Executive Summary

OVERVIEW

ClickStreamTV (CSTV) is a turnkey product that offers a complete media management system and delivery solutions to multiple platforms. CSTV was built with open source technology, allowing for multiple video formats and streaming to any computer system, browser and smartphone (Mac, PC, iPad, iPhone, BlackBerry, Android). Its open source technology also allows for quick updates and extensions to the infrastructure to make it compatible with new and expanding video technologies. Digital One recently added a self provisioning feature that allows users to sign up, enroll and design their player online without having to talk to a sales member to purchase. The single system handles all video management needs from uploading and encoding to archiving and publishing videos online. Clients using CSTV can stream video Live, On Demand and have the option to monetize their content with a pay per view player or advertising modules. Included in the system is a Video Email and address book tool, as well as a tracking system for evaluating media and video email effectiveness.

Digital One built the system with full integration with third party payment processing platforms to enable a seamless payment portal for CSTV's pay per view player. CSTV uses a Merchant Account (MA) to handle all credit card clearing transactions. Digital One partnered with ECSuite as their MA provider to ensure secure transactions for customers purchasing video content with a debit card or credit card. However, customers have the option of using a different payment processing provider of their choice, i.e. Authroize.net or PayPal (Payflow Pro).

In addition to Digital One's main product, the company developed proprietary switching technology between multiple Content Delivery Networks (CDNs) to provide seamless aggregated bandwidth to clientele broadband needs. Digital One wanted to provide SMBs with the same high quality streaming capabilities as large enterprises and made CDN delivery possible by designing CSTV to aggregate CDN bandwidth, allowing companies to leverage price and network resources. This means that CSTV can use a multiple CDN's within their system framework to deliver content. Currently, Digital One has partnerships with EdgeCast and LimeLight to offer high-quality streaming at an affordable price for CSTV clients.

STREAMING MEDIA MARKET

The streaming media market has evolved as technology continues to advance, improving the stability and quality of streaming media services and products. Many online sites began offering free services to stream non-professional, user-generated content. With the rising demand of streaming video online, businesses are more willing to pay for a more professional delivery service with advanced streaming features. Companies began to offer platform solutions for businesses at the large enterprise level to meet market demands.

Digital One recognized the high growth potential of the industry and lack of professional delivery solutions for SMBs as most online video platform providers offered solutions that required IT knowledge and are expensive to operate. Small businesses are define as having less than 100 employees, and medium sized businesses are defined from having between 100 and 999 employees. Most of Digital One's competitors focus on the upper medium to large enterprise market, offering solutions requiring IT knowledge at high costs. The untapped market of SMBs represents more than 90% of all global businesses, offering a large potential growth area for CSTV sales and revenue.

As a result, CSTV was developed to allow SMBs the streaming capabilities that once were limited to large enterprise companies. CSTV provides an easy to use infrastructure at an affordable price that SMB's can afford. Streaming media can become costly due to web hosting services, which store the video content, and CDNs, which provide the most efficient way of streaming media online by optimizing bandwidth usage. However, most SMBs do not have the resources to afford and manage web hosting services or CDNs. To provide an affordable solution for SMBs, CSTV was developed to aggregated bandwidth by using multiple CDN's to host and stream their client's content. Each client is provided with the limited bandwidth they need to stream efficiently at a fraction of the cost a business would pay if it went directly to a CDN.

Digital One recently expanded CSTV to allow video viewing on Apple's newest product the iPad, which uses HTML5 video formats. The iPad is one of the first streaming media products that does not use the popular Flash technology as Steve Jobs recently reported that Flash is dead and HTML5 formats will take over. Unlike closed source technology like Flash, CSTV utilizes open source technology to allow for multiple formats to allow video streaming to any computer system, smartphone, browser or plug-in. The open source technology also allows for quick updates and extensions to the infrastructure to make it compatible with new video technologies. Due to CSTV's unique system, CSTV can be used with the iPad and any future streaming video technologies.

In the streaming media market, there is also a shift to online media due to declining interest in traditional print and broadcasting media. As a result of this trend, businesses are turning to online media as a source for revenue. Digital One addresses these needs by offering a CSTV pay per view player. Currently, Digital One is expanding their self-provisioning feature to include pay per view players. Self-provisioning will make it easier for SMBs to begin monetizing content with online sign up, enrollment and self-design for their pay per view player. This feature is expected to be completed by mid-2010.

BUSINESS STRATEGY OVERALL

Digital One's overall business strategy is to offer an innovative, easy to use and affordable streaming media product for SMBs. The CSTV system eliminates the financial and technological burdens for businesses, allowing any size company the ability to stream video on the web. As streaming media becomes essential for businesses to attain the attention of their targeted audience as well as achieving business in a global economy, SMB's acceptance of online video will grow and they will need solutions they can manage. To meet the demands of SMB's and provide them the same high quality solutions provided to large enterprises, Digital One developed CSTV.

Digital One markets the CSTV product with a few approaches in order to expand the company's reach. Digital One uses a direct marketing and sales approach to SMB's utilizing online advertisements, social media and in-house sales team. Digital One also has a distribution partner program in which an in-house sales member seeks businesses that may partner with Digital One. These partners, ranging from large Telcos, software/hardware, mobile or web based service providers, will market CSTV to their existing customer base. The addition of distribution partners will create a greater sales force and reach to new industry markets.

The outlook for Digital One's future growth is based on the streaming media industry's growth and the demand for professional online video services for businesses. According to ComScore, the online video market is continuing to grow with over 178 billion U.S. Internet users alone watching streaming media. In the SMB market, over 25% of SMBs are expected to increase their spending for online video, according to Ad-ology Research. Digital One expects the combination of the industry's growth potential and Digital One's feature rich, easy to use and affordable system will continue to drive the company's growth and revenue opportunities.