Media 100 Exits the Streaming Media Market

Battered by the tough economy, Media 100 (Marlboro, MA) said it wasforced to make a choice between pursuing its dreams in the webcastingmarket or pursuing the development of a next-generation videoproduction system, code-named Pegasus. Ultimately, it chose thelatter.

In a teleconference hosted on Thursday, August 30, Media 100president John Molinari told assembled industry analysts and members ofthe press that it had agreed to sell its streaming media-relatedproduct lines to Autodesk’s Discreet Division for $16 million incash. The sold products include Media 100’s Cleaner line ofproducts as well as its CineStream, EditDV, and IntroDV programs andits EventStream technology.

According to Molinari, the sale of the products will allow Media 100to complete the development of its next-generation video productionproduct, Pegasus, a product, he says, that is “unthinkablyfast” and that “sets a new standard for digital qualityunmatched at any price.” The product, he said, has been indevelopment since 1998. Although there is not yet a firm ship date forthe product, Molinari said Pegasus is well along in its developmentcycle and could be shipped within the first half of next year. Pricingfor the product, he added, will probably start at about $25,000.

A Streaming Pioneer

In selling off its streaming media family of products, Media 100 isreturning to its roots in the traditional video production industry andis stepping away from a webcasting market it helped pioneer and forwhich it has been an outspoken advocate. The decision to sell thestreaming products, said Molinari, was not an easy one, but wasnecessitated by economic realities.

Citing slow products sales that have persisted for the past threequarters, Molinari said, “We had to make a tough decision. Do wecontinue to pursue two opportunities…or do we focus on one strongopportunity? We decided to focus on the one opportunity that has greatgrowth potential, our next-generation design.

“While we believe that the market for technology products willcome back, and that emphatically includes the market for Internettools, we think 2002 is a better bet for a turnaround than the nextquarter or two," said Molinari. "Furthermore, it is becoming clear thatvideo streaming on the Internet is going to need more time to fullygerminate, perhaps two or three years. Timing and the need forcontinued investment and development makes streaming an opportunitythat’s perhaps best suited to a bigger company.”

The sale of the products to Autodesk, said Molinari, “leavesus with a strong cash position; a cohesive, highly experiencedengineering team; a next-generation product and related architectureand platform all nearing completion; a strong worldwide sales networkof value-added resellers and complete support infrastructure; and arecognized and respected reputation for innovating greatproducts.”

More specifically, the sale gives the company $20 million in cash,which Steve Shea, Media 100’s chief financial officer, explainedwill be used to reduce the company’s cash burn rate significantlyand fund the market launch of Pegasus. He predicted the company wouldachieve positive cash flow in the second half of 2002.

Pegasus: Next-Generation Product

In describing Pegasus, Molinar said the product was developed to“bring blazingly fast visual effects to artists and editors withvisual and sound quality so stunning there simply would be no equal.And do one other thing—let these content designers and theirclients, including new broadband content providers, deliver thishigh-quality content over the Internet through completely new broadbandchannels.”

Calling the new company mission both revolutionary and evolutionary,Molinari added that “we have designed Pegasus to fully supportthe requirements of emerging broadband content creation and delivery,including the creation of interactively enabled content. Pegasus willalso support current film and video applications."

According to Molinari, Pegasus is built around an internallydeveloped “media supercomputer” that will serve as theplatform for all of the company’s next-generation products. Thismedia engine, he said, is self-powered by a series of seven customsemiconductors and comprises a realtime embedded operating systemsoftware and a PCI card that incorporates the seven ASICS.

Driven by the media engine, Molinari said “Pegasus can do whatno other product can do--myriad visual effects in realtime; unlimitedaudiovisual layers with acceleration you simply have to experience tobelieve; extraordinary combinations of concurrent effects with imagesignal processing precision throughout; and sheer brawn to give rocketdesigners envy.” The platform, he said, uses uncompressed videoprocessing throughout.

“This is performance that you cannot get today or tomorrowwith any off-the-shelf computer or any combination of auxiliaryhardware for any amount of money,” Molinari concluded.