Jay Boberg & Yair Landau
June 2, 2015
Last year, All Access interviewed Vadio CEO Bryce Clemmer, who discussed how an idea he and his partners helped develop - synchronizing video to radio station audio - became a reality. It was already bring used by selected medium to small radio groups, as well a handful of countries overseas. Today, as YouTube continues to encroach on radio's audience, not to mention Spotify launching its own video arm, Vadio is in extensive negotiations with major radio groups. Armed with Vadio, radio can better compete with video-enhanced media rivals on a level playing field. Here to discuss the current situation are Executive Chairman (and former MCA Records Pres. and IRS Records VP) Jay Boberg and newly appointed Chairman/COO Yair Landau.
Jay, how long have you been with Vadio and what interested you to get involved?
BOBERG: I have been with Vadio since they started. I was a mentor at Amplify in Venice, CA, where we would look at different media companies to mentor - and Vadio was one of those companies. I had a lot of respect for and belief in Bryce Clemmer, so I became a mentor for them. I even invested some money in the company, along with Marc Geiger, Bruce Eskowitz and Dean Gilbert. It wasn't huge money, but it was meaningful.
At the beginning, I was talking with them about once a week, advising them on a number of things. Then early last year, they asked me to become Chairman and become more involved. I was thrilled to do it, so I helped raise a bit more money and got involved with the Vevo negotiations, as well as talks with radio companies.
Maybe six months ago, we pitched Yair Landau on getting him aboard and investing more of his time here. He obviously has become part of the team and more involved in the day-to-day stuff. My role is evolving to where I drop back a bit while Yair becomes more ensconced and builds out our team.
Yair, what made you decide to take the job?
LANDAU: A whole bunch of factors. First and foremost, I spent a bunch time with Bryce and the people here, and I liked what they are trying to build as a business. I felt like their team could contribute a lot and I would enjoy working with them. Secondly, I've been in the online video space since its infancy. At Sony, back in 2000, we launched a movie download service, as well as a user-generated content service. I was also on the Board of Connect, Sony's ill-fated music service. I see this opportunity as the next way to shape radio.
Yair, what do you see as your first order of business?
LANDAU: First, I want to help them get their act together from a structural and transactional basis. The company has enjoyed successful implementations around the world. It's now at a point where it needs to be closing deals with major radio companies. We're positioning for those launches; we're ready to partner with bigger, more complex media companies. My role is to help make that happen and make sure they're successful.
What are the biggest issues facing the company?
BOBERG: The current challenges are really in terms of execution. What we've seen is that the technology these kids have developed has withstood customer scrutiny. The strongest part of Vadio is its technical quality and uniqueness. In terms of challenges, that leads us to execution in making deals and getting things in place, so the consumer can adopt it and interact with it. That will determine our fate in the longer term. In the early tests we've seen in Australia, Serbia and Italy, it has been very encouraging
We're also very bullish on the further utilization of this technology; there are a lot of potential uses for this technology in the advertising space. We just secured new funding from Marker; Rick Scanlon was the lead investor in the series; his team has focused on investing in space where video and advertising all come together through analytics, utilization of data and people behavior. He looked at the technology and thought it was fantastic not just with radio, but with big business players. He was talking about signing up small businesses for other uses.
Is radio your main priority right now?
BOBERG: Yes, we already have deals with multiple radio stations; some even have exclusive content on top of the videos. As time goes on, you'll see stations offer more added services. The primary goal, of course, is to provide a video element to radio. When you have credibility with brand curating, you better the chances of long-term immersion with your consumers, with potentially higher immersion than even YouTube. Today, when people hear about a song, they often go to YouTube. You can't expect them to be there, going from song to song, for very long. In my opinion, they'll be there longer if it's coming from a curator they respect. Radio programmers can be the best curators.
Do you consider Vadio to be a game-changer for radio?
BOBERG: I wouldn't go that far, but this is a certainly a way for radio evolving. There's no question that the radio people we're talking to are excited about what a video aspect could mean for radio. Obviously, it's not my place to say game-changer; that's their assessment, but there's no question that this could potentially be a very lucrative aspect for what radio could offer - and it makes radio more competitive with YouTube because it's curated ...and YouTube is not.
Is it important for Vadio to become radio's industry standard in terms of video simulcasting?
LANDAU: I don't think it's important that we become the industry standard. It is important that we give our partners' consumers a high-quality experience. Today's world industry standard will emerge based on consumer usage standards. We want to help our partners with high-quality video experiences. We're in a very competitive space that's broadly defined, where we offer a very specific approach that gives us an advantage for existing media in the audio space. Broadly speaking, many entities deliver music online -- some audio-only, others with a visual component. Consumers make time and place decisions on where and how to consume music. We're trying to help some of the audio-only players better compete in the broader space.
If Vadio does become integrated throughout radio, would that prompt labels to spend more on videos for their artists?
BOBERG: As you know, a greater percentage of videos nowadays are self-distributed or produced through indies. This is not to say the majors aren't distributing videos, but their pure numbers are quite a bit less than they used to produce. Now we have a situation where a majority of the bands are creating videos on their own. They can do that because they can make them at a fraction of the cost of what they used to cost. We all remember the days of $100,000-plus videos - not to mention the superstars who paid over a million for one video. Now you see quality videos made for $6-8,000. Film students are working on them ... it's crazy. That's all a part of the DIY element out there now. There's a whole movement to create quality videos at a very reasonable cost.
More people are consuming both audio and visual through a mobile platform. How has that impacted Vadio's development and growth?
LANDAU: Vadio, like everybody else, is evolving into a mobile-led experience. Our discussions on implementation with our partners are going to be mobile dominated. The continued evolution of the mobile platform is one of the reasons why our audio partners need something like Vadio. The introduction of the iPhone 6 and 6 Plus will have a meaningful step forward in mobile video consumption The 6 Plus is a fantastic video consumption platform; when you have a high-quality big screen, the more likely you'd want to consume video on it. It's a great platform to stream radio and video together. It adds value to radio operators because they can make more money streaming video spots than they could for just audio spots. We're offering them a fundamental business proposition.
Whose responsibility is it to make those spots a minimally invasive as possible?
LANDAU: It's our responsibility to do it in the most organic way we can, but to some people, any spot is invasive. But ad-supported music consumption has been around for a long time and it will continue to be around. We're just trying to make it more broadly accessible, and a whole bunch of interesting stuff is happening in mobile advertising integration and video advertising integration. The consumer has choices - an ad-free pay model or an ad-supported free model -- and we're able to facilitate both choices, although we're more focused on ad supported.
Spotify has announced that it is launching a video arm. Does that make them to be a direct competitor to not just YouTube, but radio as well?
BOBERG: We see Spotify as a potential collaborator. There has been a dialogue between us, but there's nothing to talk about it at this point. We're far less ready to deal with them than we are with radio. It is indeed on our radar and is something that will be looked at it. But it's not just Spotify; hypothetically, we could see ourselves working with SiriusXM as well as any audio source that could use a video aspect.
There have been reports that Apple and many on the content side have been pushing the major labels to force or pressure Spotify to end its freemium model for a reasonable pay model. Do you have a dog in that fight?
LANDAU: We don't have a dog in that fight, and I don't believe that the labels and radio are as concerned about Spotify as they are about YouTube. YouTube is a real alternative for people who use radio as their primary music experience - and it's not going away. I consider YouTube to be radio's biggest competitor - and Vadio can help radio compete with YouTube. If you run an audio platform that also works with video, you've got a better shot competing with it. That's essentially what our value proposition is to our partners. Radio can't sit around and pretend they're not competing with music video online.
So what's your immediate goal right now?
LANDAU: Our goal is to have really strong successful implementation with radio groups in the U.S. within the next 12 months. We believe we can really help and drive our partners' success in delivering more user engagement. I expect us to have more radio partners in the U.S. within the year. We've been delivering the video experience throughout Italy, Serbia and Australia but we haven't fully launched "on Broadway," and that's what I'm focused on - being successful on Broadway.