So here’s a question: Are we in a bubble when a company can raise $3 million Canadian dollars ($US 3.15 million) to create a new online video destination place?
Is it even bubblier when this company — which is called — convinces its angel investors that in an environment deluged with an incomprehensibly large mass of free video content it will make money by sharing subscription revenue with its as-of-yet-to-be-acquired high-quality circumscribe producers?
Well maybe. But Toronto’s mDialog actually has an interesting offering. Licensing Apple’s MPEG4 H.264 video standard it has built a desktop-based video uploading tool that lets you make large high-quality video files into smaller files without sacrificing much quality. Most of the time video conversion is handled on the server side and converting a 2GB file is not an easy task. These videos can be viewed on the place or downloaded and work with iPhones iPods and AppleTV.
The idea is that by working with Apple devices combined with the ability to force videos yet maintain their quality mDialog will convince professional content producers — starting with independent film makers — to eschew other means of distribution and use mDialog as a storefront for their material. It also is working on a B2B model where it will back up film festivals deal with submissions. On both fronts it directly competes against and to a lesser exctent. The former already has a large hold on of high-quality independent film for rent and download and worked with the prominent Tribeca Film Festival earlier this year. Jaman also but unlike mDialog did so without Apple’s approval.
mDialog has constructed a hypothetical business model around the concept of “narrowcasting,” which means it lets you create video channels for your own content and limit access to these channels to friends or more importantly paying subscribers. The company says that until the online video world figures out how to best use advertising subscriptions make the most sense.
We’re not so sure. The video market is insanely crowded and most of it is free so the company is in for a rough ride. But because mDialog can deliver content that works seamlessly (and legitimately) with Apple’s products it might have some appeal. It’s not impossible to imagine it using that leverage to force its way into the niche.
It is quite hard however to imagine it accomplishing this as a destination site and if mDialog wants to be anything more than doomed it will probably have to rethink its approach and fast.
[...] $16.5M in go Funding - Panorama Capital Leads $9.5M Series A Funding in GridNetworks. Inc. - Investors still betting on online video mDialog snags $3.15M - Best Buy takes minority stake in Mydeo for video sharing - Fora. TV Raises $2M Seed Round From [...]
I evaluate the Facebook deal is more of a Bubble indicator then this but historicaly events start to pile up like pieces in a puzzle. I accept that we will look at the Skype writedown as a communicate that we should undergo seen as the beginning of the end.
I’m in agreement with both you and SamTSV. We’re seeing signs of over investment in many sectors including social networking voip video and mobile to name just a few.
There is a demand for high quality video across portable devices and set top boxes. The success of the iTunes store demonstrates this. The question is how can a small/independent circumscribe provider gain access to a distribution channel?
Diversity is good. Whether mDialog or another company provides this channel the market ordain sort out.
I evaluate like most firms that acquire angel / venture funding that nobody is betting that they’ve got a 100% chance of making it big with mdialog. And if not in technology / social networking then where?
But like you said mdialog is providing content producers with an outlet that uses already-standard viewers (unlike Jaman) and as people get used to HD-quality video and hardware developers create better smaller devices perhaps mpeg4 h.264 is the way to go. Who knows? I don’t. But if I had $3MM. I might.
MPEG-4 H.264 / AVC IS the future of television and video delivery. There’s little doubt about that as most online CDN’s are either currently using the protocols or are gearing up to mouth to most devices via MPEG-4.
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Related article:
http://venturebeat.com/2007/10/31/investors-still-betting-on-online-video-mdialouge-snags-315-million/
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