Tuesday, February 15, 2011

Sensio: NBA 3D Deal Shows Promise

In a previous post 3D TV - A Contrarian Investment Play I mentioned a small company called Sensio. Sensio is based in Montreal and listed on the TSX Venture Exchange under the symbol SIO. Sensio has patents on a number of leading edge 3D technologies and has the potential to see incredible growth over the next couple of years.

Yesterday Sensio announced a deal with the NBA to feature the first All-Star Game in 3D for international fans. NBA and SENSIO to Feature First NBA All-Star in 3D for International Fans

Some highlights from the news release:
  • More than 100 cinemas internationally (including Belgium, Germany, Italy and Mexico) to provide NBA All-Star Saturday Night and NBA All-Star Game in 3D
  • Coverage will include the use of eight 3D cameras throughout Staples Center, including three special 3D Shadow cameras. The 3D Shadow cameras will be placed directly on top of the main broadcasts cameras, providing an efficient and non-intrusive way to capture all the action in 3D.
What the new release doesn't specifically tell you is:
  • Sensio will also be broadcasting 3 NBA regular season games in March and April
  • Sensio will also be broadcasting 2 NBA playoff games
  • The games will be shown in 30 countries worldwide
See the Sensio promo on there website at http://www.sensio3dlive.tv/en_sensio.html for more details on the above.

In addition, in 2010 Sensio teamed up with Cinedigm to bring the FIFA World Cup to hundreds of theatres worldwide. It was the first global 3D broadcast of a live sporting event and was very well received.

To put a little perspective on things, here is a bit of history of live 3D sporting broadcasts (not including recent 3D television broadcasts):

  • NBA All-Star Saturday Night and the All-Star Game was broadcast in 3D.
  • Took place by-invitation-only at a special viewing party in Las Vegas.
  • First ever live sporting event in 3D.
  • Later that season Game 2 of the NBA finals was broadcast in 3D to 14,000 fans in the Quicken Loans Arena in Cleveland.
  • Dallas Mavericks NBA game broadcast in 3D to 500 fans in Dallas (by invitation-only).
  • First live 3D sporting event in a theatre.
  • NBA All-Star Saturday Night (but not the All-Star Game) was broadcast in 3D in 80 theatres by Cinedigm.
  • First ever publicly marketed live 3D sporting event.
  • No NBA games broadcast in 3D.
  • Cinedigm teams with Sensio to bring FIFA World Cup to hundreds of theatres worldwide.
  • FIFA broadcast was first global 3D broadcast of a live sporting event. 
Note that in 2008 Sensio sold 50 licenses for its Sensio 3D cinema decoding technology to be used by Cinedigm. In 2009 it then sold another 50 licenses to Cinedigm. My understanding is that while Cinedigm was licensing Sensio's technology since 2008, it wasn't until the FIFA broadcast last year where they felt the need to team with Sensio.

Today's news regarding the 2011 NBA All-Star Game is interesting in that Cinedigm is not mentioned at all. As far as I can tell this deal is entirely between Sensio and the NBA. If that is correct, then it looks like Sensio is now making a move to manage the entire 3D experience themselves (as opposed to earlier events that just licensed their technology).

The key to the NBA news is not the one-off revenue Sensio will receive. I believe the NBA All-Star Game will be used as a test for Sensio. If they can successfully pull this off, then I think it will open up the door for more regular live NBA 3D broadcasts. And if the NBA jumps on board, then the NFL, MLB and NHL should not be too far away. The potential demand for an event like the NFL Super Bowl could be huge globally. This all has the potential to add another stable stream of revenue to Sensio's existing patents (which are now just slowly starting to be realized).

Technically, Sensio looks like it is putting in a bottom around 1.10. The stock closed right at its 20 day moving average at 1.19 today. A move above there could signal confirmation that the bottom is in and open up the potential for higher prices in the near-term.

Other possible catalysts for near-term share price appreciation would be further live 3D announcements, or deals with major television manufacturers to incorporate additional Sensio patented technologies. A buyout is also always a possibility given Sensio's leading edge technologies and extremely low market cap.

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