Echolab, the Billerica, MA-based provider of video production switchers and other related live production devices, has lost its funding and has ceased doing business as of this week. Jim Summerville, the company's chairman and main benefactor, has decided to stop funding the organization, which had been losing money for the past few years, and closed the company doors.
Customers, stockholders and the general industry were informed by current President Nigel Sprattling in an e-mail, which stated that a liquidation company would be trying to sell the company's assets, product IP and inventory in order to pay creditors over the next few weeks.
Sprattling and the entire staff of about 23 employees are now looking for new jobs.
“Hopefully they will be successful in their efforts,” he said in an interview, adding that, ironically, the company had been experiencing some growth in the past year. “The IP is certainly worth something, but only to someone who would truly understand it. There are thousands of man hours in the product designs.”
At NAB 2010 in April, Echolab announced an agreement that allowed Harris to market and distribute Echolab's product line, including the new Atem compact HD switcher. However, the move would have cost a substantial amount of money to fund the transaction from Echolab to Harris, and Summerville, who had negotiated the Harris agreement, apparently wasn't willing to continue pouring his own money in.
In an e-mail written a day after he himself was informed of the news, Sprattling said, “I am truly sorry that this action leaves many unemployed, suppliers with unpaid bills and customers with unsupported products. The recent introduction of an expanded Atem switcher family looked set to take us into growth and profit as the market reception was excellent, and our sales funnel had grown by $2 million as a result. We had been sustaining a run rate of about $5 million, and the addition of Atem was set to double that.”
In referring to the new Atem switcher, introduced in 2009 and the culmination of one of the final R&D projects within the company, Sprattling said, “I truly believe that our small team had created the very best of breed in small- and medium-sized production switchers and at a price point that provided exceptional value and margin; facing the loss of these efforts is difficult for everyone involved,” the e-mail continued.
When asked whether existing Echolab switcher customers will be supported going forward, Sprattling said, “Unfortunately, there's no one left to support them.”