A young, European Ahmadinejad

At the end of last year, lefty blogger/policy wonk Matthew Yglesias mentioned Camera Obscura's song French Navy as one of the best of 2009. I had never heard of them, so I looked them up and listened to the song, which is quite catchy and retro. Below is the video, which features some scenic shots of Paris and Rome. Below the video are a few observations about it.



Observations:

- The band's lead singer reminds me a little of a JetBlue flight attendant with her outfit.

- The blond fellow behind her reminds me a little of the blond guy from Trainspotting (perhaps partly because the band is from Scotland).

- Cheryl mentioned this one first, but I concur that the bearded young man gallivanting around France and Italy with his girl in the video looks sort of like a young, European version of Iranian President Mahmoud Ahmadinejad.

What's with the music at Starbucks?

Sitting in one now doing some work on the new site, and they are playing something that sounds like Celtic Woman on suicide watch.

Les Paul, RIP

Just heard the news on the radio. The Iridium, where Les Paul used to play every Monday night until recently, has a classy obituary up.

About five years ago, I went to see Les Paul at the Iridium with a few colleagues and clients. I'm glad I got the chance. RIP.

The photo above of Les Paul comes from the Iridium's website.

Destiny Media Technologies: Still Losing Money

Destiny Media Technologies (OTC BB: DSNY.OB) filed its 10-Q announced its fiscal second quarter (November 1, 2008 through February 28, 2009) results today: a net loss of $97,882 (or less than one cent per share) on revenues of $467,488. These revenues represent a 30% increase over the same period last year, but a sequential drop of 16% from Destiny Media's fiscal first quarter. In today's press release, Destiny's CEO, Steve Vestergaard said,

"We're expecting our rapid revenue growth to continue as North American label usage continues to expand and new agreements are signed outside of North America. The company expects to show an operating profit based on Q3 revenues which are projected to increase at least 30% over Q2."

In response to this release, reader Albert left the following comment on the previous post:

I looked back at your posts talking about DSNY in light of today's earnings announcement. What management has told you seem clearly not to have materialized in any meaningful way. They are not profitable. Were not in the first quarter as they claimed they would be, are again not profitable in the second quarter. I am beginning to have real doubts about whether they will be any time soon.

I would also like to look at how their clipstream revenue has improved, if at all. Back last july, you said the CFO told you that clipstream revenue would take a big jump in Q1 I believe. If I have time, I would like to see how that has played out.

Any thoughts.

I spoke to Destiny CFO Fred Vandenberg briefly this evening; he didn't have time to talk but said he'd call me back in the morning, at which time I plan to ask him some questions of my own. But here are my initial thoughts response to Albert's comment. In my conversations with him, Fred Vandenberg has generally been conservative, but Destiny Media's CEO, Steve Vestergaard, has clearly over-promised and under-delivered with respect to his predictions of profitability. For example, in this press release on July 14^th, 2008, he said,

"We've built a foundation where we can confidently say we expect to be profitable by Q1 (Sept. - Nov.)

And in this press release on September 19^th, 2008, he said,

"The company is not seeking external financing and is looking forward to imminent profitability.”

As Albert noted, Destiny hasn't been profitable in either its first or second quarters this fiscal year. In addition, in contrast to Vestergaard's statement last September, the company notes in today's 10-Q that,

The Company will need to raise additional funds to complete its business plan due to its significant working capital deficiency.

Steve Vestergaard has at least been eating some of his own dog food though: Over the last couple of years he has been buying stock in DSNY, most of the time at prices well above current prices.

Albert is also correct in noting that Destiny Media's Clipstream revenues haven't improved as predicted, and that's one of the questions I plan to ask Fred Vandenberg tomorrow (if anyone has other questions they would like me to ask, please feel free to leave them in the comment thread, and I'll try to get them answered if I get them in time). I've been focusing more on the company's Play MPE revenues though. I plan to ask Vandenberg about this as well tomorrow, but, offhand, it seems like the revenues ought to be higher from this.

If you look at the Play MPE Stats, there were about 160,000 "sends" in the last 7 days. That's in the ballpark of the number I saw when I checked this a few weeks ago, about 170,000. A quick back-of-the-envelope bit of arithmetic makes me think that either revenues ought to be higher going forward or that a significant percentage of these sends are internal sends that don't generate revenue for Destiny. Let's say sends average 150,000 per week going forward, so 150,000 x 12 weeks = 1,800,000. Let's say that these sends generate revenue at the lower of the two price points Vandenberg mentioned in our conversation last month ("Destiny Media Update"), $0.50. Assuming no internal sends, that would be $900k in quarterly revenue. Vandenberg did acknowledge in our previous conversation that some of these sends were internal, and he did decline to estimate an average amount revenue per send, but maybe I can get some more clarity on this tomorrow.

Destiny Media Update

Destiny Media Technologies (OTC BB: DSNY.OB) mailed out a hard copy investor update booklet this week, which included the web address of a site that tracks usage stats for the company's secure music delivery service, Play MPE: Play MPE Stats. That site currently shows 189,577 "sends" in the past 7 days. Since Destiny Media gets paid per send, I called Destiny Media's CFO Fred Vandenberg to ask him what average fee the company received per send. Vandeberg didn't have an average number, but he said that Destiny generally charged $0.50 per send for major labels, and $0.60 per send for independents. He mentioned that some number of the sends might not generate fees for Destiny if these were between two individuals at the same label, for instance. Vandenberg added that if they found that this sort of traffic represented a significant percentage of the total, then Destiny Media might charge for these internal sends in future contracts.

I also asked Vandenberg about the company's Clipstream secure video delivery software. He said the firm was planning on promoting it more this year, and mentioned one potential application for it: dailies, the raw footage produced every day by film crews, which is later edited and synched to a soundtrack. Vandenberg said that, currently, dailies were transported via courier, so, for example, a film crew shooting in Vancouver might use Fed Ex to send its dailies to an editor in Los Angeles. With Clipstream, the film crew could send the dailies digitally instead. I asked Vandenberg if this was true for crews using old fashioned film stock too, i.e., did Destiny Media have some sort of technology to convert that to digital. He declined to answer that question. Destiny's second quarter numbers should be out in mid-April.

Below is a commercial, obviously modeled on the Mac versus PC ads, for Destiny's Play MPE secure music delivery service.