VMIX Views its Online Video Service as Silver Lining for Newspaper Industry
These are dark times for the newspaper business, which has been suffering from revenue erosion as classified ads, corporate recruiting, and other forms of advertising—not to mention readers—have moved to the Internet. You’d think that means the outlook also would be gloomy at San Diego-based VMIX, a venture-backed startup that provides Web-based software used primarily by media-owned websites to manage their video clips.
But the media world is full of contradictions. Even with its business focused primarily on newspapers, VMIX president and CEO Mike Glickenhaus tells me, “We’re still seeing steady, consistent growth.”
The reason VMIX has continued to grow—despite the recession and the decline of its newspaper customers—is that video is by far the fastest growing medium on the Internet, including newspaper websites. When I sat down recently with Glickenhaus and VMIX co-founder Greg Kostello, they told me they expect their revenue to grow by 70 percent this year—after growing by 170 percent in 2008. “We’re still not quite profitable,” Glickenhaus adds. “That’s probably still a quarter or two away.”
The outlook wasn’t always so optimistic. When Kostello started VMIX with co-founder Terry Ash in 2005, their idea was to create a website for video sharing and social networking. Their concept was an extension of what they had learned at MP3.com—one of San Diego’s biggest contributions to the dot-com phenomenon. Kostello, who was MP3.com’s executive vice president of technology, became president of Vivendi-Universal Net Technologies following Vivendi-Universal’s 2001 buyout of MP3.com. Ash, who was a senior vice president of advertising sales at MP3.com, also worked at Vivendi-Universal and Universal Music Group before VMIX.
“Even at MP3.com, we understood that video was going … Next Page »