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How Canadian tech companies are preparing for the ‘public eye’ as Shopify Inc’s IPO looms

National Post Tech Desk - Wed, 05/20/2015 - 12:40

Scott Miller has more than a passing interest in Shopify Inc.’s initial public offering.

The chief executive officer of Vision Critical Communications Inc., a marketing-software company, is eager to see how the first big IPO of a wave of Canadian technology companies goes because he’s prepping his own firm for the “public eye,” Miller said.

“We want to see it go extremely well because all it does is expand the options for companies like Vision Critical,” he said in an interview at Bloomberg’s Toronto office.

Those options include an IPO of its own, adding to its more than $40 million in private funding, or an outright sale, Miller said. “I can see over the next two to three years, all three of them having a certain degree of appeal and viability.”

Shopify is expected to begin trading this week with an IPO that aims to raise as much as $123.2 million. That would value the company at more than $1 billion. The Ottawa-based software company joins other tech firms including Stingray Digital Media Group that plan to tap public markets.

Vision Critical, whose clients include NASCAR and Banana Republic, sells software that helps companies build online communities of customers that can give feedback on new products and approaches.

With revenue of more than $100 million in 2014, the Vancouver-based company is coming of age as companies boost spending on everything from tracking shoppers on social media to buying online adspace. Marketing departments will spend $44 billion on software by 2020, an almost four-fold increase from 2014, according to venture capital firm Foundation Capital LLC.

Customer Feedback

Vision Critical’s “insight communities” have five million members worldwide. Customers enjoy getting a glimpse of new products before they hit shelves, while companies get better insight into what their target market is looking for, founder and chief product officer Andrew Reid said in the interview.

“Consumers don’t want to be dictated to, they want to have a dialogue,” said Ashu Garg, general partner at Foundation Capital who’s invested in marketing technology companies including Boston-based Localytics and Emeryville, California- based TubeMogul Inc.

Vision Critical’s clients pay on a subscription basis, depending on how many people they want in the community. After Colombian airline Avianca merged with TACA it used a Vision Critical community to help develop its flight attendants’ uniforms, inflight magazines and even the kind of food it served, Reid said.

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‘Competitive Space’

“The large companies in the space frankly have not figured it out,” Garg said by phone. “Whether it’s Vision Critical or TubeMogul or Localytics that can scale, I am a big believer that there is a massive opportunity.”

Vision Critical is just one among dozens of software-makers fighting for attention and money from marketers, Garg said.

“When there are big opportunities there are lots of people that see the big opportunities,” he said. “It’s a competitive space.”

Reid started Vision Critical in 2000 with his father Angus Reid, one of Canada’s best-known social researchers. The first project was an online focus group for female runners, he said. Miller was hired in 2012 after 12 years at market research firm Synovate Ltd.

Miller won’t rule out pulling the trigger on an IPO if the company sees the right opportunity. With the end of a decade-long commodity bull market and a drop in oil prices, Canadian investors are eager for technology offerings in a country where the industry accounts for less than 3 per cent of the benchmark equity index.

For now, the focus is on growing revenue and setting up the business so income and expenses are more predictable, he said. The company has increased revenue to more than C$100 million from C$5 million in 2006, Reid said. Recurring revenue from subscriptions is growing 30 per cent a year, Miller said.

“We can’t not get kind of excited by the ‘hey, Shopify’s going, when are you guys thinking about it?’,” he said. “At the same time, we have a fiduciary responsibility to do what’s right for our shareholders.”

–With assistance from Christopher Donville in Vancouver.

Bloomberg.com

Spotify Ltd adds video, podcasts to its streaming service in push for more ads

National Post Tech Desk - Wed, 05/20/2015 - 09:39

While saying that it’s still a music company at heart, Spotify says it is expanding is lineup to include podcasts, news radio and video streaming.

The company says it wants to help people create a soundtrack for their day that includes not only music but videos, newscasts and other content.

CEO Daniel Ek said that the new service launches Wednesday in the U.S., U.K., Germany and Sweden.

Spotify offers free streaming music and also a premium service for a monthly fee that includes extra features. The company didn’t say it is changing its cost structure.

Ek announced the new offerings at an event Wednesday in New York, highlighting content from the online media outlet Vice, along with Comedy Central. The videos will complement the Swedish company’s lineup of songs and other audio programming.

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Spotify joins other online-content companies looking to video to accelerate advertising growth, because marketers spend more for the spots than for audio, print, photo or text promotions. Facebook Inc. has expanded its use of video, as have have Twitter Inc. and publishers like the New York Times Co. and Conde Nast Inc.

“A digital video service from Spotify is a logical extension of the company’s success in digital music streaming, since these are complementary businesses that use much of the same technology infrastructure, marketing expertise, and vendor relationships,” Paul Verna, senior analyst at researcher eMarketer, said in an e-mail before the announcement.

Most of Spotify’s more than 60 million users around the world listen to its free, advertising-supported music-streaming service. The company makes most of its money from subscriptions, which cost $9.99 a month in the U.S. It has more than 15 million paying customers.

Of the more than US$1 billion in revenue Spotify generated in 2013, less than US$100 million came from advertising, the New York Times reported in November. The company isn’t profitable, the newspaper said.

Spotify faces increased competition. Apple is about the unveil a new subscription streaming service using some of the technology it acquired in its US$3 billion deal for Beats Electronics and YouTube is plotting a subscription video product.

With files from Bloomberg.com, The Associated Press

Rogers, Telus and BCE’s bid to delay wireless code of conduct rejected by federal court

National Post Tech Desk - Wed, 05/20/2015 - 09:17

TORONTO — The Federal Court of Appeal has rejected a bid by the country’s wireless service providers to delay the implementation of the wireless code of conduct.

The CRTC introduced the new code in June 2013 to give consumers better protection against high cellphone roaming charges and wireless contract cancellation fees.

Wireless operators including Rogers Communications, Telus and BCE Inc. launched legal action last July after raising concerns that some provisions of the code would apply retroactively to all of their customers once fully implemented.

In writing the decision for the three-member panel, Justice Denis Pelletier said the CRTC “has the right to make the wireless code applicable to contracts concluded before the code came into effect.”

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Once in force, the wireless code would require carriers to limit early cancellation fees, data roaming fees and overage charges, and imposes restrictions on the locking of wireless devices.

The code will apply to all customers, regardless of when they signed contracts.

“Given the CRTC’s intention to put more information into the hands of consumers so as to increase the dynamism of the market, it is reasonable to have all consumers on the same footing as soon as possible,” Pelletier wrote.

OpenMedia, which represented Canadians throughout the court challenge with legal experts, hailed the decision as a victory.

“This is a major win!” OpenMedia campaigns manager Josh Tabish said in a release. “By standing together, Canadians fought back against telecom giants in court and won.”

The Canadian Press

Analyst who long predicted Apple Inc would release a TV set forced to admit it’s not happening

National Post Tech Desk - Tue, 05/19/2015 - 12:38

By his own account, Piper Jaffray analyst Gene Munster has been predicting the introduction of an Apple TV “for the better part of the last decade.” However, following a report from the Wall Street Journal on Monday that the company decided to abandon this product line, he had no choice but to pen a mea culpa this morning, titled “Facing the Reality Of No Apple Television.”

“Given how adamant we have been about the reality of an Apple television, it’s hard to accept the reality of no Apple television,” Munster wrote. “While it is a small consolation that the article affirms that Apple was actually working on a television during that period, in the end we were wrong in our constant expectation of the product.”

Munster isn’t giving up on Apple entirely. Instead of launching a TV set, he thinks the company will be able to focus on making headway in “the real future of the living room,” perhaps with a foray into the virtual reality space.

“We note that over the past two years, Apple CEO Tim Cook has consistently highlighted the living room as an area of intense interest and described the TV viewing experience as broken,” Munster wrote. “We believe that Apple is actively working on early virtual and augmented reality products, although we may be 5+ years away from seeing these products launched.”

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And that, to the analyst, is the biggest disappointment stemming from this new revelation: “[I]t implies that the next incremental product category will take several more years.”

Another person who has to be disappointed is billionaire activist investor Carl Icahn. On Monday, he published an open letter to Apple Chief Executive Officer Tim Cook imploring Cook to expand the size of the company’s share buyback program immediately and explaining why Icahn had considered Apple’s stock nearly 50 per cent undervalued.

Icahn’s estimate for fiscal year 2016 was predicated on a new “Ultra High Definition television set” set contributing $0.87 to earnings per share. Without this, his projection for annual EPS growth decelerates to 16 per cent, from 25 per cent. His case for multiple expansion was also grounded in the company’s entry into both the TV and automotive markets, given the potential profit opportunities available in those areas.

Apple Inc trots out refreshed MacBook Pro and iMac ahead of WWDC 2015

National Post Tech Desk - Tue, 05/19/2015 - 11:09

Apple Inc. unveiled a new version of its popular 15-inch MacBook Pro laptop line as well as a refreshed 27-inch iMac featuring a 5K high-resolution display on Tuesday, weeks ahead of its annual developers conference where it usually announces hardware updates.

Apple’s 15-inch MacBook Pro laptop – starting at $2,449 – is set to feature a haptic feedback trackpad, faster flash SSD storage and extended battery life, bringing the device’s total battery length to approximately nine hours.

The “Force Touch” trackpad heavily touted during the new 12-inch Macbook’s initial reveal will also be featured in this version of the MacBook Pro. This new trackpad technology is pressure sensitive and is similar to the vibration technology in the Cupertino, California-based company’s recently released Apple Watch.

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Apple also revealed the new MacBook Pro is set to come equipped with internal storage that is two-and-a-half times faster than what was featured in previous models of the computer, as well as a dedicated graphics card. The new base model 15-inch MacBook Pro features a 2.2 GHZ quad-core Intel i7 processor, 16 GBs of RAM and 256 GBs of internal storage.

Additionally, Apple has plans to launch an updated $2,399 version of its popular 27-inch iMac home computer, which is set to replace the top non-retina iMac. The lowest-end iMac with 5K retina display features a 3.3 Ghz quad-core Intel Core i5 processor, Radeon R9 M290 graphics card, 8 GB of RAM and 1 TB of internal storage.

Updates for both Apple’s iMac and MacBook Pro have been expected by industry analysts, but a reveal was predicted to occur during company’s Worldwide Developers Conference (WWDC) in early June.

Industry speculation indicates Apple will finally reveal its music streaming service, as well as possible the company’s long-rumoured Apple TV, at WWDC in early June. Apple purchased Beats Electronics in a US$3 billion acquisition last May.

With files from Associated Press

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