Dilithium Networks Update


There are rumors circulating that Dilithium Networks has gone bankrupt or is in receivership. You may recall I first wrote about the company’s video transcoding and delivery solutions in April of last year. A competitor mentioned in passing that the company was gone and I checked the Web site and found it was not operational. Email messages did not bounce and the phones still work and my eventual digging led me to Marwan Jabri the founder and CTO who is now acting CEO.

Jabri explained that the company is not in bankruptcy or receivership but is closing overseas offices, restructuring and will be divesting some assets.

He blamed the global economic slowdown but in my article from about 15 months ago the company said they were cash flow positive and growing at 400%.

It is obviously very difficult to reconcile the above numbers with the rest of this post.

It is worth noting a reliable source has told me the investors are getting tired of funding a company which seems to have no exit after a decade.

I asked Jabri how if mobile video is booming are they having problems? After all, I used the company’s product for a while as was impressed at how it was able to transcode and deliver video from TV stations live to my mobile device over spotty 3G.

He explained there are huge trials the company is in the middle of in both India and China but the challenge is monetization – carriers are stilly trying to figure out how to make money from video.

I have mentioned before how carriers sometimes seem to take joy in dragging their feet so as to bankrupt startups – I am not saying this is the case but banking on wireless service providers taking advantage of new paradigms is a tough way for startups to make money.

Jabri explained that a delay in payments from carriers has forced the company to, “Do what it can do to protect shareholders and technology and products it has.”

He concluded by saying carriers are investing heavily in video and we are at the early stages of the market.

The challenge for the company is if they can’t get their Web site up, how will they sell anything, ever? As a fan of mobile video and someone who was impressed with the technology as a user, I wish them the best.

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