Technology Integrator catches up with Cheena Srinivasan, founder, and CEO
Kaleidescape has been a company in evolution. In general, please speak in brief historically about how your offerings have changed over the years, and how you have had to evolve to match the consumption tastes of the new generation of content clients - and to match the needs of the custom integrator in dealing with those clients.
Cheena Srinivasan: We’ve been serving the custom electronics market for over a decade. We understand this market well, and we’re able to innovate in ways that appeal to residential systems integrators. We’re in our fourth-generation hardware for movie players, but we innovate every single year to improve the cinematic experience for our customers through software and content. A vast majority of our products (more than 150,000 units) are still operational today in homes, yachts, and airplanes.
We solved the DVD collection problem for customers with dedicated home theaters. We evolved our products to support Blu-ray and we optimized our systems to serve multiple viewing zones effectively. We introduced native on-screen support for 2.35-aspect-ratio screens which are standard in widescreen home cinemas when no one else bothered with it. We support all popular control systems so that they can take advantage of our event cues within our control protocol API to automate lights, screen masks, curtains, shades, video formats, audio formats and even subtitles. We’re the first and still lead the market for 4K Ultra HD with high dynamic range (HDR) support – not just in designing and manufacturing the best movie player in the world, but we also operate the finest highest fidelity movie store for our customers. We’ve licensed content from nearly all the major studios and offer titles from 22 of the top 25 movie distributors in the U.S.
Kaleidescape has always had a vision of purity – to deliver the most emotionally engaging movie experience in the comfort of your home, be it an amazing home cinema, a media room or a well-done family room entertainment center. Our business depends on the custom dealers and custom retailers since they are the ones integrating our fine product with other famous brands from video to audio and control systems. We’ve never compromised on quality, reliability or high performance for the sake of experience or convenience. We represent the best brand for movie source in the world.
What are you doing to solidify your relationships with technology integrators and, by extension, the luxury clients they serve?
Srinivasan: We’ve made a concerted effort to step up communication with our dealers, and we’ve kept in touch with them as well. For example, I’ve visited over 120 dealers in the last eight months. They are energized about our brand, our new products, and especially our content from the movie store.
We offer them resources to our company Extranet that is also one-of-a-kind for the custom channel – they can see information about every system sold to every client in the past, warranty status and upgrade sales opportunities. Most of the transactional elements are dealt with through business automation. We save the tough part about building trust in the brand and sharing information on how to solve the “weakest-link-in-the-chain” problem, which almost always is the source device in a home cinema installation. They are already aware that there is no money to be had in integrating inexpensive devices, but we make a point that these products do well in coexisting with a Kaleidescape system, as we don’t do the many things these many-functions-in-one devices do.
We will not engage in a race-to-the-bottom product offering as we strongly believe that products are priced to value. There will always be a market for the best, and we understand that ours won’t be a product that serves the mass market.
You are now almost a full year into your restructuring plan. Can integrators be assured that you are in the market to stay?
Srinivasan: Kaleidescape is here to stay – our actions speak for themselves. We made some tough decisions last year, but the biggest decision of all was very simple. We have great products, and we offer consumers a unique experience that is simply hard to beat – we don’t have a direct competitor to this day. We have an amazingly loyal customer base because our product quality was never in question, and never will be. We have a dedicated team of people supporting those products, and we have relationships with the major motion picture studios as well as some great independent studios that offer the best content available, and this is a huge, compelling value. For example, we have recently added concert content from Eagle Rock, so that our customers can watch pristine performances from Paul McCartney, Katy Perry, Monty Python, Peter Gabriel, the Rolling Stones, Madonna, The Who, Queen and many others, right in their own living rooms. Kaleidescape also licensed fantastic movies in true 4K HDR from Warner Bros. and NBCUniversal, in addition to Sony Pictures movies.
We recently introduced the following new products:
• Kaleidescape Strato Movie Player – the flagship product – now comes with a new storage option: joining the 6TB option ($4,495) is the 10TB ($5,995) version to provide 67 percent higher storage capacity for the HDR 4K Ultra HD movies available from the Kaleidescape Movie Store.
• The Strato C Movie Player without storage ($3,495) supports all of the same features as Strato like true 4K Ultra HD HDR movies at up to 60 frames per second, support for lossless multi channel and object-based audio, including Dolby Atmos, Dolby TrueHD, DTS:X, and DTS-HD Master Audio. This is a must-have product for installations requiring a large number of viewing zones.
• Kaleidescape Terra Movie Server – a new 40 TB storage option ($12,995) that’s capable of housing up to 720 4K HDR movies. The Terra server is the foundation of a multi-room Kaleidescape Strato system and can support any number of Strato C players, and is capable of serving up to 10 simultaneous 4K Ultra HD playback streams.
• The newly designed Kaleidescape 1U+ Movie Server boosts performance and reliability and will fit seamlessly into existing or new Premiere systems, available with either 18TB or 30TB of storage capacity with Kaleidescape’s proprietary RAID-K data protection that enables the server to continue operating after a hard drive has failed, without losing any data. The 30TB model, which stores up to 800 Blu-ray movies, has a suggested retail price of $16,495; the 18TB model has a suggested retail price of $11,495.
All of these new products are shipping now.
Talk about the growth of progression of the Kaleidescape Movie Store, and how that gels with consumers’ desire to download content. Does the availability of video content enhance with Hi-Res Audio quality resonate with consumers to the degree it deserves to? What can be done in the market to increase awareness of the benefits of Hi-Res Audio content and of the immersive experience that uncompressed content can provide in enhancing the consumer’s enjoyment?
Srinivasan: The Kaleidescape Movie Store is as unique as the Kaleidescape products. It’s the only movie source in the world that offers the world’s best movies in pristine quality for Internet delivery. At first, dealers and some customers wanted Kaleidescape to support streaming. We explained that it won’t be possible for us to deliver pristine-quality movies and stunning multi channel audio in a watered-down, low-bitrate format.
High-fidelity audio is huge! Most of the custom channel grew from the two-channel audio world. The best home theater dealers all have roots in audio. These folks remind me that audio is way more important than video – and that it is where Kaleidescape has a compelling advantage. Most streaming sources use stereo audio or lossy Dolby 5.1. Kaleidescape serves its movies in lossless multichannel format. The difference? Streaming sources deliver between 1/2 to 2 Mbps for audio; Kaleidescape delivers between 10 and 24 1/2 Mbps in audio bitrate. That’s a lot of audio information that is simply lost if you are streaming a movie – that is why Kaleidescape supports the full lossless version of Dolby Atmos and DTS:X.
Given that Amazon Prime and Netflix offer select movies and TV shows for download – consumers are balking less about taking the time to download to enjoy a stutter-free movie experience on their mobile devices. We believe that people will understand that fine dining experience is unhurried, but offers a memorable experience. The Kaleidescape experience is analogous to a fine dining experience – it’s simply different than fast food.
As far as what can be done to increase awareness of cinematic experience from immersive video and audio, we strongly believe that it’s important to demonstrate the whole cinema experience in a showroom. Such experiences cannot be captured in a brochure. Again, going back to the dealers who believe in demonstration – the audio folks are experts at the demonstration.
Do you think the growing commitment by the record labels to making Hi-Res Audio streaming content more widely available will have an appreciable effect on the growth of consumer desire for Kaleidescape’s products and services? If so, how are you leveraging industry efforts for your own business?
Srinivasan: A rising tide lifts all boats – we’re more than happy about efforts to make Hi-Res Audio content more widely available. A whole generation of music-lovers has become accustomed to compressed music. Hi-Res will make a real difference to some of those people. Those consumers that enjoy it will certainly develop an appetite for high-end video as well, and they will want to experience Kaleidescape, and once they do, they will be Kaleidescape customers for life.
One area where we are focusing on high-fidelity audio is concerts. Concerts are both great visual entertainment as well as a unique audio experience. It’s very personal. It evokes the past memories and brings out the best sensory feelings. We need to stay focused in our mission with movies and concerts for now, but we love Hi-Res audio and look forward to working with the music labels before too long.
What does the future hold for Kaleidescape, in terms of product or services development directions?
Srinivasan: Our vision is to deliver the most engaging, entertaining, emotionally rich cinematic experience in the comfort of our customers’ homes. We endeavor to have the best collection of movies in 4K and HDR from all the important content owners. We are working with some of the major motion picture studios to offer premium VOD (PVOD) as well as to offer movies when they debut in the movie theaters – the industry jargon is day-and-date – for the first portion of the film’s journey in the theatrical window. Kaleidescape serves the residential system integration market, and they cater to a demographic segment of the population that the studios care deeply about. First of all, these customers are not watching movies in the lower-quality cinema theaters, so there is no channel conflict with the theater owners. Secondarily, this demographic segment is willing to pay a premium for quality, convenience, and experience. Lastly, trying new things here will not be a life-or-death experiment for some of the content owners. This is a fascinating market segment and we feel very privileged to have gotten to know customers in this space for well over a decade.
Will you be at CEDIA this year – and if so, will you be introducing anything there?
Srinivasan: We will be at CEDIA, and we’ll have three exciting announcements; we will fill you in next month.