Mr. Molina: USA Video Interactive began a journey in 1990 into the emerging video-on-demand (VOD) industry. VOD allows the end user to order and immediately access video content, such as a movie. We developed and introduced a new technology that allowed us to deliver different VOD applications via the Internet. One application allowed us to use VOD to provide educational content to classrooms; another delivered video e-mails for the advertising market. We also were refine testing technology we had developed to deliver movies via VOD. VOD, at that time, was in a very early stage of development. We filed a VOD patent in February 1990. It was a very broad patent on the delivery of video content to the end user. It was approved on July 14, 1992. We were obviously about 18 or 19 years too early. Between 1991 and 1994, we ran a test deployment in Irving, Texas, and we continued to develop our technology for delivering VOD. In 1994, we did a full deployment with Rochester Telephone, one of our partners. Rochester Telephone was an investor in the project and it helped us market VOD services to its customer base. We successfully provided VOD to 100 Rochester Telephone customers in Rochester, N.Y. There were only two other fully digital VOD deployments going on at the time - Time Warner and AOL had formed a partnership to deploy VOD in Orlando, Fla., and Bell Atlantic was providing VOD to 1,400 homes in Reston, Va. We were the only company standing at the end of the deployments with ownership of a very broad patent that covered VOD technology. We successfully completed our test deployment with Rochester Telephone. But investors weren't ready to accept this new technology as yet, as it hadn't been delivered in a commercial manner that would catch the attention of the general public. And because of this, the financing needed to take this concept and technology forward wasn't available at that time. Then in 1997, the market and general public began to understand the basics and promise of VOD, and we began to build out the proprietary technologies we had developed earlier to take advantage of the opportunity to deliver VOD. And we achieved a measure of success. But while there was demand for VOD, there was a major concern on the part of the content owners about the security of their content. Many of the companies we worked with to deliver educational content told us they could not put their content on the Internet unless we came up with a way to protect it. Then in the 2000 -2001 time frame, the dot-com and technology stock bubble burst, and financing for small companies like USVO dried up. This hurt us as well as a huge number of other companies. But we still had the technology we developed for delivering VOD. It was a wavelet compression technology. And we realized that it could be further developed into an anti-piracy solution, which our potential clients told us they needed. So we retained top technology experts and engineers to help evolve our technology into a forensic application to prevent piracy of digital content. We've been able to stay alive and correctly shift our company's primary focus by developing and marketing anti-piracy solutions for the entertainment and other related industries.
Tickers included in this excerpt: USVO
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