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INNOVATION: Company Frames Its Business Around Demand for Video

IMAGINE COMMUNICATIONS

CEO: Richard Stanfield.

Revenue: Undisclosed.

No. of local employees: 10.

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Investors: Carmel Ventures, Columbia Capital and Court Square Ventures.

Headquarters: Carmel Valley.

Year founded: 2004.

What makes the company innovative: Offers a unique way to process video.

Key factors for success: Demand for mobile video, consumer taste for video quality, consumer desire to watch video while conserving bandwidth.

Richard Stanfield and his company’s venture backers have a strong interest in how people consume video. Consumer preferences are changing.

Stanfield and the investors behind the binational company, called Imagine Communications, are betting they can make money as the tide shifts toward more video on computer screens — particularly on the screens of portable devices such as smartphones and tablets.

Locally based Imagine, which markets its products under the name ICE, enters the picture by “solving problems in the video world,” Stanfield explained.

Imagine offers its customers digital video processing or “transcoding,” accomplishing that through a hybrid hardware and software platform. The technology produces better video quality, Stanfield said, and conserves bandwidth at the same time. What’s more, the platform accommodates every type of device receiving video, he said, whether it is an Apple Inc. iPad or a Samsung Electronics Co. Galaxy tablet or a personal computer.

“The viewer doesn’t realize it, but something’s got to prepare the content,” said Michelle Abraham, research director for the Scottsdale, Ariz.-based technology consulting firm In-Stat, which is part of NPD Group Inc.

Abraham said video must be prepared for different screen sizes, resolutions, protocols and rights management systems, among other things.

Imagine Communications’ customers are primarily North American cable companies, including Comcast.

“We’re in a very fast-growing and exciting field,” said Stanfield, who was brought on one year ago. By 2015, Stanfield said, 90 percent of Internet traffic will be video.

Screening Out Information

Imagine is working on the puzzle of how to drive down the amount of information flowing to video screens. Some information can be left out without the viewer even noticing.

“Our engineers understand better than others how the human eye perceives video,” said Chris Gordon, Imagine’s vice president of product and marketing. “If we model the human eye effectively, we can remove bits we don’t see or might not be focusing on.”

Gordon used the analogy of ground pepper, like the stuff that comes out of the pepper shaker in the employee lunch room. If you spill pepper on your clothes, it will be more apparent against the background of a white shirt rather than a background of denim jeans.

It’s the engineer’s task to find the pepper against the jeans, and lose some quality there, in an image the viewer won’t notice anyway.

The human eye will pay much more attention to skin tones and faces in a video, Gordon went on to say. One can’t sacrifice quality there. “Viewers will see it,” he said. It’s better to sacrifice quality on something such as a blue sky, Gordon said.

Video of sports brings its own special set of challenges, said Stanfield, though as a rule of thumb, people watch the ball and not the crowd in the grandstands.

“It’s really understanding how the brain and the mind, and the eye, work,” said Gordon.

Carmel Ventures of Israel, Columbia Capital of Alexandria, Va., and Court Square Ventures of Charlottesville, Va., are among Imagine’s investors, who have put more than $34 million into the company.

Imagine may see even more demand for its products if Internet providers place limits on the amount of data people may access.

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