SussexValley Poised to go from Startup to Stardom
Midland Business Journal - Lincoln Nebraska

With its core application having gone through a rigorous research and development process, Lincoln’s SussexValley hits the market this month with two products that stand to make a major impact on Internet commerce.

SussexValley unveiled its new wares at a press conference in San Francisco on Sept. 8, a month shy of its two-year anniversary.  The firm was formed by Ted Simson with the intention of developing an online payment system that allows users to make micropayments – down to one-tenth of a cent – regardless of whether they have a credit card.

Called E-Cash, the digital depository receipts work like cash that can be transferred electronically and used to pay for anything from an online auction purchase to downloadable media.

Simson, who is president and CEO of SussexValley, said his firm recently reached an agreement to partner with one of the largest banks in the world, and he expects E-Cash to be viewed eventually as a seventh universally accepted transaction method – the other six are cash, checks, debit cards, credit cards, automated clearinghouse (ACH) transfers and wire transfers.

“We have attracted a lot of attention from banks, both domestically and internationally,” Simson said.  “They are interested in the idea of being able to use E-Cash as a means for seamless Internet payments or fund transfers.

“From the merchants’ standpoint, it’s a no-brainer.  You can accept payments without having to pay a percentage of the sale to a credit card company.  It’s an attractive option from the consumers’ perspective because there are several options on how they can load their E-Cash accounts, and they can spend the money just like cash, only electronically.”

Based on its E-Cash concept, SussexValley has developed a program called File-Cash.  It is an open platform system in which Internet content providers can upload digital media – including text, video and audio files – into an encrypted environment managed by the File-Cash system.  Using E-Cash, consumers can select files and download them for a price determined by the content provider.

One potential application for File-Cash is online newspapers and magazines.  Currently, publishers who place their content online have essentially two options – they can allow readers to peruse the material free or they can establish a membership package that generally requires the reader to sign up for a monthly subscription to access the online content.

With File-Cash, publishers have a practical way of implementing a pay-by-the-page option that allows the consumer to purchase download rights only for the specific material they wish to view.

“A lot of newspapers have been providing their content online free because they are afraid they will drive customers away if they have a set membership cost,” Simson said.  “File-Cash will allow them to charge a penny per page, if they want”

The first practical application for File-Cash is being launched by SussexValley.  LegalTunes.com will serve both as a demonstration of how the File-Cash system works and as a viable business venture in its own right.

Simson described the program as “the first legitimized and monetized peer-to-peer music sharing network.” 

Doesn’t that already exist, you ask?  Yes, but many in the music business argue that while such sites appeal to honest consumers who see them as an option to going to a retailer and purchasing an entire album on CD, they do little to discourage those who see nothing wrong with “sharing” music with others in the online community without the record companies (or artists) ever receiving compensation for the transaction.  And that is the practice the labels most want to curb.

“The reason peer-to-peer networks exist is that they are a way to get music free,” Simson said.  “What’s the only thing better than getting something free?  Getting something and getting paid for it.”

Simson said while SussexValley didn’t spend two years developing its E-Cash system specifically for the purpose of entering the online music business, the market surfaced as an ideal way to showcase its core technology.  It’s such a good fit, in fact, that SussexValley is working with a number of major Hollywood studios to develop a similar system for downloading movies.

SussexValley will soon move its corporate operation to California, and the staff is expected to increase substantially in the coming months.

The firm will continue to operate existing marketing offices in Los Angeles and Toronto, and Simson plans to remain in Lincoln with the research and development team.

“I cannot say enough about this facility and its staff.  Without them this project probably would have never gotten off the ground.”