Kaleidescape is rises back from the ashes

The rumors were true! A letter sent out to dealers from Kaleidescape's CEO Cheena Srinivasan says the company has restarted operations with a leaner, more efficient company. He blames the company's downfall on pre-announcing their 4K Strato player which suffered a number of production delays over the past year. These delays compounded and eventually pushed back the ship date for many of the promised features giving the impression to dealers and customer that the company was in trouble. 

I can completely understand how easily you can get into this situation. Sales always wants to brag about the next big thing but that's simply not how product development works. Pre-Announcing products is very dangerous for a company and has been the downfall of many both in and outside the CEDIA space. The rule still stands:

"If you cant touch it, it doesn't exist.

Remember that rule walking the CEDIA show floor or reading press releases next week. Its very common for companies to bring fake or non-working product to the show floor to gauge interest, take sales, or simply get feedback. The products they show may never see the light of day. Simply put you should never attempt to sell or purchase something you haven't personally seen in action and used.

Best of luck to Kaleidescape moving forward. The letter sent to dealers is below.

Dear Kaleidescape Stakeholder,

On August 19, Kaleidescape temporarily ceased operations because we ran out of money. As the news spread, we were overwhelmed by the outpouring of support from our shareholders, employees, suppliers, other luxury A/V component manufacturers, the major motion picture studios, distributors, dealers, and (most importantly) our customers. Our customers passionately communicated their desire for us to continue providing the very best platform for movie playback.

Our team at Kaleidescape became energized and inspired to continue this journey. We spent the past 16 years carefully building a valuable technology, excellent products, and a highly respected brand in the worldwide custom channel. Our customers and dealers told us that Kaleidescape is the only luxury movie experience for the home, and they do not want to go back to watching movies from discs and streaming services.

We are delighted to announce that we have restarted operations. We restructured the company, slashed expenses, and obtained the investment needed (with no change of control). We are manufacturing and shipping a significant backlog of products that were ordered during the past two weeks. We are confident that our restructuring combined with this new investment will enable Kaleidescape to quickly return to growth and profitability.

Kaleidescape’s stumble began last October when we launched the Kaleidescape Strato movie player. We made the mistake of pre-announcing software features that were not finished. One of those features – Blu-ray disc support for the Strato player – was a monstrous project that required certain critical software components from third-party suppliers. When third-party schedules slipped, we applied more of our own engineering resources to compensate, but we simply did not have enough engineering resources to remove schedule uncertainty and finish Strato’s Blu-ray disc support in a reasonable period of time. Because almost all of our engineering resources were focused on this Blu-ray project, other features we had promised for Strato were delayed, including HDR, Terra support for large numbers of players, DVD playback, and playback from a Premiere system. Strato is an amazing award-winning product, even without these additional software features. Unfortunately, we created the perception that Strato was an unfinished product, and our sales suffered accordingly.

The “new Kaleidescape” will take on fewer projects, and we will not pre-announce a product or feature until it is completed – especially if completion depends on a third party.

Kaleidescape will continue to sell and support both Premiere and Encore products. We expect to release kOS 7.3 in the near future, without Blu-ray disc support for Strato. It will include HDR playback, Terra support for large numbers of players, and Strato playback of DVD discs from a Disc Server. A number of HDR movies will become available in the movie store at that time.

We have decided to focus our precious development efforts on forward-looking technologies that will enable our movie store to offer even more titles, with even higher quality, in earlier release windows. To enable our engineers to focus on these exciting new technologies, we have re-prioritized Blu-ray disc support for Strato, which we hope to introduce in a 2017 release of kOS.

We wish to thank all those who have shown us their support, and helped us to achieve this positive outcome.

Please email me directly if you have any questions relating to the “new Kaleidescape.”

Sincerely,

Cheena Srinivasan, CEO
Kaleidescape, Inc.