Late rush blocks Virtual Spectator's Cup view

By PETER GRIFFIN

For online 3D graphics provider Virtual Spectator, the America's Cup ended the same way it began - in virtual disaster.

Because of technical glitches, Virtual Spectator subscribers saw nothing of the action on Sunday as Swiss challenger Alinghi sailed to its fifth successive win over Team New Zealand .

The last-day blackout mirrored the service's abortive start to Louis Vuitton Cup racing in October.

"It's very hard, it's not an exact science," stammered Virtual Spectator's chief executive, Greg Young.

"We were blindsided by volume. It's not the way we wanted to go out,"

In 15 minutes, 117,000 people logged in to view the final race of the America's Cup, overloading the servers distributing Virtual Spectator to subscribers throughout the United States.

Young blames the surge on a lack of live TV cover of the cup race in the United States.

People turned to the internet, ringing up a bonanza of sales for Virtual Spectator, but ultimately crashing the system for everyone.

The fourth race, in which Team New Zealand dramatically snapped its mast, was also plagued with glitches.

Virtual Spectator teamed up with server provider Akamai to ensure the real-time service could be downloaded quickly across the US - a provision that proved fruitless during the most important races.

"You've still got to have the pipe into Akamai," said Young.

"We had a very big pipe, but it obviously wasn't big enough."

Those who paid for Virtual Spectator have been unforgiving in their criticism of the service - and Virtual Spectator's refusal to give refunds.

"I want to be reimbursed," said one.

"It's one thing to lose the America's Cup, but even worse is being ripped off."

Observed another: "Everything points to Virtual Spectator being interested mostly in taking the money and running."

Those who took advantage of a cut-price deal to catch the last races online seemed the most aggrieved.

"I paid US$9.95 ($17.85) for the last two races, wasted six hours and got zip. I want my money back," one vented.

A New Zealand user claimed to be organising a class action lawsuit against Virtual Spectator - but was looking for contributions of US$50 ($89.70) to mount the case.

Young said that despite the blackout, around 178 races had been delivered and a large proportion of Virtual Spectator's subscribers had been tolerant of the faults.

"We have extremely strong loyalty from existing and new VS customers, and they'll be there for what we do in the future," he said.

Young said the company was pursuing a number of new business ventures, including graphics work for Formula 1 and World Championship Rally motor racing.

It is still planned to raise $1 million by joining the unlisted securities market.

Negotiations are also continuing with Pineapplehead, an Australian TV graphics provider Virtual Spectator is keen to acquire.

But Virtual Spectator's America's Cup future is far from certain.

A partnership of Alinghi and Oracle, the challenger of record, will organise the next America's Cup, and may change the way the internet graphics provider is selected.

Either way said Young, rivals were likely to be offering services similar to those of Virtual Spectator for the next cup.

It is not known for how long subscribers will be able to view archived races from the past five months.

That had to be sorted out with the owners of the data, the Challenger of Record Management and America's Cup 2003.

Young suggested race re-runs would be available for at least two months.

For Virtual Spectator subscriber Dave Dustin, paying for the company's services in future will depend on it offering some form of service level agreement.

"If they are unable to meet the level for any reason, proper and timely information explaining the situation, rather than trying to blame the users, would be required."

Virtually there

April 1999: Virtual Spectator is formed by Lindsay Fergusson, Craig Meek and Ian Taylor to combine animations and live positional data for TV and internet coverage of the America's Cup.

Late 1999: New investors arrive including listed company IT Capital and US venture capital firm Snider Capital which along with Fergusson pump in $6.5 million and continued to supply additional cash until early 2002.

2001: Revenue shrinks to $800,000 with a loss of $4.7 million. The company expands into other sports coverage including the Volvo Ocean race, the US PGA and British Open golf, and the World Rally Championship. Deep in the red, the company is optimistic it will be in profit in the third quarter of 2002 - by when $15 million of investors' funds will be used.

December 2001: Ian Taylor's Dunedin-based company Animation Research, which has a 19 per cent stake in Virtual Spectator, takes over some TV-related debt and pays cash for a worldwide exclusive licence to use Virtual Spectator technology on TV, except for motor sport and soccer. Several staff relocate to Dunedin. Animation Research takes over TV graphics coverage for the America's Cup, golf and cricket.

May 2002: Endeavour Capital headed by Neville Jordan buys the business of Virtual Spectator, but leaves debt of more than $1.2 million to be mopped up by liquidators. The buy price is believed to be about $500,000.

July 2002: Virtual Spectator cancels its internet coverage of the remaining seven rounds of the World Rally Championship to focus on providing graphics for TV coverage.

February 2003: Virtual Spectator says it will go to the market to raise $1 million and negotiates to buy Australian TV graphics provider Pineapplehead.