SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
#

-------------------------------

    Destiny Media Technologies
     1040-1055 W. Hastings St.
  Vancouver, BC CANADA V6E 2E9
              (t) 604.609.7736
              (f) 604.609.0611
                  www.dsny.com
-------------------------------

February 23, 2005

Kathleen Collins
Accounting Branch Chief
Division of Corporate Finance
United States Security and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. USA
20549

Dear Ms Collins:

Re:    Destiny Media Technologies Inc.
       Form 10-KSB for the year ended August 31, 2004
       File No. 000-28259

We  are  writing  in response to your letter dated February 15, 2005 requesting
additional information  pursuant  to our annual Form 10-KSB for the year ending
August 31, 2004.

We provide our comments below each question.

1. "As stated on page 4, "The Company announced a license agreement with the
    Universal Music Group in June  2004,  which  included  a requirement for
    further  customization." Are customizations of software frequent?   Tell
    us how you  considered  paragraph  74  of  SOP  97-2  and  SOP  81-1  in
    accounting  for  arrangements  that  require  further customizations and
    consider  expanding  your  footnote  disclosures in  future  filings  as
    appropriate to include your accounting policy for such arrangements."

    Customization of our Pirate Radio and Clipstream (TM) suites of products
    are rare, but when they do occur, a development  specification, timeline
    and cost is established.  Development fees are billed  separately and in
    addition to the license fee as established in our price  list.   Revenue
    associated  with the customization is recognized upon acceptance of  the
    development work.

    When we licensed the MPE(TM) software system to Universal Music Group in
    May, 2004, it  did  not  have  all of the functionality that they or any
    other music label would require.   The  new features that they suggested
    were necessary required extensive development  (over  2000  hours),  but
    were  required  to  get  industry  adoption of the technology.  Features
    included a new user interface, extensive  list management and reporting,
    enhanced security and integrated CD burning capabilities.

    These modifications were not typical and further modification should not
    be required as other labels adopt the system.   UMG  agreed to fund this
    development  work  by  providing  an advance against future  transaction
    fees.

    Development of the MPE(TM) system was  completed  and the system started
    generating  transaction revenue subsequent to year end  when  UMG  began
    using the system  commercially.  The advance to fund development was not
    recognized as revenue  for  the  year  ended August 31, 2004 but will be
    recognized as it is recouped against usage.

    Destiny  will  consider  expanding  the  disclosure   of   our   revenue
    recognition  policy in this regard as appropriate and as the details  of
    our agreements are known and established.

2. "As stated on page  6,  "The  content  owner purchases a code key from us
    which  enables  the  content  to  play."  Tell  us  how  you  considered
    paragraph 24 and 25 of SOP 97-2 in  the  use authorization codes related
    to   software   distribution  and  consider  expanding   your   footnote
    disclosures in future filings as appropriate."

    In considering paragraphs  24  and  25  of SOP 97-2, it is our policy to
    recognize  revenue associated with a particular  software  program  only
    after the relevant  code  key is provided.   The Clipstream(TM) code key
    is  a mechanism that locks the  software  to  a  customer's  website  to
    protect against unauthorized use of the technology. Without a valid code
    key for  that  particular  website,  the software will not function.  In
    some circumstances, a demonstration code  key that automatically expires
    after  a  short  evaluation  period  is  provided,  but  no  revenue  is
    recognized.

    In  most  cases,  a  code key is not provided  until  payment  has  been
    received.  Occasionally,   payment   terms  are  provided  following  an
    appropriate approval process.  Where Destiny  experiences  undo delay in
    the   receipt  of  payment  for  code  keys  provided,  Destiny  pursues
    collection of the outstanding invoice.

3. "We note  from  your disclosures on page 11 that you charge your reseller
    partners an annual  fee  that  buys  them  varying levels of support and
    service from the Company.  Tell us what types  of  support  and services
    are  included  in  such  contracts and tell us how you account for  such
    fees.   Are any considerations  given  to  the  resellers?   Tell us and
    consider   expanding  your  note  disclosures  in  future   filings   as
    appropriate  to include your revenue recognition policy for partner fees
    collected and  your accounting policy for any considerations provided to
    resellers.  Refer to EITF 01-9 and SAB 104."

    The annual fee we  charge Clipstream (TM) resellers gives them a license
    to the software for  promotional  purposes  on  their  own  site  and  a
    purchase  discount  level.   At  the  higher  discount level, we provide
    presales support to their customers during the year similar to the level
    of  presales  support  we  provide  to  our own customers.   Partnership
    revenue was approximately $20,000 USD for  the  year  ended  August  31,
    2004.    The  fees  associated  with  the annual partnership revenue are
    recognized as agreed and when the code  key  is issued for demonstration
    purposes on their site.  As such, our revenue  for  a  fiscal  year will
    represent one year's partnership revenue.

    No  additional  consideration  is  provided  to  the resellers.  We will
    consider expanding the disclosures associated with  partnership  revenue
    as appropriate.

4. "Tell   us   and  disclose  how  you  determine  VSOE  for  multi-element
    arrangements.   Specifically,  describe  the process you use to evaluate
    the various factors that effect your VSOE  and address the issue that if
    your  VSOE various from customer to customer,  how  you  can  reasonably
    estimate  fair  value.  Tell us which transactions are considered multi-
    element arrangements.  Explain what you mean by your disclosures on page
    28 that "to date, evidence  of  fair value for each element has not been
    available on sales arrangements".  Has  the company established VSOE for
    its  multi-element  arrangements?  If not, explain  why  you  include  a
    discussion of these arrangements in your revenue recognition policy."

    The VSOE for our Clipstream(TM) suite  of products is determined from an
    established  price  list.   All  of  our  end  user  sales  follow  this
    established  price  list  and  the majority of  our  sales  end  on  the
    provision of a code key that unlocks  the  software  to  the  customer's
    website.  No additional post sale maintenance or support is implied, nor
    is  it  provided.   The  majority  of  our sales do not involve a multi-
    element.  The VSOE does not vary from customer to customer.

    We consider agreements associated with the sale of Clipstream(TM) to our
    resellers  and  to  our  clients  who  require  maintenance  agreements,
    encoding services, development work or hosting  services  as  our multi-
    element sales arrangements.

    As  our  price  for  these  licenses  is  consistent with our price list
    provided in our single element sales, we believe  we  have established a
    VSOE for sales with multi-elements. Destiny will consider  modifying the
    wording regarding VSOE on future discussions of our revenue  recognition
    policy.

5. "We note from your disclosures on page 10 that you offer software  on  an
    annual  or unlimited basis.  Tell us more about your annual licenses and
    your "unlimited" licenses and the respective maintenance agreements that
    you offer  them.   Compare and contrast the differences in these license
    arrangements.  Explain  when  you  recognize  revenue  for  each type of
    arrangement.   For  your  term  licenses  and  your  perpetual licenses,
    clarify whether maintenance is included in the initial  license fee, and
    if  so,  clarify  the  period covered in the initial arrangement.  Also,
    clarify when maintenance  must  be renewed, the terms of the renewal and
    the respective renewal rates for each type of arrangement."

    Only the Clipstream(TM) suite of  software  products  is  available on a
    timed  basis.   This  allows some customers to better manage their  cash
    flow.  In this case, the  code  key stops working and the software locks
    at the end of the period that the customer has paid for.

    No post sales support is implied  nor  is  it  provided  in  either  the
    unlimited or annual case.

    Revenue  associated  with  the sales of licenses for our Clipstream (TM)
    suite of products is recognized  consistent with our discussion above in
    response to question number 2 (i.e.  upon  delivery of the relevant code
    key).

    Revenue  associated with maintenance agreements  is  recognized  ratably
    over the term  of  the  agreement.   Revenue associated with partnership
    fees is recognized consistent with the  discussion  above in response to
    question 3 (i.e. upon issuance of a code key for demonstration  purposes
    on the reseller's site).

    Occasionally,  encoding  services  are  provided  to  clients.  Encoding
    services  are  priced  per video as per our price list.  These  services
    represent approximately  2%  of  our revenue and the relevant revenue is
    recognized at the time the encoding service is provided.  Generally, the
    time frame associated with this service is very short (i.e. a few hours)
    and would coincide with the provision  of  the  license  for  which  the
    encoding was required.  No further service is implied or provided.

    Revenue  associated  with hosting services is recognized at the time the
    hosting service is provided and is typically over a very short period of
    time such as for a live  video event.  Hosting services are priced based
    the bandwidth required to  provide  the  hosting  service  and  follow a
    guideline  independent  of  the  price  charged  for  the Clipstream(TM)
    license. Hosting services would account for less than 5%  of  our  total
    revenue.

    There  is  no ongoing maintenance or other consideration provided to the
    customer.  When  ongoing  maintenance  is  required,  we  enter  into  a
    separate  maintenance  agreement  with  pricing determined independently
    from the provision of the Clipstream(TM) license.

    Maintenance  is  typically  renewed  at  the  expiry   of  the  relevant
    maintenance agreement.  The price associated with the new  agreement  is
    typically  the  price  of the former agreement adjusted for the needs of
    the client and inflation.

* * * * *

Destiny Media Technologies * 1040-1055 West Hastings St. * Vancouver, B.C. *
                                   V6E 2E9
           (t) 604.609.7736 *  (f) 604.609.0611 * www.dsny.com

#

The company is aware of its responsibilities to accurately report its financial
position.  Management acknowledges  that  the  company  is  responsible for the
adequacy and accuracy of the disclosure in its filings with the  United  States
Security  and Exchange Commission.  Management acknowledges that staff comments
reflected these filings do not absolve the company from this responsibility.

Yours truly,

Steve Vestergaard,
Chief Executive Officer
Destiny Media Technologies

Destiny Media Technologies * 1040-1055 West Hastings St. * Vancouver, B.C. *
                                   V6E 2E9
            (t) 604.609.7736 *  (f) 604.609.0611 * www.dsny.com

</TEXT>
</DOCUMENT>