Vancouver firm rolls out off-the-rack video

Cloud-based online video production company SoMedia rides video boom, prepares to file initial public offering

Ready to IPO: George Fleming (front) and team prepare to take SoMedia public

If your business or organization doesn't have video on its website, don't be surprised if your page rankings on Google (Nasdaq:GOOG) start dropping.

Video has become an important search engine optimization (SEO) tool, because Google gives websites with video higher rankings than those without.

That poses a problem for small businesses that can't afford the $3,000 to $10,000 production costs of shooting and editing a video, which is why many web design and marketing companies don't even offer video as part of their product offerings.

That is changing, however, thanks to companies like Vancouver's SoMedia Networks Inc., which has spent six years and $10 million developing a cloud-based system that web design and marketing companies can use to provide white-label, off-the-rack video for their clients.

The company, which has raised roughly $11 million in angel investor funding since 2006, recently filed a preliminary prospectus for an initial public offering.

"As video became something that smaller businesses used, the problem of scalability and expense became a much bigger problem, and it was a limiting factor," said SoMedia founder and CEO George Fleming. "You have immense demand, but you have a problem with supply.

"What we have focused on is solving the scalability problem with video. The cloud allowed us to take the process of producing a video and break it down into its distinct functions."

Absolutecreative Design and Productions Inc. is just one of a handful of local web design and marketing companies that could never offer video to its clients before but now can, thanks to SoMedia's platform.

"Before, we weren't even introducing this to our clients," said Absolutecreative project and marketing director Persia Mohebtash. "For us, it's a new offering."

Founded in 2006, SoMedia has leveraged the converging powers of YouTube, cloud computing and crowd-sourcing to create a video production platform that allows web design and marketing companies to offer their clients video that was once out of their price range.

SoMedia specializes in producing 30-, 60- and 90-second clips for online ads and testimonials. The company has built up a stable of videographers, editors and producers around the world who work from SoMedia templates.

SoMedia doesn't make videos for the clients; it provides the platform for web design and marketing companies.

"Normally, they're able to sell videos to their customers at 30% to 70% less than a traditional video production company and still maintain a margin of 50% to 100% on the video," Fleming said.

SoMedia has also developed an automated video tool called Video Builder, which allows users to upload photos, music and text to quickly create basic animated videos, mostly for advertising.

"You can build an animation-driven video as simply as you can build a PowerPoint," Fleming said.

"I think there's a very large market for that, for sure," said Dave Araki, president of Media Button, which specializes in multimedia production. "There's a large market for online video, period. "

While he questions the wisdom of commissioning a video purely as an SEO strategy, he said there's no question that time-pressed Internet users prefer video to text and photos as a way of getting information in digest form. He also points out that YouTube is now the world's second most-used search engine.

"I still believe that if you're going to invest in a video, done properly, the power of its marketing benefits exceed the strength of scoring a little bit higher on SEO," he said. "Don't just add video for the sake of video or for sake of trying to score a few extra points on Google's algorithms – add it for the sake of providing a better user experience."

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