Destiny Media Tech Inc (DSNY)

[Lambert7]

Van or any other DSNY gurus, wondering your thoughts on this? … found it off the seeking alpha article … before i get accused by the board of being a dumper etc etc, I want to add that I am long to the eyeballs DSNY. Just looking for some kind of opinion on this constructive criticism posted by Nicroveta.

Link: http://seekingalpha.com/article/1914991-our-2014-double-destiny-media

To clarify, this is not a criticism, but we a're discussing an investment opportunity in a flat business valued at $100m+ with $4m of revenues. This is an approximate 25 x multiple within an industry valued at $40-$60m and well over 100 x earnings. This is very very high, for what it is - a digital courier solution. There could be some growth next year, but there has been little guidance on how much and would it justify the valuation?

So, if the current valuation is against the new product, Clipstream and its $3-$3bn target market, there needs to be a deeper review of the competitor landscape and incumbent solutions and providers - namely, encoding.com and zencoder.com - however there are plenty of others.

If Clipstream will be successful in this market, there should be a simple starting equation we can follow along the lines of:

Based on your video encoding usage and annual spend of $20,000 with encoding.com and $20,000 distribution costs with limelight (CDN), Clipstream would consolidate these relationships (benefit) and provide a superior service (benefit) for only $10,000 per year - saving of $30,000 (benefit).

Lastly, it's important to note that encoding.com and zencoder.com produce video formats that play across all devices and platforms, not just HTML5 compatible devices - hence they actually reach more consumers.

You need to see both their client list s (v.impressive) to understand the scale of the challenge Clipstream will face to pry these customers away without a very clear and guaranteed saving to take to those meetings.

With regards to the new markets mentioned namely, Pay Per View, Digital Video Advertising, these are very challenging ecosystems which require more than just cutting edge technology, 100% focus and top talent to be successful. Hence Clipstream will not compete here without huge investment and I would argue why would you want to when the market is saturated with fantastic products in both markets: spotify, netflix, itunes, amazon, tubemogul, liverail, adapt.tv, youtube

For me Clipstream has some value, sure, but this value is not clearly defined and quantified, specifically the value/cost comparison against the competitors would which be extremely interesting to see and not difficult to get.

If the comparison shows significant cost savings versus the competition, with all key customer requirements being equal or superior, then we have a basis for an investment decision.