Animoto makes video edits a snap
— -- Tucson resident David Smith helps his real estate agent wife by making snazzy online photo slide shows of her listings, which he posts on blogs and websites.
He uses software from online site Animoto, which takes ordinary photos and automatically turns them into fast-paced, MTV-style music videos.
"With the effects you get, it would take hours and hours to figure out how to do it on your own," he says.
Today, Animoto productions get even snazzier, letting you add video clips to a montage in addition to still images.
CEO Brad Jefferson says the introduction and popularity of the iPhone 3G S — which brought video recording to the phone — helped urge Animoto's developers to support video clips now.
"The iPhone really changed the landscape of video," Jefferson says. "Now you don't even have to connect the camera to the computer to get to the footage. You just send it directly from the phone. That's taken a lot of the challenges away."
To make an Animoto clip, you register at the site, upload your media, choose background music from about 300 Animoto-supplied independent songs, then wait a few minutes for the software to render it into an online production.
The company, which has attracted 850,000 registered users, offers free 30-second clips that can be posted online. About 10% of users pay to make longer videos, for $3 each or $30 a year.
Animoto competes in a crowded field. Free services from Slide and RockYou have lower production values but appeal to the mass audiences who use social networks such as Facebook and MySpace. PhotoShow, owned by software giant Roxio, offers free, limited videos or unlimited subscriptions for $39.99 a year.
PhotoShow founder Chad Richard, who sold his company to Roxio in 2008 for an undisclosed sum, says Animoto's greatest challenge is getting people to pay. "A lot of the potential customers are the teens and college crowd, and they don't tend to have access to credit cards," he says. "And it's a hard model to get people to pay each time they go."
He says Animoto's ace is the videos' different look. "They have a little more wow or sizzle," he says.
Unlike many start-up imaging companies, Animoto has defied the odds by actually making money.
"The 'freemium' model really works for us," says Jefferson. "People check us out, like what they see and come back and pay for more."
Animoto recently began offering corporate subscriptions, tailored mostly to those in the real estate industry, professional photographers and the hospitality industry. Subscriptions cost $99 for three months and offer more licensed music and the ability to remove Animoto branding.
Animoto was formed by four college buddies with different backgrounds. Jefferson and his pals — Jason Hsiao and brothers Stevie and Tom Clifton — raised $500,000 from family and friends, formed the company in August 2006 and launched the next August.
Earlier this year, Animoto nabbed a second round of financing, $4.7 million, from a group of investors including Madrona Venture, Amazon.com and Bruce Livingstone, founder of iStockphoto.
Investor Livingstone says Animoto appealed to him because it solves the problem of editing. Most people don't take the time or have the know-how to effectively edit their photos and video clips.
"My mother can use Animoto" says Livingstone, who sold iStock to Getty Images for $50 million in 2006.
Martha Garrett of Evansville, Ind., who blogs about seniors and computers, uses Animoto to make slide shows of family vacations and other occasions to post on her Facebook page and blog. "I'm an amateur with my photography and don't really know what I'm doing, but I love what I can do with my pictures on Animoto," says Garrett, 51.
Beyond its online registered users, Animoto also has 2 million "fans" on Facebook and 300,000 users of the Animoto App on the iPhone.
Animoto's headquarters is in New York, but Jefferson leads a lean operation of 18 from his home office in Oakland. Heavy-duty network operations are handled by Amazon.com, which beyond its retail face also provides the backbone for many websites with its Amazon Web Services subsidiary.
When Animoto launched its Facebook application, it went from 25,000 to 750,000 users in four days and couldn't have done it without Amazon, says Jefferson. "You can't prepare for scale, but if you get hit, Amazon is the most affordable solution," he says.
As Animoto grows, can it continue to get people to pay to make video after video — or is the occasional purchase a novelty? "Part of our challenge is continuing to innovate and getting better over time," Jefferson says. "I think we do it very well now, but there's a ton we can do to make it even better."