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Zoovio secures nationwide distribution deal with Radio Shack

Written by: Matt Bunk

Nick Ressler flipped through the loose pages of paper where he had jotted down dozens of catch-phrases summarizing the marketability of his new technological break-through before he gave up and decided to let a fictional advertising executive explain it for him.

“Have you ever seen the show ‘Madmen?’” he asked. “The scene where these ad guys pitch the Carousel slide projector to Kodak is what I’m talking about.”

Moments later, the computer screen in Ressler’s dark, cluttered office was blasting a clip from the retro television show that focuses on Don Draper, a character portraying the life of a Madison Avenue advertising big-wig in the mid-1960s.

(Photo by Matt Bunk) Zoovio founders Marlo Anderson, Nick Ressler and Alice Anderson demonstrate the digital video service that transforms old home movies into digital files that can be stored securely in an online vault. The Mandan-based company recently signed a distribution agreement with Radio Shack.

Ressler leaned way back in his chair, put his hand over his mouth and watched Draper explain to two mesmerized Kodak executives that many products do nothing more than soothe consumers’ insatiable itch for new technology, while others have a rare ability to create a sentimental bond with people by satisfying a craving to hold onto the past, preserve memories and cling to nostalgia.

“That’s what Zoovio is,” Ressler said, satisfied that the video clip explained it better than he could. “What we’ve created is a time-machine.”

Ressler is part of a small team of techno-geeks behind the development of Zoovio, a web-based service that transcodes all formats of old video tapes into digital files that can be stored in a secure online vault. The videos can be shared, stored and edited at www.Zoovio.com.

Zoovio is targeting the large market of people who recorded home videos on reels or video tapes during the past 50 years and then stored them when they became obsolete. According to some estimates, there are more than 7 billion home videos stashed away in attics and basements across the U.S.

What Zoovio does might not seem entirely new at first glance. Products are available to turn VHS tapes into DVDS. Some types of computer hardware can store large volumes of digital files. And myriad brands of editing software allow people to improve their old videos. But none of them offer the flexibility, efficiency and timelessness of Zoovio.

“Zoovio ends the madness,” Ressler said. “Every time a new format comes out – VHS, beta, DVD, Blue-Ray – you have to go out and buy new equipment. We don’t know what’s coming next, but when you upload your videos onto Zoovio, you have a digital copy forever. It’s always stored in the online vault.”

Jane Faiman, a 50-year-old Mandan resident, said she took dozens of old videos to the Zoovio team when she heard about the technology. Many of the videos had been stored away for years after her family got rid of their VHS player. Some old reel-to-reel films of her now-deceased father had been packed away for decades.

“What good is having all of those memories if you can’t see them?” Faiman said. “Every household has a box of videos of their family, and most of the time nobody has seen them since they were taken. But with Zoovio, you never lose those memories. They’ll always be available, even to my kids and grandchildren. That’s priceless.

Landing a deal with Radio Shack

The creators of Zoovio spent four years and nearly $1 million to develop the technology. The key to all of it is the ability to transcode and store hours of video recordings without reducing quality or taking up large amounts of space on a computer hard drive. The programming behind the vault and transcoder is a trade secret that Ressler and his partners refuse to talk about.

And there’s good reason for the secrecy.

Zoovio Inc., the Mandan-based company that shares a name with its product, was awarded a contract with Radio Shack in March that will put the transcoding technology in about 6,000 corporately owned stores nationwide. Right now, Zoovio transcoders are installed at 16 Radio Shacks across the country, and the two companies are working together to distribute thousands more by the end of this year.

Ressler said preliminary estimates show the company could top $75 million in revenue during the first year of the contract with Radio Shack. And those estimates, he said, are conservative.

When all Radio Shack stores are equipped with Zoovio, they will have the capacity to upload more than 8 million old videos into the vault every year. The consumer price to transcode a video will start at a minimum of $20, depending on the running time of the video, with the revenue shared by Radio Shack and Zoovio.

To put it another way, if Zoovio taps into 1 percent of the home video market, revenues will far outpace the preliminary estimates. Letting people know that the service exists is the next challenge.

“Once we supply all of the Radio Shack stores, we will roll out a national promotion,” Ressler said. “Radio Shack wants us to be a household name like Microsoft and Google.”

With so much at stake, the Zoovio founders have decided to hire additional staff members – Mandan Mayor Arlyn Van Beek recently accepted a position as national sales director. And as many as 100 employees will be needed to handle the workload after Radio Shack launches Zoovio nationwide.

Each Radio Shack store will have the capability to transcode VHS tapes, the most common format for home videos in the U.S., without assistance from the Zoovio team. But all other video formats will be shipped to Zoovio headquarters where they will be transcoded and uploaded to the Zoovio web site.

“We’re going to need a lot more people to handle that,” Ressler said. “There’s no way to speed up the process. If you bring in a six-hour video, it will take six hours to transcode it.”

Already, the Zoovio team is looking for a larger space. The five-member team works at the Awesome 2 Products computer services store on Main Street in Mandan, but the building will soon be too small to hold the Zoovio inventory and additional staff.

Marlo Anderson, another techno-geek who helped create Zoovio, said the company plans to keep its headquarters in Mandan, even though economic development officials from other states, including South Dakota, have tried to entice Zoovio into moving.

“Our goal is to stay in Mandan,” he said. “The company was founded here, and we want to keep our headquarters here.”

Two techno-geeks, one great idea

The whole idea behind Zoovio was hatched in 2008 when Anderson and Ressler were driving home from a trade show in Dickinson. During the 90-minute drive, they brainstormed ways to enhance the computer and digital video services offered at Awesome 2 Products.

Ressler was sitting in the passenger seat and surfing the web with Anderson’s smartphone when he stumbled upon statistics that indicated there were billions of home videos collecting dust.

“The number was mindboggling,” Ressler said. “We were already converting video tapes to DVD, but when we realized how many old tapes were just sitting there, deteriorating, we thought if there was a place to put your videos online it wouldn’t matter what format was developed in the future.”

By the time they arrived in Mandan, they had a rudimentary business plan in mind. They knew they needed a programmer to build an online vault to store a massive number of digital videos. They knew it would take quite a bit of investment capital. And they had already decided on the name Zoovio.

“They were freaked out and excited about it right away, both of them,” said Alice Anderson, Zoovio’s chief financial officer and one of the company’s three founders. “Whenever those two get together, they always come up with a bunch of wild ideas. But Zoovio was different. They knew it had a lot of potential.”

The problem in the beginning was that very few other people realized Zoovio’s potential. After enlisting programmer Beau Hastings to create the online vault, Ressler and the Andersons began looking for investors who could put up enough money to keep the project going until the product launch. A few individual investors bought into the concept, but investment firms were reluctant.

After about two years of independently funding the project, the Zoovio founders got a big break when an authorized dealer of Radio Shack products in Detroit Lakes arranged a meeting with the Andersons and a corporate executive for Radio Shack. The Radio Shack executive was so impressed with Zoovio that he set up a second meeting in Las Vegas to discuss a distribution agreement.

“I don’t know how people get a product to market in this country,” Ressler said. “Without our guy in Detroit Lakes, I don’t think we’d have gotten in front of the Radio Shack executives. It’s almost impossible to get the attention of buyers for large companies.”

Getting in front of Radio Shack was a bigger challenge than convincing the retail giant to consider a partnership with Zoovio, Ressler said.

“It was one of those conversations where Marlo and Alice started presenting reasons Radio Shack would benefit from Zoovio, and then it changed into a conversation where the Radio Shack executive was explaining why Radio Shack would be a good fit for Zoovio,” he said.

Predictably, after the Radio Shack contract was finalized this spring, investors began lining up to buy into Zoovio’s future. And when Zoovio won the technology award at Innovate ND last month, along with the $15,000 cash prize, investment fund managers began approaching the company with plans to help expand Zoovio to international markets.

Alice Anderson said investors started “coming out of the woodwork” after word got out about the Radio Shack contract. She said it’s good to know money is available if needed in the future, but the real blessing was the commitment from people who believed in the product since the beginning.

“We had a few people in our corner from the beginning, a handful of people who believed in us,” she said. “None of them are getting rich yet, but at the end of the day they will be happy that they did this.”

-Matt Bunk is publisher of the Great Plains Examiner.

 

 

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Comments

  1. I have watched them develop Zoovio and am glad for their success. Also i’m wating to see the other elements of their progrm come to life also

  2. It’s amazing how individual effort and having a dream can develope into a small business and succeed. Pioneers of the future still exists! Dream on!!!

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