Keith Kocho, Founder of Extend Media

There is a race underway to capture a new kind of consumer – one with a perpetual advertising channel on her hip.

Among the technological suitors vying for a 7×24 connection to Jane Q. Public is Toronto- and Boston-based ExtendMedia.

“I’m kind of an accidental entrepreneur,” says Keith Kocho, ExtendMedia’s founder. “When I was a kid I had paper routes but I didn’t have dreams about starting a company.”

What Kocho did have was a passion for computing.

“I was interested in how computers could be used as a communications tool as opposed to a commercial tool. I maxed-out my student credit card to get my first company started,” says Kocho.

Like many successful tech companies, Extend finds much of its definition in a commitment to having a people-first culture.

“There was never that big IPO or home run acquisition, but we’ve always been in advance of being cool,” says Kocho. “We had an open concept workplace with stock options and a beer fridge and people’s kids and dogs running around before Silicon Valley was even waking up to those kinds of ideas.”

Extend’s employees passed on the best part of the companies culture by volunteering to raise funds for local causes while evangelizing the corporate brand.

“We used to have a staff party-slash-fund raiser-slash-recruiting event every year,” says Kocho. “Times were great.”

But in the late 90s, the dot-bomb dropped and took the market with it.

“Fire me”

Despite pressure from his board of directors to take Extend in a new direction, Kocho stuck to his guns.

“I told the board they’d have to fire me,” Kocho says. “They didn’t.”

“Those of us who were left kept our heads down and worked hard for a few years,” he says.

Today, ExtendMedia provides software and services that enable content providers and distributors to quickly deliver and monetize online content over various devices.

They are headquartered out of Boston with production facilities in Toronto.

Now, some 16 years after Kocho financed his first company with a credit card, ExtendMedia is poised to become the de facto technology of online digital media.

Monetizing media, safeguarding content

Distributing top-flight content through the web is a balancing act between giving the consumer what they want and protecting ownership rights.

“We believe our clients will find the best ways to protect themselves,” says Kocho. “We want to help them monetize it.”

Extend’s foundation product, OpenCASE, provides the ability to support multiple business models from one platform, plus the flexibility to launch new models as markets shift.

Extend’s clients he can define conditionals such as “two play rental” or “burn twice” while the end-consumer gets the choice of viewing subscription, ad-supported, or pay-per-view content.

“Digital media is getting in to a new business model and it’s very early days yet,” says Kocho. “Right now companies are just trying to keep their brand present and get into the space without too much risk.”

To keep their product offerings fast and flexible, Extend’s OpenCASE platform comes with a generous basketful of plug-and-play APIs and a fully hosted solution.

“We outsource the cage but operate the NOC, says Chris Gardner, chief marketing officer. “There’s also a series of modules for capturing user data, a customizable UI and a quality storefront.”

For now, most clients are using a hosted solution to get out of the gates, but more and more are looking for ways to host Extend’s technology on their own. And that’s where they offer a key differentiator – it’s the only company in its space that offers an enterprise solution.

“Like everything else, the early adopters tend to start off on the ASP model,” says Kocho. “But big companies have a pre-disposition to acquire technologies.”

He believes it is likely that the sensitive nature of ownership rights is going to drive a future ‘in-sourcing’ trend amongst their clients.

“The last thing rights owners want to do is give up margin on business,” Kocho says. “We expect clients will eventually bring the technology in-house to gain scale of capability and control.

“Rights owners want to protect their crown jewels.”

The key to courting Jane Q.

If Disney, HP and other potential players want to hang with Jane Q., they need to meet her where she lives.

Keeping up with Jane 24/7 is a daunting task but it also provides advertisers some very sexy opportunities.

“Everything from pure brand exposure to intelligent target marketing,” says Kocho. “It can look at things like where you are and what you’ve used your profile for recently.”

Key to staying top-of-mind with consumers is managing an efficient user experience across multiple devices and platforms. Extend attacks this challenge by allowing the user experience to take place through a series of exposed programming interfaces (.COM, .NET, ActiveX) for easy integration with existing players, web pages or other applications.

“You need to deliver a solution that’s seamless,” says Kocho.

In order to get with Jane, you need to get smart.

Big media tries to beat the curve

“Hollywood has made a lot of money doing unique deals,” says Kocho. “They do that on purpose.”

“If there’s no list pricing you negotiate whatever you can get.”

Extend believes that major rights owners fear controlled distribution is approaching its final-run, which makes the Disneys and Wal-Marts of the world intent on mastering the monetization of the emerging digital media market.

“Controlled distribution going away represents a platform opportunity for companies that value consumer intelligence to get a leg-up on the competition,” Kocho says.

To provide the footstool, OpenCASE supports a healthy consumer IQ via the platform’s Media Agent. The Media Agent manages authentication, delivering and revoking of licenses, plus reporting.

This intelligence – details on consumer downloads, service errors and interactive ad response – helps clients improve services and refine marketing plans.

And all that consumer intelligence goes a long way to keeping Extend’s clients in good with Jane Q.

A fresh outlook

There are several indications that Extend’s long-term strategy is paying off. First of all, they’re hiring.

“We have about five or ten jobs in Toronto we are hiring for now,” says Gardner. “Mostly developers positions.”

As the company continues to add to its human arsenal, Extend has also been the beneficiary of recent product awards and financing.

On May 1, 2007, Extend was named one of the OnHollywood 100 Top Private Companies for its innovation, market potential, customer adoption, media buzz and investor value creation.

And on April 6, 2007, they received a $12 million injection of venture capital. The money will be used to accelerate sales and boost product innovations.

One of those innovations – a soon-to-be-released addendum to the OpenCASE product suite – will allow advertisers to dynamically refresh ads stored on Jane Q’s device.

“The game now is to say ‘Spend $50 or $100 on cable and it’s all-you-can-eat,’ or ‘Go pay-per-view and have it your way,’” says Kocho. “Extend’s bet is that the monetization of digital media will settle somewhere in the middle.”

Odds are, the winner will be whoever finds a way to capture and hold Jane Q’s fickle eye.