After reading Destiny Media Technology's Q3 release, I spoke with Fred Vandenberg, the company's CFO, earlier today. I asked him about the decline in revenues y-o-y from its Clipstream product. He said that Destiny's focus had been on the MPE service (in terms of development, sales, etc.), so Clipstream suffered somewhat from that neglect, but he reiterated its advantages over Flash (e.g., that it uses 90% less bandwith, that it requires less processing power, etc.), and also reiterated his company's prediction in today's release that Clipstream revenues would increase significantly in the company's fiscal Q1 (since Destiny's fiscal year begins on September 1st, Q1 will be the Sep-Nov quarter).
I asked Vandenberg if he was familiar with Aaron Edelheit's VIC write-up of his company, and he said that he was. In light of today's announcement that Destiny expects to be profitable in its Q1 quarter, I asked him if he thought Edelheit's estimate of ~10 cents per share in fiscal '09 earnings sounded on target. Unsurprisingly, since Destiny Media didn't provide a specific earnings estimate for Q1, Vandenberg didn't want to get pinned down on a specific estimate for all of '09, citing some variables earnings would depend on (e.g., how many contracts get signed, etc.). He did, however, reiterate his confidence that Destiny Media would be profitable in its fiscal Q1.
In his VIC write-up, Edelheit had predicted that most of the companies that were using Destiny Media's MPE service on a trial basis would become paying clients this year. I asked Vandenberg about this, and he said that had been the case so far this year.
Vandenberg also said that one factor holding back MPE revenues somewhat has been that the pricing system has been complex. In trying to make the pricing flexible, Destiny Media may have gone so far in that direction that they made it too complicated, and that complexity may be inhibiting some clients from using the service as much as they would otherwise. Vandenberg said that Destiny was in the process of simplifying the pricing system and that process of simplifying it should be completed within the next few weeks. He said simplifying that pricing should lead to an increase in MPE service revenues.