Last week, we talked with Fouad ElNaggar of Redpoint Ventures about some of the interesting companies in Southern California. One of those he mentioned was Hark (www.hark.com), an online site which allows users to find and share sound bites and audio clips from movies and elsewhere. Hark is backed by Redpoint, and happens to be co-founded by Fouad. The firm is based in Los Angeles and Seattle. We spoke with David Aronchick, the CEO and co-founder of the firm to hear more about what it's up to.
What's the story behind Hark?
David Aronchick: We started about three years ago. Fouad and I had this idea to allow people to interact with sound bites and audio clips. The story was, he and I were sitting around making robot sounds from the movie war games. If you remember the supercomputer in the game, it said things like "Shall we play a game" and so on. Fouad and I were trying to make the same sound for a phone. We looked online to see if there was a clip, and we found that there wasn't a great place to find audio online. We thought we'd create a platform that was as powerful and rich as Youtube is for video, or Flickr is for pictures, or Docstoc is for documents. So, we spun up the site, and got it up and going in the middle of 2008, and it just took off, particularly right after the elections. We saw people were exchanging sound bites, sending them around to friends, and using the platform as we had envisioned, which was not just for long form audio, but for actual sound bites. We also people were mashing things up, including such things as taking the "Yes We Can" that started out with Obama and turning it into "Yes We Kahn" after Startrek's Kahn. There was a viral connection and things grew month over month, quarter over quarter, and we're been growing ever since. We've averaged 55 percent, quarter over quarter growth sine we launched.
How is the company funded and backed?
David Aronchick: When we first got started, although we had a number of connection through Fouad, I worked with my network in Los Angeles, and my network in Seattle, and we landed an angel investment split between both those Los Angeles and Seattle investors. Those included people like Conrad Riggs who was at Mark Burnett Productison, and up in Seattle we had Rich Barton, the CEO of Zillow, and formerly of Expedia. So we bootstrapped, and once we started and got our pilot out and got some momentum, Redpoint was generous enough to invest with great terms, splitting between their Silicon Valley and LA offices.
Was Fouad with Redpoint at the time?
David Aronchick: He was being courted very heavily be Redpoint at the time. As we started getting the thing off the ground, he actually had to step away from the deal because of internal conflicts. However, Redpoint still wanted to go in. He joined Redpoint after we founded the company, but before we had gotten the money.
We hear it's a long process to work with studios to get licensing rights. Has that been the case for you?
David Aronchick: The studios aren't dummies. They know that there is value in this stuff. The problem is, is there are very subtle issues that come up depending on how you break it down, the exact usage scenarios, and promotional context. I think many people came it the wrong way, and look at the content in the world created by a studio, which has done the work creating and producing that content, and spending millions and millions on it, and they hope to leverage that and make some incremental revenue. Sure, that's a decent way to approach it, but the result is, studios then want a huge minimum guarantee, which really prices startups out of the market. We've really tried to change the model. We tell the studios--you've done a fair amount of the work, probably 50 and maybe 75 percent in creating the stuff--but there's still work to be done to socially enable this content. The fact of the matter is, when you and your buddy are sitting around quoting StarTrek or Mad Men, you're not quoting a minute or even 10 minutes of content. It's short phrases like "Yes We can", its quotes you want to exchange with others--that's the value.
Rather than taking their hard work and just leveraging it on the web, the pitch is--we'll do this work for you, put reams and reams more metadata around a given movie, sound bite, TV show episode, or video game. We covert that property into sound bites at the rate of one per every minute of content. So, for an average length movie, that's a hundred sound bites. Beyond that, we've added fifteen pieces of metadata that we are creating uniquely in the world, which just didn't exist before. We've spent the time to find start and end times of different quotes, label which actors are actually speaking in the quote, create human readable descriptions, and have the actual quote laid out that identified the different characters. We are adding hundreds of bits of data. The best thing is, because we're doing this in partnership with the studio, we are accomplishing what they want to anyway.
Beyond that, everything is just gravy. We're now doing revenue share on affiliate revenue, doing revenue share on DVD sales, or ads we run against that content. The net of it, is we're really in the big data business, and we're taking what was formerly a totally monolithic piece--a single DVD, or video game, or sports game--and converting that into something that is consumable in the social web.
It looks like the movie clips you provide are free--what's the business model here?
David Aronchick: The net of our jobs is really harnessing the demand. Last month, we had over three quarters of a million keyword phrases bringing people to the site, whre people search for what they are exactly looking for. That might be a quote, or description of what's going on in a scene, or a character. We're going out there, and harnessing that. About one quarter of all of the searches on Google are for entertainment related content, and studios are not playing into that at all. Our job is to help capture some of that demand. Once people are engaged with a sound bite, they're most likely a user who wants to engage further with that media. Maybe, that's directly with that piece of content--buying it as a ring tone, or buying the DVD, or renting it on Netflix, or seeing an ad that was cross promoted with that content. Or, maybe they just use that as a jumping off point to something else relevant to that studio. Maybe they have an upcoming property, maybe a sequel, and it's up to us to help leverage that demand. The business model is pretty straightforward, it's to find engaged users, figure out how to leverage them, and get them one step closer to what they're after based on the tidbit that has excited them. There are hundreds of ways to do that, through merchandise, advertisements, sales of DVDs, content, and so forth.
Finally, what are the most popular clips on site?
David Aronchick: I will say this--it never fails to amaze me how it ranges all over. We have lots of different categories of stuff, and movies are extremely popular, as are TV shows, particularly the more recent ones. Video games are also huge. It never fails to surprise me how much it adds up. The most interesting thing, however, is that we have over 1.5 million sound bites added to the site each month by users, and adding over 60,000 sound bites a month. Sometimes, you'll get a sudden big viral hit, but there's also this incredible long tail, and it really adds up.
Thanks for the time!