Recent SU graduates launch Web-casting firm

FAYETTEVILLE - Three 2004 Syracuse University (SU) graduates used the knowledge they acquired during their college-internship experience to launch a business.

In December 2004, Paul Arras, Aurelius Chaves, Jr., and Christopher Fyall founded XMI Events, Inc., an online, streaming-video and audio broadcaster.

While students at SU, Arras, Chaves, and Fyall interned at i2sports, owned by Dr. Kamal Jabbour, associate professor of computer engineering at SU's College of Engineering and Computer Science.

Through this experience, the three recognized an untapped market, Chaves says. SU alumni who live outside the greater Syracuse area are often unable to watch their alma mater's athletic events on cable television. And the athletic events of smaller universities and colleges - like Colgate, Cornell, Le Moyne, and Hamilton - are rarely broadcast on television, Chaves explains.

While i2sports dabbled in this market, the business lacked the manpower and capital to remain commercially viable.

"Plus, they just didn't charge enough," Chaves says.

The launch of XMI gives alumni associations of many private, Central New York-based universities the ability to provide members with access to a multitude of athletic events.

When sports-broadcasting conglomerate ESPN launched the allcollege-sports network ESPNU in March, XMI faced a new competitor. But XMI's founders say the launch confirmed that they had tapped into a market that the national media was just beginning to recognize.

Arras, Chaves, and Fyall started the business in late 2004 by purchasing $15,000 worth of production equipment and a bandwidth contract. Similar to a cellular-phone plan, the bandwidth contract with Irvine, Calif.-based, streaming-media provider VitalStream, Inc. supplies the firm with a specific amount of online-broadcasting capacity for a set rate of $600 per month, Chaves says.

XMI's three founders used their own funds to start their company, and haven't tapped any bank financing, Chaves says.

Although Fyall is no longer with the firm, XMI employees include Chaves, director of sales; Arras, director of production; and about a dozen interns. The owners operate XMI from their home at 102 Clark Road in Fayetteville. Fyall left for an established engineering firm because he needed a steady income in order to pay off his student loans, Chaves says.

While most of XMI's business comes from broadcasting athletic events, the firm provides remote audiences with access to a variety of other events, including corporate conferences, equestrian events, figure-skating competitions, and highschool sporting events.

As the firm grows, Chaves plans to focus on the needs of the firm's corporate clientele, he says.

But rather than restricting its services to specific markets, the firm will offer its services wherever there is a need, Arras says.

In July, XMI broadcast a production of the opera "Sundance," held at Cazenovia College Theater. The firm is discussing a contract with the organizers of the 2006 World Men's and Women's Curling Championship in Lowell, Mass., Chaves adds.

XMI generates revenue by charging a viewing fee to access broadcasts, Chaves says. The viewing fee varies according to the amount of dedicated bandwidth, and the costs associated with transferring and producing the event.

For example, XMI charges about $5 per customer to access a local SU event. However, the firm could charge about $25 per day, and $100 per week, for parents who wish to view their child's ice-skating or horseback-riding event in Pennsylvania, Chaves explains. These events are costlier because they require more bandwidth, and XMI sub-contracts recording of the events with Productions East Video, a one-person, Saratoga Springs-based firm.

Productions East uses XMI-owned encoding, equipment to upload footage it records. XMI then takes the feed and ensures customer payment for Web viewing. XMI divides the profit of a horseback-riding event, for example, among itself, Productions East, and the horseshow rink.

Once payment is complete, viewers can watch an event live and access archives for up to six months after the broadcast.

XMI differs from other Web hosts because the firm is able to produce its own broadcasts, rather than just translate a preexisting broadcast into an Internet version, Arras explains. Arras majored in broadcastjournalism in the S.I. Newhouse School of Public Communications at SU.

The firm also makes money from contracts with organizations to broadcast certain events. About 85 percent of XMI's revenue comes from the amount it charges various colleges and organizations to provide live encoding of pre-produced content of an event, Arras says. About half of these contracts are to transfer a separate broadcast to Web content, while the other half is for an XMI-produced broadcast, Arras says.

For example, XMI has a contract with Cornell University to produce and broadcast its men's hockey games, Chaves says.

Because ESPN has exclusive rights to broadcast major, high-profile college events like SU men's football and basketball, XMI covers sporting events with a smaller following, Chaves says.