SpokenLayer ‘Audiofies’ Written Content
Update: you can view SpokenLayer’s pitch at TechCrunch Disrupt here
What can I say about SpokenLayer? I want this service yesterday. My only question is if this is a viable business.
Full disclosure: In 2005 I spent several months thinking through a business remarkably similar to SpokenLayer.
Let’s say you are driving to work, running, in the shower, or in any other situation where you want to read your favorite newspaper but either cannot or prefer not to read. SpokenLayer will read it to you.
The concept itself is seemingly simple but actually pretty powerful. With SpokenLayer, any provider of written content can now instantly become its own radio station. The publisher gets a new channel to its audience and a completely new vehicle for advertising, with virtually no additional investment of money or other resources.
SpokenLayer automatically converts an article’s text to speech. Quality is pretty much what you’d expect for an automated text to speech program but for short-form, perishable content, this may be good enough. Additionally, they will manually narrate specific news articles as they become popular or as requested by their clients. They also give the authors of the articles (and possibly even readers themselves) the option of submitting a narration.
In addition to revenue from manual narrations, the main revenue model is audio advertising, split between SpokenLayer and the publisher.
The problem is what if they succeed? What’s to stop their largest publishers from in-sourcing this service? Creating a multi-publisher platform, with publisher-level and topic-level pronunciation guides, and an app with great UX is certainly not trivial. But hacking together an ok-but-not-great text to speech engine to glue onto a single publisher’s app is at most a few months work. If SpokenLayer takes off and they start generating significant ad revenue, their largest customers will have a very simple make vs. buy calculation. SpokenLayer will have to slash their share of ad revenues to the bare minimum to make it not worth their while to in-source the service and even that may not work.
- Aggregation: The aim is for SpokenLayer to become the one-stop-shop for this kind of audio content and that as it captures more and more content, network effects will kick in. Publishers who want their content to be discovered will have to be in their network. To me, this feels like a sonic twist on the old portal model… which we know is just kicking ass for Yahoo, AOL, et. al. Kidding aside, the content discovery angle may be valuable for the smaller publishers but the larger ones are already one of the few always-go-to news sources for their audience. So if the New York Times decided to pull out of SpokenLayer and embed text to speech in their own app, their readers would follow them… with is exactly what happened when they cancelled their deal with AvantGo and created their own mobile site and app.
- Curation: There is no doubt that there is a lot of mediocre and irrelevant content out there so there would seem to be some value in creating a Pandora-like stream of relevant articles to listen to. The question to ask is this: Aren’t the publishers already curating this content for us? I read the New York Times World section at least in part because they do a decent job of selecting news that interests me. For SpokenLayer to add value, it would have to do a good job of finding articles that the Times missed or different takes on the same topic; serving up similar articles on the same topic would simply waste my time.
- Specialization: Simply put, it’s difficult and expensive to develop new technologies. On the other hand, the large publishers have the resources and have shown that they are willing to deploy them if there’s enough money on the table. Plus, the lag time between new & hard to commonplace & easy is getting shorter every day….
- Owning the ad network: Creating the audio ad market is not just hard, but requires scale. Once you have it, you have enough impressions to offer up very specialized content and command higher CPMs. If SpokenLayer gets to scale first, this will give them a solid cost advantage against competitors. But again, the largest publishers already have this scale and, if they don’t already have a radio division, can (in theory) cross-sell their current advertiser base into audio ads.
Even though I am not entirely sold on Will’s argument, I put quite a bit of time into understanding the opportunity. If Will makes a strong case that even with just the middle and low end of the market, there is enough there to make SpokenLayer into a big company, I would likely put it even more time getting to know his team, talking to his partners, advisors, and other investors, digging into the terms of the deal, et. al. But since the point of this blog is who passed my first cut (and why), the bottom line is that SpokenLayer made it at least that far.
Whether I invest or not, I want SpokenLayer to succeed… even though it would make me feel pretty dumb for passing on the idea in 2005. 🙂
Feel free to agree, disagree, or insult my investing skills, Yo Mamma style.
AngelList profile: http://angel.co/spokenlayer-1