Greatest Hits

Virage service brings video clips to digital life

Barry Bonds hit another home run. Alan Greenspan discussed how to pull the economy out of the ruins of the Sept. 11 terrorist attacks. Madonna did something outrageous for the cameras — again. And the CEO of your company gave a speech this morning from corporate headquarters on the other coast that will affect the future of your job.

With the Web, news travels fast. And thanks to digital media technology, todays Internet surfers are not only reading about whats going on around the globe, theyre also seeing whats happening by tuning in to video clips at their favorite public and private Web sites.

But while news bureaus, corporate communications departments, sports organizations and other content providers agree that a moving picture is worth a million words, they dont necessarily want to invest millions of dollars building the infrastructure needed to deliver it on-demand to their audiences.

Thats where Virage comes in. The 6-year-old publicly held company is building a business around doing the grunt work for companies interested in digitizing, indexing, annotating and distributing their video assets online in a variety of popular digital media formats, including MPEG, QuickTime, RealVideo and Windows Media.

"In general, we help people take their video content and put it on the Web in ways that are interesting, interactive and entertaining," says Paul Lego, chairman and CEO of San Mateo, Calif.-based Virage.

Those "people" include more than 275 customers, ranging from major media and broadcasting companies such as ABC News, the British Broadcasting Corp., CBS, CNN, C-SPAN and ESPN to government agencies including the FBI and Library of Congress. It also includes a growing list of corporate customers, such as The Coca-Cola Co., Deutsche Bank and the New York Stock Exchange.

The extent of encoding, indexing and hosting that Virage does depends on the customer, Lego says. Virages Internet Video Application Platform is offered in two flavors: as software or a service. Companies interested in digitizing, or encoding, their analog video themselves can choose from a base system costing $20,000, or one with advanced media indexing and media management features that costs upwards of $45,000.

For companies that dont have the resources or desire to do the routine work themselves, Virage offers its platform as an outsourced service. Customers can expect to pay $15,000 to $20,000 for a one-time setup fee, and $300 to $500 per hour for the service. Virage will even do Web site design for interested customers. To date, Lego says, Virages earnings have been split evenly between its software licensing and service revenues.

What brought Virage to the attention of those people is "SmartEncode," a process that allows its technology to simultaneously encode video into a variety of digital formats at multiple levels of quality. At the same time, it "indexes" the video by identifying key frames, speaker names, spoken words and even the "faces" of those in the video. Indexing enables video to be divided into discrete clips that can be searched in a variety of ways.

For example, baseball fans tuned in to the Major League Baseball site can search on and view just the clips showing Bonds home runs during the latest San Francisco Giants game.

As part of a deal it signed with MLB in January, Lego says, Virage is encoding and indexing every game for immediate posting on the MLB site ( It also annotates the video with baseball statistics so fans can get the latest information on their favorite players and teams. MLB also hopes to make money off the archives; its Custom Cuts service lets subscribers create their own "reel" of highlights from more than 4,000 video clips posted daily.

Digitizing Ideas

Citigroup turned to Virage to help convert its "intellectual capital" — the financial information it collects and analyzes — into digital content. "The challenge is delivering ideas to end users, whether theyre our employees internally or clients externally, in whatever format the end user wants it, and in whatever location," says Chris Riback, a vice president of CitiMedia in Citigroups corporate and investment bank.

Meanwhile, Sunburst Technology, a Houghton Mifflin company, is testing Virages services as part of its effort to put online full-motion, full-length digital versions of the VHS videotapes it sells to the kindergarten through 12th grade educational market. Sunburst President Conall Ryan says the plan is to offer customers digital previews of its guidance and health videos. "With Virage, weve put our top 25 videos online, so customers can try before they buy them online, rather than send out physical tapes," Ryan says.

Despite its customer success, Virage has its challenges. Competitors include Convera and MediaSite — soon to be acquired by Sonic Foundry — and more Web broadcast services such as Yahoo! Broadcast, Lego says. And of course, the market for streaming media services, though on the rise, remains a tough sell in a marketplace where IT budgets have been slashed.

Still, Virages appeal is undeniable, especially to content creators with huge video archives, says Ben Rotholtz, general manager for Media Systems Marketing of RealNetworks, which counts itself a backer of Virage.

"Virages technology allows people to sell and distribute content in a way they never could before," Rotholtz says.