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Media On Demand.com Sees Infomercial Application for Streaming Technology

While streaming media is expected to have a widespread application for direct response marketing to consumers, limits on Internet bandwidth hinder its growth as a mass marketing technology.

In the meantime, one company is developing sales and marketing applications for streaming media that may find a similar application in the marketing of consumer goods through the Internet.

Media On Demand.com, a streaming media startup in New York, wants to grow as the Internet grows. The company expects sales this year of between $1.5 million and $2 million derived from fees for designing and implementing various kinds of corporate Webcasts.

McGraw-Hill commissioned the company to Webcast a multimedia sales training session, where two representatives from the publisher described its upcoming book releases. McGraw-Hill salespeople could tune in to the Webcast to learn more about the books before meeting with their buyer-clients at retail stores.

The presentation displayed video of the two McGraw-Hill reps on one part of the screen, while the book covers and some basic information about the books were displayed on the other half of the screen. The video appeared somewhat grainy, which is commonplace on today’s low-bandwidth Internet.

“Right now, it’s basically an alternative to video teleconferencing,” said Charles T. Saracino, president/CEO of Media On Demand.com. “In the future, we’ll be able to do infomercials for companies and products.”

Those online infomercials would allow marketers to compose multimedia presentations for a product. While the Internet consists mostly of graphics and text today, it is expected to carry more audio and video elements in the future that would make its selling power more like television’s.

“A lot of us are still nervous about the bandwidth issue,” said Eric Mangol, director of sales at Media On Demand.com, “but we are speaking to large direct marketers and catalogers about the applications for this technology. They’re starting to see that some form of video would greatly enhance their Web sites.”

The company is particularly interested in the marketing possibilities for entertainment properties that would be distributed on pay-per-view basis. Paul Kagan Associates, a research firm in Carmel, CA, projects Internet pay-per-view services will be a $9.7 billion market by 2008, making it the largest segment of the $21.4 billion streamed content marketplace.

“We now have a business-to-business site for movie distributors that allows theater owners to see trailers for movies,” Saracino said. “Eventually, we see the possibility to offer pay-per-view.”

Media On Demand recently raised $3 million in a private placement offering managed by Kohlberg & Co., New York, and expects to staff up with more salespeople and technicians.

The company grew out of a video switching company, Waterfront Communications, that was partly owned by Saracino before he divested his interest in it. Waterfront continues to own about 4 percent of Media On Demand.

The company has developed Webcasts for Nasdaq, Compaq Computers, the Na-tional Football League and the Direct Marketing Association.

Many of those Webcasts are similar to the one for McGraw-Hill in that they are intended for sales and marketing support within an organization.

Saracino said there is a major cost advantage to streaming sales information to a company’s sales staff across the country, rather than paying to congregate in one place. Whereas an off-site meeting may cost a large company $300,000 to $400,000, depending on the number of people, a Webcast can be conducted during two days for $80,000. It can also be archived and rebroadcast flexibly or burned on to a CD-ROM and distributed by mail.

“The technology is ideal for situations with salespeople in several different locations,” Saracino said. “It allows people to stay at their desk and order it on-demand. They can also refer to it later if they need a refresher.”

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