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VRX Worldwide Inc. (VRW) |
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CEOCFO Current
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This is a printer friendly page! VRX Studios elevates online content to
a new level, providing innovative online sales and marketing tools to the global travel
and hospitality industries BIO: Content Licensing - VRX
owns and operates the largest archive of travel related interactive visual content in the
world. This content helps travel companies sell their products and services to the
rapidly increasing number of online travel consumers. From a target market of
hundreds of thousands of online travel companies, VRX currently licenses its content to
industry leaders such as Expedia, AAA, Carnival Cruise Lines, Virgin Holidays, Tourism
Hawaii, Mexico, and New York, Dollar Rent a Car, Cendant, and Southwest Airlines
Vacations. Licensing clients pay VRX a recurring licensing fee based on the amount
of content they use and the amount of traffic their website receives.
High Bandwidth Content Hosting
and Syndication - Levering off its Content Licensing infrastructure that was
designed to host and syndicate VRX’s
extensive library of interactive destination content, VRX launched two new service
offerings targeted at the online travel industry and its existing Licensing and Custom
Content Solutions clients. These two new services are High Bandwidth Content Hosting
and Online Content Syndication and ensure that VRX’s content is delivered flawlessly
and in a timely and user-friendly manner to travel consumers around the world.
CEOCFOinterviews: Mr.
MacLaren, please give us a brief history VRX Studios Inc. and what changes the company has
undergone? Mr. MacLaren: “VRX is a leading provider of visual content solutions to the travel industry. Originally, the company launched with an extensive archive of destination-related dynamic visual content of popular destinations throughout as the Caribbean, Hawaii, and the continental U.S. The content was created for online travel agents to use on their websites, to help them promote their products and services to travel consumers around the world. Over the years the company has added new products and services that include custom content solutions, content management services, and content syndication. To date, we have provided custom content solutions to companies such as Virgin Holidays, Disney, Carnival, Princess, Ritz-Carlton and Sandals.” CEOCFOinterviews: How does the custom content work? Mr. MacLaren: “We send photography crews from our head office in Vancouver Canada, to destinations all over the world. We work destination-by-destination, sending out several photography crews to each. We will shoot multiple hotel properties while in each destination along with various tourist attractions. Our goal on each shoot is to ensure our archive has comprehensive coverage of the major tourist attractions in each destination that we work in.” CEOCFOinterviews: Is it standard for most properties to have visual content? Mr. MacLaren: “Visual content is a broad term. Traditionally travel was sold using still imagery; we have all received brochures from hotels promoting their properties. With the advent of the web, the initial focus was on price and enabling online transactions. We are now seeing a change in focus; the online travel industry is slowly trending back to content. Visual content such as still images, 360-degree images, and videos are used to promote destinations and accommodations, giving the provider a competitive advantage over other online travel providers. Still images were the easiest to incorporate into online marketing initiatives but we are now seeing an increasing percentage of travel companies use virtual tours and videos online to promote their products and services. Good quality visual content helps consumers research and compare different travel destinations and accommodation options, enabling them to make more confident buying decisions. At VRX, we decided to focus on 360° virtual tours and interactive mapping because we’re able to offer high quality, user-friendly, content in low bandwidth environment. Virtual tours provide many of the same characteristics as video but are non-linear in nature. Video forces a viewer to start at one point, say in the lobby of a hotel and end on the adjacent golf course. This is great if you’re a golfer. Our solution combines enables viewers to choose what they want to look at and it what sequence. They can look at the lobby, at a one-bedroom condo, or at the pool. If you’re not a golfer, you may want to spend you time looking at the beach or the tennis courts instead. Being non-linear in nature, our solution enables viewers to look at the content that is relative to their life. To further enhance the usability of our content we integrate our virtual tours into interactive maps that we create of the hotel properties, resorts, and the destinations that we cover. Our maps graphically organize our virtual tours and give viewers a ‘birds-eye’ or façade view of what the property or destination looks like. Each virtual tour is represented by a camera-icon on the map that when clicked on pops up a virtual tour window. We feel that both video and 360° virtual tours along with interactive maps play a very important role in educating consumers." CEOCFOinterviews: How do you reach your customers? Mr. MacLaren: “Through partners and directly. For our licensing product, we work with partners such as USDM.net to promote our licensing products to tourism boards and travel agencies both in the US and aboard. On the custom content side, maybe 10% of what we do is sold directly. The remainder is sold through partners such as Expedia and Virgin Holidays. Both companies provide us direct access to hospitality companies around the world – both large and small. In North America and the Caribbean we have an exclusive marketing arrangement with Expedia.” CEOCFOinterviews: Is there much competition in this area? Mr. MacLaren: “The niche that we have made for ourselves over the past three years - providing high quality, user-friendly, low bandwidth online sales and marketing tools – has no direct competitors at the moment.” CEOCFOinterviews: Has the present state of the travel industry and the interest of people building up their websites been helpful to you? Mr. MacLaren: “There are two view points regarding the present state of the industry. One camp says that the industry is down and wonders how travel businesses will survive. The other camp says ‘yes, sales are down, lets increase our sales and marketing efforts to try and gain market share’. If we were going out and marketing our services directly to individual destinations and hotels, it would be difficult for us to sustain our current growth pattern. However, working with our partners has somewhat protected us from the downturn in the overall travel market.” CEOCFOinterviews: How often do you go back to a particular destination to upgrade? Mr. MacLaren: “We usually return to destinations about once a year to shoot destination content and cover new hotels. When shooting hotels, we try and work with the tourism boards to ensure our destination content is update and complete. Sometimes we can update our content in the studio without re-shooting - as long as a major has not occurred.” CEOCFOinterviews: What gives you your competitive advantage? Mr. MacLaren: “As in all industries there are technology providers and service providers, we’re a little bit of both. We customize third-party software to enable us to deliver the highest quality and best performing content technically possible. This is our competitive advantage and allows us leapfrog ahead of the market by focusing on the end product. In order to provide the best quality and best performing content, our efforts go well beyond the technology and the photography behind our products, it is everything that we do from shooting, to stitching, to editing, to delivery that gives us our full competitive advantage. We have spent the past three years perfecting our processes and the technology. We feel confident that these efforts have created significant barriers to entry for any future competitors.” CEOCFOinterviews: What is the financial condition of VRX? Mr. MacLaren: “Currently we generate 70% of our revenue from providing custom content solutions and the other 30% is generated from licensing and content management solutions. Our content management division is relatively new division but we expect it to represent about 10-15% of our revenue in 2003 and grow with our licensing division at about 20-30% per year. We released our year-end financial statements for 2002 last month. During the period we earned roughly $1.3 million in revenue and $350K in profit. It was a great year for us. So far in 2003, we have seen our growth trend continue. In our first quarter we saw our revenue increase to roughly $550K in revenue with about $250K in profit. This was our best yet and we predict 100% year over year growth in both revenue and profit for fiscal 2003.” CEOCFOinterviews: Do you see applications in other industries? Mr. MacLaren: “There are applications in other industries, but having said that, we are very highly focused on the travel industry; it is the fastest growing segment of online commerce. Over the next five to six years there will be tremendous opportunity in the growth of the online travel industry and that is going to be our primary focus. VRW, as a public company, is going to pursue other opportunities that will leverage the work at the VRW studios but most of that will be pointed at the travel industry.” CEOCFOinterviews: Why should potential investors be interested and what should they know about VRX that may not realize when they first look at the company? Mr. MacLaren: “I think the first thing investors need to look at is the rapid growth within the online travel market. Second, they need to watch the explosion of content that we’re seeing in all online sectors but especially in online travel. And third, they need to compare VRX’s content to all others. VRX, due to our partnerships with some of the leading travel companies in the world and the quality of our products, is positioned to benefit from the rapid growth and emerging trends of the online travel industry. As a result, combined with our solid financial position, we feel VRX offers a tremendous opportunity for investors, especially at the current price.” disclaimers |
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