It has started a 12-month proof of concept study for its video-editing tool Forscene with a major UK broadcaster.
Described by its chief executive Aziz Musa as potentially its most significant deal yet, Forbidden is collaborating with an unnamed US editing software specialist on the study.
The UK broadcaster is paying for the proof of concept and will use Forscene to edit broadcast productions using cloud-based technology to speed up its workflows.
If successful, Forbidden expects to increase the amount of work it does both with the broadcaster and its US collaborator.
Just a day earlier, Forbidden said Forscene would be used to produce and distribute highlight packages at two major but unnamed international sports events this summer.
One is a ‘global tennis tournament occurring in London’, and another a ‘major international sporting games for disabled athletes held in Brazil’.
After the placing Musa said: "We are delighted to raise these funds which will be used to drive our sales growth.
“We continue to see traction in our business. In the last two weeks we have announced deals with a major broadcaster, global sporting events and a leading US technology company.
He also hinted at more possible deals and said discussions with a number of large multinational companies were underway, including a global e-commerce company "
Deal pace quickens
Forbidden had already raised eyebrows this year when it got a spot on the Microsoft Azure Marketplace, one of the biggest shop windows there is for cloud-based applications.
For those familiar with the smartphone apps model, it equates to being included in the app store of, say, Apple or Google.
In other words, its a big deal, though of course being in the shop window does not guarantee sales.
Nevertheless, Forbidden said it expects to generate some revenue from the collaboration this year but, given the try-before-you-buy opportunities offered by the cloud model, the real benefits should start to kick in next year.
Earlier in March, Forbidden had stated it expects the benefits of heavy cost cutting to showing through in 2016.
And that,after the retrenchment, it was gearing up for a big sales drive over the next two years.
The money from the placing will fund the building of a sales infrastructure for Forscene and marketing for two other products, Captevate and eva.
“2015 represented a year of stabilisation, reorganisation and regeneration.
“Our intention is to make 2016 the year we begin to see sales traction,” said Musa.
The video editing specialist reduced operating and capitalised costs by a third in 2015, to £4.5mln, lowering the overall loss for the year to £2.63mln (£3.64mln).
Revenues for the year were modest still at £709,000 (689,000), but there was an up-tick in the second half when sales grew by 12%, the majority of which was in the fourth quarter.
Since the year end as well as the Microsoft deal, leading sports management group IMG has renewed a contract for edited sports highlights across twelve channels using the Forscene platform.
Forscene is likely to represent the majority of growth opportunities in 2016 and 2017 and primarily in broadcast post-production and news and sports content.
The sales team has been beefed up to support the sales drive, with a £600,000 reduction in R&D spending to pay for the extra staff.
Longer term, consumer editing platform Captevate, for social media users, is expected to chip in meaningful revenues from 2017 while eva, the group’s new video social media platform, has won its first paid client.
CHIEF EXECUTIVE AZIZ MUSA
In an interview with Proactive Investors, Musa and finance director Jonathan Lees conceded a change in focus was required at the video editing group.
“It’s about a cultural change, shifting from a product first mentality to a revenue based mentality.”
“Money is to be spent on commercialising the business not further product development.”
“We are focusing our efforts in certain areas such as sports, with a significant revenue increase in that sector.”
ABOUT THE COMPANY
Anyone who watched online clips of the best bits of the Rugby World Cup in 2015 will have seen what Forbidden’s Forscene platform does.
This focus on sports and contracts, such as with IMG, is seeing the value of contracts rise, Lees said.
Growth will come from the in–house sales team where the number of sales staff has risen three–fold.
Forscene will be the driver but the other two products potentially may have more value in the longer term.
Musa has high hopes for Captevate and eva, but says both are still in the embryonic stage of revenue regeneration.
Eva is a video social network available on Android and IOS.
Originally set up to build the user base, it allows brands “to create user generated content, own that content and then re-purpose it on Facebook, twitter or their own web site”, says Musa.
The company is using a portfolio of agencies to use as resellers, but Musa says it is a risk element in the business and Forbidden does not know how it will evolve.
Captevate, meanwhile, is an online video editor for the consumer market.
It is just coming out of beta testing and the emphasis here will be to build a stable conversion rate.
THE SHARE PRICE
Forbidden Technologies is currently valued around £14mln at, which indicates some confidence in the market that sales will pick up.
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