets face it, there's going to be a lot of attrition in the space. Even as the market grows, there will be fewer players and we certainly expect to be one of those and we expect to have significant share."