That Championship Start-up

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Computer: PowerBook, at work and at home

Sign on office wall: "The only thing more overrated than natural childbirth is the joy of owning your own business."

THE FINANCIALS
1994 1995 1996 1999

Primary revenues

Leasing/schools $64,000 $155,000 $1,400,000 $11,575,000

Heritage/schools 17,000 20,000 319,000 2,775,000

Leasing/pros 1,000 0 1,198,000 14,480,000

"Info highway" 0 0 0 5,500,000

Total Rveenues* 82,000 175,000 2,917,000 34,330,000

Profit (loss) (1,099,000) (1,000,000) 321,000 9,600,000

*Balance from installation fees and commercial sponsorship

DIGITAL VERSUS ANALOG

A New Way to Look at Sports

Analog
Analog sports videos are awkward for coaches, requiring them to fast-forward and reverse through many tapes to produce a tape containing only the plays they want.

Digital
HTA's digitized recording makes it easier for coaches to see just the plays they want and makes it easier to distribute sports images to fans anywhere along the I-way.

WHAT THE EXPERTS SAY

Brian Ratzliff
Product manager and manager of market research in the sports division of Starwave, a multimedia company in Seattle
Is there a market for HTA's equipment? Absolutely. Coaching staffs face a nightmare when they're trying to assemble game film, and an affordable system with the proprietary technology HTA has developed will win them over. But whether there's a market for schools' on-line sales is another matter. Yes, the displaced fan is a key market, but the schools with the largest alumni bases and best athletic programs tend to get great coverage from ESPN, CBS, NBC, ABC, and other networks. What's more, those networks have broadcast rights, and many of them are beginning to put that content on-line.

For athletic departments, a major network brings in a lot more revenues than HTA might for on-line distribution; a quick look at the CBS billion-dollar buy for March Madness tells you whom the athletic departments will listen to first. An athletic department might give HTA the on-line digital rights for gymnastics, but the displaced-fan market will not be large enough to be viable. My advice for the company is to stay within its niche, which is the equipment.

Joe Alleva
Associate director of athletics, Duke University
HTA spent time at Duke in the summer of 1994, and we came close to buying a system from it. Its technology was good, and Glenn is one of the nicest guys you'll meet. The problem for us was that its product really wasn't ready for the market back then. We bought from another company and got a system that is used by a lot of NFL teams. It's not quite as sophisticated as HTA's, but it does a lot of the same things.

Bruce Ryon
Director and principal analyst of multimedia services for Dataquest, a research firm in San Jose, Calif.
One of the problems of this group is that they're trying to reach the moon before they know whether the spaceship works. In situations in which you need very quick turnaround on tight deadlines, which is the case with these college-sports customers, the product has to be really, really stable. HTA's competitors took more conservative approaches early on. They didn't try to push the technology too far.

HTA may need to find a product that's very simple, something it can offer that no one else offers, at a price point that would be affordable for more sports departments. It needs to go back and research its customer base; Stanford is just not a typical college-sports customer.

Vince Sweeney
Associate athletic director at the University of Wisconsin
HTA is putting too many eggs in the collegiate basket. These are high-cost purchases, and it will be difficult for many schools to invest in these items. HTA should identify and target the small group of schools that can afford these things.

I agree that selling video on-line is an untapped market. On the other hand, all the Big 10 conference schools, for instance, turned over their television rights to the conference so it can shop for a television contract as a combined unit. In essence, the University of Wisconsin and other college video rights are pretty much diminished. I see pro teams as a more fertile market, and HTA should go after them and then parlay that experience in the collegiate market.

Ray Sanders
President of Sports-Tech International, a nine-year-old provider of video-editing tools for college and professional teams, which has annual revenues of $500,000 and was acquired by Dainichi Corp., of Japan, in early 1995
Our products now are mostly analog, but we're developing a product that will allow coaches to access video clips through a digital system and local area networks. We started developing it in early 1995 and expect to have the product out in 1996.

I think this market will grow much more slowly than HTA is projecting. Many potential customers will wait to see who chooses which system and then make their decision. I don't foresee 200 or 300 customers spending $100,000 anytime soon -- maybe over two or three years, but not in 1996.

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