Destiny Media Reports Fiscal 2006 Financial Results
Vancouver, BC – November 30, 2006 – Destiny Media (DSNY OTCBB) is pleased to announce results for the year ending August 31, 2006. Revenues increased 15% over the prior year. Expenses jumped 8%, but the net loss fell by 11%. The increase in expenses reflects growing adoption of the Promo Only MPE system, which was being offered on a subsidized trial basis during the period to build critical mass with radio.
Destiny is a market leader in providing software for “streaming” and “secure digital distribution” of digital media content, such as music or videos. Streaming is analogous to radio or TV and secure digital distribution is similar to distributing music CD’s or DVD’s.
Streaming products include Clipstream, which embeds audio or video into a web page and Radio Destiny which enables a live internet radio broadcast.
Secure digital media software products include : the Promo Only MPE music preview service, the MPE online music store software and PODDS, an online music store for DJ’s. PODDS is also tied into internet enabled jukeboxes which use the system to receive the latest music.
The Promo Only MPE service is the US music industry standard to securely transfer new music tracks from record labels to trusted recipients including radio station program directors and station managers.
Destiny first entered into a development agreement with Universal Music Group in June 2004. This was followed by a launch at the National Association of Broadcasting show in October 2004 and an offering to other major label groups when version 1.1 launched in March 2005.
Since then, an additional 31,000 songs have gone through the system from over 700 labels, representing 28 million transactions. The system is widely embraced by the industry, with paid agreements in place with five labels and strategic relationships established with many industry leaders, including Radio and Records, Clear Channel’s subsidiary Mediabase, All Access and Promo Only.
In reaction to feedback from the labels and radio recipients, Destiny has released several upgrades of the system this year, adding Mac support, Spanish support for Latin stations (and templates to support other languages), licensed iPod support and support for downloading music videos. As the labels stop sending physical CD’s and the system becomes mission critical, it is important that the system be extremely reliable. The server infrastructure has been upgraded to two physical locations with connection speeds up to a gigabit for scalability to global usage. Preliminary international pilots began this fall in Europe and Australia.
In September, Destiny announced Canada’s first online music store for commercial users. This store is based on a new suite of programs for providing encoding, administration, database access and iTunes style player access to the storefront. The company expects to license this software suite to other companies wanting to set up online music stores.
In November, we announced a patent has been filed on our digital watermarking technology. This technique will embed information into sound recordings that identify the originator of illegal copies. It is unique in that it survives analog duplication and compression, but is not audible to the human ear. This is our second pending patent in the music space.
Clipstream was featured in Quirks, the market research industry trade journal in July and we have formed relationships with a number of top companies in the market research vertical, including Global Market Insite (GMI), which provides solutions to 21 of the top 25 market research companies.
In June, the company announced an IP-TV version of Clipstream, which allows consumers to watch television from remote locations. The customer can log into their home PC from any location, anywhere in the world and watch live TV and change channels from their web browser.
Other top verticals for Clipstream include advertising, surveillance applications, podcasting and user generated content. With the recent success of video sites such as You Tube, many customers have approached us to set up “user generated content” and “file sharing” networks. A new Clipstream server offering, featuring real time web based encoding is anticipated to be released in December.
Two new streaming products are due in Q2: A major upgrade of Clipstream, featuring 30 frames per second and full screen video and a CD quality social network based around Radio Destiny and Clipstream Live Video.
Comments Destiny CEO, Steve Vestergaard, ”The focus this year was on R&D and adoption of MPE to get the seeds in place for 2007. There are so many synergies among our products that we have become the ‘one stop shop’ for content owners who plan to embrace internet technologies.
“We are excited about our new streaming offerings and their potential to grow our business. In addition, our secure digital distribution revenue is expected to increase significantly in 2007 as labels continue to reduce the number of physical CD’s they send to radio and the transaction based revenue model is fully implemented. Earnings in 2007 should be strong. Much of the expense associated with the system is already being incurred, so we expect new MPE revenue will be high margin.”
1. The gain on settlement of debt of $57,308 includes a gain on settlement of a legal services dispute of approximately $23,500, net of a loss of $6,500 on settlement of a license dispute.
2. The total accounts payable of $180,308 includes approximately $56,531 of amounts the company has disputed and where the invoices are three to five years old and $31,500 payable over the next ten months in equal installments pursuant to settlement of a legal services dispute.
3. Accrued liabilities includes $54,819 in vacation accrual and $41,400 in accrual for professional fees yet to be invoiced.
4. Due to shareholders, unsecured, due on demand, non-interest bearing
About Destiny Media Technologies
Destiny Media Technologies, Inc. (www.dsny.com) (DSNY.OB) is a leader in developing easy-to-use tools for distributing media through the internet. The company's suite of streaming and downloadable products includes: Clipstream ™, Destiny Media Player ™, Radio Destiny ™, and MPE ™. Established in 1991, the company is headquartered in Vancouver, Canada.
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"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, reliance on key strategic alliances, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.