Software Co. Buys Into Video Market, Expands Web Presence

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Digital Courier Technologies Inc., which this month expects to close the purchase of two videotape companies, hopes to exploit myriad targeted marketing possibilities by boosting its sales of videotapes and expanding the number of sites that use its e-commerce software.


A seller and licenser of software designed to handle other companies' online commerce, Digital Courier, Park City, UT, has become increasingly involved in the retailing of consumer goods online. In November, the firm debuted its Videos Now store (www.videosnow.com), with a link to America Online Inc.'s www.aol.com site. AOL, Dulles, VA, is a minority owner of Digital Courier, formerly known as DataMark. The company also sells books online and provides weather data to Netscape, Excite and @Home Network, giving it total sales of $4.2 million for the 12 months ended Sept. 30, 1998.


Last month, Digital Courier agreed to acquire direct response and Internet marketer Video Direct Corp. and its customer service affiliate Total Marketing Services LLC, both of Long Branch, NJ. Terms of the deal were not disclosed, though Digital Courier chief financial officer Mitch Edwards put Video Direct's total revenue for the last two years at $6 million.


But more than a beefed-up topline, Digital Courier wants Video Direct's 13,000-title database of special interest videos and 6,000-plus independent affiliates. In addition to integrating Video Direct's broad array of educational videos, documentaries and how-to tapes into Videos Now, Digital Courier gains a list of more than 60,000 customers and several hundred exclusive product licenses.


Video Direct's affiliates -- a broad array of clubs, individuals, companies and special interest organizations -- have links to the special interest videotape database on their own Web sites. Using direct response advertising on the Internet, Video Direct also has accumulated another 100,000 affiliate prospects, who in turn now become candidates for using Digital Courier's e-commerce software.


Though sales volume among many of the affiliates is very low, Edwards said the many links to narrowly defined groups will give Digital Courier a chance to precisely target those customers. The company plans to give its e-commerce software to affiliates, then share revenue on any sales generated by individual sites.


"You're really starting to use direct marketing principles in these sites because you're pulling out of your database of a hundred thousand videos those tapes that pertain to the communities using that particular Web site," Edwards said.


Digital Courier's software is designed to pull information from databases, satellite feeds and other information sources, and then create Web pages on the fly that serve up a group of product offerings. The software also processes orders and payments.


Looking ahead, the company can move into selling varied products online, said Edwards, who added that Digital Courier's real expertise is in its software. The types of products Digital Courier sells are secondary to the e-commerce itself, and the financial chief expects further corporate acquisitions down the line as the company expands its product offerings.


"There will definitely be additional acquisitions, and it's possible that there will be divestitures," the Edwards said, noting that "big media companies" have shown interest in buying Videos Now. If that were to happen, Digital Courier would continue licensing its software to other firms.


"It wouldn't be out of the question for a large media company to buy Videos Now," Edwards said. "And then we'll go write software to sell houses or mortgages or loans or fruitcakes or whatever."
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