5 Questions With…Sorenson Media CEO Peter Csathy

For today’s 5 Questions With…, meet Peter Csathy of Sorenson Media! The video delivery network’s partners include Samsung, Google (s goog), Sony (s sne), Verizon (s vz) and Avid (s avid); Csathy himself previously served as CEO of SightSpeed Inc. and, according to his blog, is a fan of both U2 and the Minnesota Vikings. Below, he talks about the importance of video quality, shares his favorite Social Network trailer parody, and reveals a recent vote of confidence in Sorenson made by its trustees.

1. What’s the one big issue/law/attitude/restriction you think is holding back the industry?

Quality. Plain and simple.  By this, I mean “quality” in every sense of the word — the quality of the video itself, the quality of the user experience. Video wants to be everywhere and consumed everywhere, because video can be uniquely powerful, engaging and compelling when it “works.” But, too many times it doesn’t — too many roadblocks still exist. There’s too much complexity and confusion on the capture, publishing, management and distribution side, and there’s too much complexity and confusion on the playback side. Complexity and confusion are antithetical to quality. The full power and promise of video will be realized when these macro-quality issues are solved.

2. What industry buzzword do you never want to hear again?

Video “monetization.” That buzzword has generally been used by the media in a very limited sense — i.e., the ability to monetize video content itself via a combination of ads, downloads, and subscriptions. While that’s certainly important for media companies and other content providers, that narrow definition of video monetization has little to no resonance with the other 95 percent of businesses online who can benefit in a big way by harnessing the unique power of video to better monetize their businesses themselves — that is, by using quality video to better market their goods and services, engage with customers and potential customers, train their staffs, share best-practices and maximize overall revenues. Ultimately, video monetization is simply about more effectively building your business.

3. If someone gave you $50 million to invest in a company in this space, which one would it be? (Mentioning your own doesn’t count.)

Right now, compelling over-the-top video services exist, but they lack deep content (movies, television programming) due to content licensing restrictions — so, they’re not truly compelling after all. Those licensing restrictions, of course, flow from the content providers’ fear of the unknown and deep vested interests — disruption to existing highly profitable business models. All this is understandable, of course. So, in an effort to maintain “business as usual,” severe limitations are placed on over-the-top delivery.

But, guess what — the genie is already out of the bottle. Now is the time to take the lead in Internet TV — not fight this reality. Now is the time to experiment with business models — subscription, paid downloads, paid rentals, ad-driven. Bottom line — I would invest in those companies that offer the highest quality experience (again, in every sense of the word — including content) to consumers in the living room on the big screen. Netflix (s nflx) is poised well here, even though its content is currently thin.  Then there’s Apple (s aapl) — you know they’ll make a big, big play in the living room — the opportunity is simply too massive. Sure, Apple’s upcoming re-invented iTV set-top box will be interesting. But, I still bank on Apple ultimately swinging for the fences — e.g., rolling out an all-in-one flat screen iTV (i.e., no set-top box) which will, as always, elegantly marry the hardware and software/service.

4. What was the last video (that you weren’t personally involved with) that you liked enough to spread to others?

In terms of pure amusement, I loved the recent parody of the movie trailer for The Social Network that used Twitter as the sacrificial lamb — absolutely hilarious. Yes, we have drama in the tech world, but the movie trailer for The Social Network is feverishly over-the-top.

In terms of a compelling and effective social media campaign, the recent “create your own” suspense movie trailer by Swiss Telecom for Lost in Val Sinestra was incredibly clever…and effective. You should check it out.

5. WILD-CARD: This spring, Ryan Lawler wrote about how the company’s assets shifting to a non-profit organization would potentially result in shareholders selling their stakes. What’s been the fallout of this, and has Sorenson’s new status affected its approach to serving video?

To clarify, a significant, but non-majority, shareholder in the company is the trust of the late James Sorenson, Sr. At a certain point, according to the terms of the trust itself, all trust assets (including its interest in Sorenson Media) will be transferred to a charitable foundation known as the Sorenson Legacy Foundation. Ultimately, the non-profit Foundation may need to divest its non-majority stake because of potential tax liabilities and other unique and highly complex circumstances, none of which has anything to do with a simple desire to sell.

Here’s the “new” news and only change in status to report. Just recently, the trustees of the Foundation voted to retain their shares of Sorenson Media instead of divesting them at this point. This is a strong vote of confidence in what we are doing and hope to keep doing, which is to provide the highest quality, differentiated video encoding solutions in the industry. This also means that we continue to be in a unique situation in our space because, unlike virtually every other private company in this space, we have no need to raise capital.

We simply do not face the same short-term pressures virtually everyone else faces in the industry. This does not mean that we are lax — far from it. But, it means we can more aggressively grow the business for the long-term.

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