Monday, February 5, 2007
Interview with Nicholas Seet, Founder, Auditude
Nicholas Seet is the founder of Auditude (www.auditude.com), a Los Angeles startup that develops media tracking technology. Auditude's products are used both for ad tracking on television and radio stations, as well as for checking for copyrighted content on web sites. The firm has an interesting story behind it, having started from an MBA business plan competition. socalTECH's Ben Kuo spoke with Nicholas to get the full story.
What is Auditude?
Nicholas Seet: Auditude leverages a new and novel technology we developed, that enables us to track media content--including ads, programs, music, and all forms of media, online and offline. That means we can track ads on TV and radio, and that means we can track copyrighted content on web sites such as YouTube. We present content owners with a central and comprehensive source of information on how their media is being distributed and used worldwide.
Can you tell us a little bit about the kinds of customers who use the service?
Nicholas Seet: Absolutely. There are two big products that Auditude has. Spot ID, which is used by advertisers and agencies--that's the first one. That tracks ads on TV and radio, because no one else is checking. That's quite an interesting business. When you think about when you are watching television, and you see that an ad is cut off, or a Ford ad followed by a Toyota ad--how do you know all those things are going on? Advertisers and ad agencies are losing money because their ads are not being executed correctly.
We've also just launched this year, Copy ID, which enables us to check on new user video websites like YouTube to see if they are using your copyrighted content. In that case, the customer would be content owners. Think of those as large TV networks, movies studios, or movie labels. That's our Copy ID service. All of this is based at our colocation facility in downtown LA, where we are processing tremendous volumes of data--we have over 1 TB of data of information flowing through our system each day.
Let's talk about the background on the first--we understand your company actually came of a business plan competition?
Nicholas Seet: Yes, we actually got very lucky . I actually graduated from Harvey Mudd College in Claremont, with a double major in engineering and economics, I subsequently started Auditude, which at the time was dabbling in consumer type applications. We grew a little bit, and we even closed a deal with Clear Channel to track music on the radio. And then, since I was an engineer, I decided I wanted to round out some edges so I went to UCLA's Anderson School of Management and started my MBA in the fully-employed MBA program, which is their part time program. One was the business plan development course with Professor Bob Foster, which turned out to be a really good thing. We got a great team together, and wrote the Auditude business plan.
Even though I had started in 2000, I had never written a business plan, and all of this was new to me. What we came upon was that ad tracking was way bigger than music tracking, and wrote a business plan for an objective, which was the UCLA business plan competition--the KNAPP competition, which had a nice $10,000 cash prize, which was part of the incentive. Mostly, it was because as an MBA all you hear about is the KNAPP competition, which has lots of prestige.
At any rate, around halfway through the business plan development course, we were writing the first draft of the business plan, and we thought we'd go to another business plan competition to practice, get some feedback, revise the plan, and actually make sure we could win the KNAPP competition. The competition we entered was Rice University's business plan competition in 2005. That turned out to be the largest competition in the U.S., with 300 teams competition, and 100 judges, and that sort of thing. The prize was a $100,000 investment prize--plus $20,000 in cash, and $30,000 in services, worth $150,000 all in--and we won that one! That was a delightful surprise, since none of us expected to win. We'd only written up the draft the previous week.
There was excitement over technology and capabilities of Auditude, which is a missing piece of the media landscape in some many situations. Advertising is one, YouTube is another. You don't know what is going on aside from watching the media, and you see literally teams of people who do nothing but watch TV and listen to the radio, or download those YouTube clips, looking for content you're searching for. Auditude automates that with advanced fingerprinting technology. Our big differentiation is the technology is 10 to 100 times better than the competition, or anything on the market. That's got people very, very excited.
You've developed all of your own technology?
Nicholas Seet: Yes, we recruited some Ph.D.s who developed our core technology. We have lots of patents around the technology. In concept, it's quite simple. We call it digital fingerprinting technology. Just like a human fingerprint, we look for characteristics within a signal that uniquely identifies that piece of content. It doesn't alter the signal, you don't need to watermark or change the signal. The trick is picking frequency characteristics that are immune to distortion, compression, or transcoding. If you think of the case of a movie scenario, where you might have some guy with a camcorder who is recording the movie, we are still going to be able to match that against the high quality DVD master. If you look at it from a frequency perspective, the camcore compared to a high quality original looks very, very different. That's part of the robustness of Auditude's technology. We find those matches instantly. That's in fact what we've been doing. If you look at some of the stuff we've found--we can find bootlegs, where people go to concerts and hold up a cell phone and record the whole thing as a video and upload it to YouTube--we can find those things. The next thing is camcorders in movie theaters--we can find those. Plus, the easy stuff--people who RIP things off a CD, or make their own video of licensed content.
With YouTube at 100 million video views a day, it's essentially becoming the next TV. It's a new medium for distribution of content, but the problem is since the content owners don't control YouTube, they have no way to enforce their licensing restrictions. It's the Wild West all over again, literally. We have technology that either allows them to enforce--find the content, who is using it, and take it down--or to monetize that content. Monetization is the big missing piece for all these sites, there has got to be a model where people who created the music, or video, or a Seinfeld episode get compensated at the same time, where users say they want to use the content. It's very convenient to view online. The first step to even beginning to think about monetization is figure out--where is it, what's being done to it. Without that key component, you can't even do more advanced things like take it down. That's what Auditude is all about. Finding your media and helping you take action on that information.
Who are you funded by, and how much have you raised?
Nicholas Seet: Because of the competition, we actually got lots of interest from the sophisticated investors who had put up the $100,000 for the business plan competition. They told us--well, $100,000 is good, but we'd really like to investment more. That $100,000 became $1.1M.
So you really got $1.1M out of the contest?
Nicholas Seet: An esteemed colleague of mine says it paid for my MBA. The investors include the founder of Compaq, and the founder of Vanguard Ventures. They are very impressive people to have as investors and on the board of directors.
Where's your business now, and what's next for your firm?
Nicholas Seet: The ad business is humming along, and we are currently covering all of national television and national cable. We are signing up advertisers and agencies. The big shift in interest has really been in the last three or four months, because after the acquisition of YouTube by Google the content owners are really looking actively at a solution to control their content and/or monetize that content. Auditude wants to be in the middle of all of that, and we are now talking with content owners and making sure that service is able to meet their needs. Copy ID is really what is next for Auditude.
Thanks for the interview, and thanks for sharing the story!