The Funded Dec 2008

8/14/2019 The Funded Dec 2008

1/19

ArcoStreams


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Company Summary

Location: Los Angeles, CA Established in 2002

Employees: 6

Financial:

Cash flow positive, 2007 revenues of $800K

Debt free, 100% ownership by founders, no outsidefunding

Key personnel

CEO and Founder: Todd Loewenstein, previous

successes at InterVU, Evoke Communications; 12years in the streaming industry

CTO: Russ Foltz Smith, top management and techexperience at Launch (Yahoo), Business.com,CitySearch/IAC, and Pure Video

Dir. Streaming Services: Todd Zegras, Akamai andInterVU


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Vision for ArcoStream

Vision: Serve all the webs content and advertising

Objective:To create the easiest to use essential media deliverysystem that increases profit for publishers and advertisers.


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How we make $$$

Provide applications, infrastructure, metrics and toolsets forpublishers and advertisers; a niche we call Media ServicesMedia Services

We do these things for our clients:

Reduce costs and distribution hiccups Eliminate the need to talk to humans; long distance

direct dial analogy

Reduction of labor costs for streaming companies

We make money by

Serving lots of media files (bandwidth consumption)

Revenue Sharing on Advertising (rich media advertising)

Run Ad Network

Power Ad Networks


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Media Services Quadrant

Video Ad

Network

Companies

Mirror

Image

AQuantiveGoogle/DoubleClick

Limelight

Akamai

Right

Media

Tremor

Broadband

EnterprisesRevver

BrightCove

InterNA

P

EdgeCas

t

CDNsEncodingand

Metrics

Companies

Tradition

Ad

Serving

Companies

24/7

Level 3

Tacoda

Casale

Rhozet

Rip Code

Zedo

Nielsen//NetRatings

OneStat

Advertising.co

m

Coremetrics

ValueClick

HeyWatch

VideoEg

g


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Market Opportunity

Content Delivery Network (CDN) Space estimated at$400M in 2008; Internet advertising industry grew to a$11.5 billion industry in the first half of 2008. 1

Of the $11.5 B in advertising, $3.8 billion was devotedto online video and display advertising, up $600M fromthe first half of 2007.

Online video advertising is projected to be a $10 billionindustry by 2010; 1% of market is $100M!

1. IAB/PWC


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CDN Markets Problem

While bandwidth and storage pricing goes down in acommoditized market, labor costs continue to rise

People want to shop online for services and have less humaninteraction

CDNs make it difficult for companies to post content to theweb; no way to register quickly and automatically postcontent for web viewing; setting up an account and startingcan take 9+ days

No company has figured out how to put every ingredienttogether


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Online Video Ad

Markets Problem

Most ad campaigns take 2+ weeks to implement

Separate contracts for ad serving and ad sales, encoding,

CDNs, and metrics/reporting

Difficult for all the pieces to fit together (i.e. matching thead w/ the content immediately following it)

No company has figured out how to put every ingredienttogether


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Our Solution

Our automated content management & ad

insertion/campaign management system cuts productioncycle to 20 mins

One company does it all (ad sales, serving, encoding,multiple CDNs, reporting and metrics)

We serve both the ad and the content behind the ad We have access to all types of meta information on viewing

habits that advertisers find extremely valuable

We make the pieces fit together

(Content &Advertising Network Delivery EnginE)


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How are we different?

We dont just serve bits; we offer a complete end to endsolution

Account set up takes minutes with us, and days withcompetitors

Automation allows for lower labor costs

CANDEE allows people not just to post content, but toencode it, monetize it using our ad serving and managetheir content; many streaming companies have just FTP

Customer deals with one company for all their needs,

not one for CDN, one for ad serving, one for encoding,and one for metrics


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Day 1 Day 9

Encode

videoassets

Contact

various

contentdelivery

network

companies

Set up

testaccount

Obtain

pricing;

evaluateservice

offerings

Contract

w/ CDN;

CDN

account

opened

FTP

Uploadencoded

content

to CDN

for

trial

Reporting

set up andcontent

streaming

Typical Content Delivery

Timelime

Day 4 Day 6


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Minute

#1

Minute

#20

Encoding

finished;

links

available

forposting

Sign up

for

services

online;

account

set up for

testing

Transcoder

takes 3-5

minutes

to produce

digitizedcontent

Take

content&

upload to

network

Add

content

protection

and begin

an adcampaign

if needed

Place

links to

content

on

websites

Begin

Streaming

Our Timelime

Minute

#5

Minute

#15


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CDN CDN CDN

Basic System Diagram

ReportingEngine

YieldManagement

AccountDatabase

AccountManage-

mentAnalytics

AdServer

File Management

DRM

Candee Web Interface


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Infrastructure and

Toolsets


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Walk Thru

Marketing Marketing pages

The Core Account set up

Basic Media Management and Encoding Ad Server Reporting

Value Added Services Content Categorization Specialized Metrics

User Generated Content Systems Specific Implementations

Sundance (UGC plus CDN) Monterey Bay Aquarium (live streams, revised metrics) Music Choice (paid services, hashkey)


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Ad Server

Core Features Account creation for publishers, advertisers and hybrid Invoice creation Ad Invocation (pre roll code) Targeting

Placement, Geotargeting Capping and Pacing

Ad Target and Serving Capabilities Supports Audio, Video, and Banners Can be accessed in standard ad code ways Several API options for integration into players

Media Management Upload, Storage and Auto Encode Publish to CDN

Reporting By Account, Campaign, Creative, Placement, Site


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Dec

2008

Jan

2011

Increase

sales

staff;

booth at

Ad Tech,

trade

events

planned

for late

summer/

fall

Hire COO,

VP, & Ad

Sales;

ramp up

ops

Increase

marketing;

hire more

sales and

support

staff;

rollout of

new

products

Sales team

at 9-10;

increase

of

marketing

spending;

Ad Tech SF

in April

Sales ramp

to more

than

$2M/month

Staff

grows to

25+;

monthly

sales

approach

$4M

3 Year Horizon

Jan

2009

Feb

2009

Funding

Completed

Mid

2009

Jan

2010

Mid

2010


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2008-12 Financials (inmillions)

20122011201020092008

$55.5$31.7$11$1.7$.2Net

Income

($9.1)($6.5)($4.5)($3.2)($.35)Expenses

$64.6$38.2$15.4$4.9$.55GrossMargin

($47.7)($27.8)($11.2)($3.6)($.25)COGS

$112.3$66.0$26.6$8.5$.8Revenue


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Summary

Established profitable company with realcustomers and real cash flow

Looking to raise $1 million by end of 2008 for

marketing and sales, as well as R&D

Efficient Operations and Fund Development

Road Map calls for Hiring VP of Sales, Sales Staff

Marketing $$$ going to SEO, Ad Words, Trade events

Regular upgrades of all services

Addition of new networks to CDN pool

Documents

The Funded Dec 2008