It’s easy to forget how rapidly online video has exploded into our national consciousness. Prior to YouTube ($GOOG) launching in 2005, streaming video was rare. In just ten short years, streaming online video has gone from a relative rarity to billions of views a day. Anyone with a cell phone can shoot a video and share it instantly with millions.
However, the proliferation of amateur video has made one thing particularly clear: quality is very inconsistent. The massive impact made by professionally shot video in terms of its effectiveness, visual quality and sound is immediately apparent when you see the sort of amateur stuff that regularly shows up on YouTube.
This presents a clear dilemma for companies looking to add more video. It’s an essential piece of any viable marketing plan and it’s needed in quantity. However, that quantity can’t come with a sacrifice in basic production quality and that basic production quality can be very expensive. Particularly for smaller companies, the cost of a pervasive video campaign can be back-breaking.
One solution, though, may come from VidWrx ($VID:CA). By acting as an on-demand provider of video production, essentially an Uber of video production, VidWrx is connecting advertisers and corporate marketers with the videographers, producers, editors and everyone in between who can do the job, creating an opportunity for companies to get quality video- at a cost they can manage.
Equities.com talked with George Fleming, VidWrx’ Chairman and CEO, about how his company’s disruptive approach could help change the nature of video production and marketing today
EQ: Why don’t you begin by telling us a little bit about VidWrx.
George Fleming: VidWrx is all about the scalability of video production. We focus on solving the problems generated by the creative process involved in making video. Video has been produced the same way since video began, with a handheld camera and creative people in control of the outcome. That has made it hard to reach predetermined outcomes.
When video was a rare, more expensive product that was not as big an issue. But video has moved from being nice-to-have to need-to-have. Video’s functionality matters more than the high-level creative value that used to drive its value. If you have a website, you need to have a video profiling your business on it. If you sell products, you need to have videos of your products. If you have clients, you need to have video testimonials. These videos don’t require tremendous amounts of creativity. They require speed, efficiency, and quality. The problem is that video production, as it stands now, is not built around speed and efficiency.
That’s what VidWrx is all about.
EQ: You're operating as the Uber of video production, serving as the go-to platform to connect a very fragmented market. Can you give us more details of VidWrx' platform and how it works?
George Fleming: The Uber comparison is one that a lot of people have made. It all started last fall. We were speaking to an analyst at an investment bank and we hadn’t really thought of ourselves that way before, but it’s a good way to explain how VidWrx works.
With Uber, you don’t know who the driver is, you don’t pay them, you rely on the fact that Uber only accepts drivers who have nice cars and know what they're doing. Your relationship is with Uber; you’ve trusted the fact that they have put this all together.
VidWrx works in very similar way. We have a network of about 3,400 videographers across North America. To be called a VidWrx videographer, you have to have proven your capability and experience. All of our videographers bring their own gear and that gear has to meet certain quality requirements for professional-level gear, and they’re ranked and rated by skill level on our platform.
Our clients go online through our cloud-based platform and order the length and type of video they want. There’s a short online questionnaire providing us with some basic creative details and requirements. Once the video is ordered, a dedicated VidWrx Producer is assigned, a plan finalized, and a videographer arrives on site at a predetermined time to shoot the video. Ten days later, the client receives an email saying his video is ready, he screens it, provides feedback, and the final video is delivered.
The videographers work for us on a flat rate, per-job basis. They are content gatherers; it turns the whole process into a consistent model. We’ve turned video production into something which is as simple and accessible as a ride is on Uber. Our video production services are available on demand anywhere in North America in unlimited volume at some of the lowest price points in the market.
EQ: Facebook ($FB) now has over 4 billion video views a day. YouTube is close behind. Does this speak to video becoming the Internet’s preferred medium?
George Fleming: It's all about ROI. The effectiveness of video as a marketing and advertising tool surpasses every other form. Google gave us some numbers showing that video ads receive 27-times the clicks that other forms of advertising do. There’s plenty of data that proves that video drives higher clicks, higher conversion rates, higher retention rates, and higher visit rates. In other words, it's the best form of Internet marketing there is.
That means that companies are looking to do comprehensive video campaigns. This has caused a huge problem in the market because, for agencies and corporate marketers, the cost of producing video content is huge because the only way available right now is to go to a traditional video production company.
That’s why we've launched programs for Google partners to offer them very rapid turnaround videos at a low cost. We’ve integrated with Facebook and YouTube so that our clients can use our video ad platform to order the content, track productions, and upload it directly into their campaigns.
EQ: You're providing a full service, start-to-finish product for your clients.
George Fleming: VidWrx has been built to become the world's largest video production provider. To do that, it has become a turnkey, front-end solution where ordering video is simple and easy. A great analogy is to building websites in the 1990s. Back then, when you needed a website built, you went to a web development company and they would build it by hand using HTML. From there, templates and software came out that made it easy to build your site. Today, you can go online and get a free website from Wix ($WIX) or GoDaddy ($GDDY).
If you look at video, it's at the same point that website development was in the 1990s, still complicated and expensive. What VidWrx is doing is focusing on making it more simple, accessible, and affordable.
EQ: In terms of your growth initiatives, what are some upcoming milestones that we should be on the lookout for in terms of your strategy?
George Fleming: We built the company by developing a network of Internet marketing and agency partners. We’ve signed over 4,000 of them so far, but can easily identify about 85,000 companies who provide Internet marketing services - we've just scratched the surface. As a matter of fact, of those 4,000 we signed only a little over 10% have turned into active buyers of video. Online video is still a relatively new marketing tool, so only about 25% of them were dealing with video production before VidWrx came along. The use of video and the evolution of this market is making a steady march forward, which will drive a lot of growth.
Beyond that, we've integrated our video production platform with over 20 marketing, social and content management platforms that contain tens of thousands of users; platforms like Eloqua ($ELOQ), Marketo ($MKTO), SalesForce ($CRM), ExactTarget ($ET), ACT-On, and Hootsuite. We started integrating with them last year because there was no other video production solution helping businesses create video content.
In addition to our Facebook Video Ad Program, we've recently announced an expansion of our Google Partner Program. It now includes special incentives like free videos and volume discounts for agencies looking to produce more video ads for their clients. Google has been moving forward rapidly to increase YouTube advertising revenues. That’s providing a big opportunity for us. Google has a problem with YouTube in that it's mostly large national brands advertising on it right now. Small to medium sized advertisers, which make up a large percentage of Google’s revenue base, are not being attracted to YouTube at scale because producing video ad content is expensive, time consuming and complex. That’s a big challenge for Google.
We began doing a test with Google last fall where they offered a free video ad to select partners. Google partners are Internet marketing companies and agencies who, for the most part, handle online marketing and website development for small to medium business. What Google was trying to do was see if a free video ad incentive would start to prime the pump and get these agencies offering and producing video content for their clients. Basically, Google is paying VidWrx to produce video ad content for some of their agency partners. It’s a wonderful thing when a company like Google is promoting your products and paying people to use them.
We anticipate Google ramping up this program even further, to entice more agencies and businesses into producing video ads for YouTube. We’ve already seen Google Canada getting involved as well which is a great sign.
We also recently signed a deal with the Yellow Pages in Canada to become their national video production provider, and we're starting to talk to Yellow Pages in the US and in Europe.
We also recently announced deals with multi-location businesses like Maaco Auto Body and AAMCO Transmissions. These are companies with hundreds of locations, I think Maaco has about 450 and AAMCO has about 700. We see the opportunity with a lot of other large multi-location companies or franchise organizations who are determined to start advertising online and via mobile devices using video content.
We’ve spent a long time developing our systems and capabilities. Our platform is battle tested, and we’ve sold over 3,000 videos so far. We entered 2015 with a sales back order of around $1.2 million. VidWrx has been busily building our credibility to position us as the only truly scalable video production solution at a point in time when the market really needs it.
Disclosure: In the purview of Section 17(B) of the Securities Act of 1933 and in the interest of full disclosure, we call the reader's attention the fact that Equities.com, Inc. may be compensated by the companies profiled in the Spotlight Companies section. The purpose of these profiles is to provide awareness of these companies to investors in the micro, small-cap and growth equity community and should not in any way come across as a recommendation to buy, sell or hold these securities. Equities.com is not a registered broker, broker dealer, investment advisor, analyst, investment banker or underwriter. All profiles are based on information that is available to the public. The information contained herein should not be considered to be all-inclusive and is not guaranteed by Equities.com to be free from misstatement or errors. Readers are reminded to do their own due diligence when researching any companies mentioned on this website.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer