Peter Barnes, Founding Partner, SpotTaxi.com, Seattle, Washington
by Jerry Vigil
It was just a matter of time before someone took spot delivery to the Internet in a big way. At this point, it looks like SpotTaxi.com is poised to antiquate other existing methods of spot delivery as more and more radio stations’ production studios plug into the Internet. Seattle-based SpotTaxi.com, a product of Central Media Incorporated, is currently in operation in Seattle with plans for a full-blown launch in time for NAB in April. If all goes according to plan, very soon we’ll get to work each day, log on to the computer in the studio, check e-mails, and download the day’s dubs. Join us for an interesting look at technology’s latest tool, and check out SpotTaxi.com on the Web for more details.
JV: Tell us about your background.
Peter: I am a musician, and I got into the late seventies, early eighties, pre-grunge music production world. I was on the road for about seven years before that with a band. I became a record producer in the late seventies and worked until the late eighties making a lot of records. I was an independent producer and engineer as well, and worked in several different rooms and had relationships with a lot of the studios in the Great Northwest. I was a drummer, a producer, and an engineer, so while I was playing on a record, producing it, and engineering it, I was making great money. But we all know that’s sort of an iffy existence. I had a relationship with a company called The Music Source here on Capital Hill, and I used to go there and do a lot of mixing. They had one of those fancy JH 636 MCI consoles with VCA automation; it was one of the trickiest things around for mixing. So I got a relationship going with that place and was offered a job doing advertising, radio spot work. And although my boss told me I’d really hate these ad people, you can work during the daytime, make good money, and make a steady paycheck. So I gave it a shot, and I actually really liked the advertising people. We did radio commercials, and we were also a music house, too, and did a lot of custom music. We did the music package for the 1988 Olympics, and we did a lot of stuff for NBC—real high profile for the Seattle area.
JV: You’re a serious producer at heart.
Peter: Yeah, yeah. I was able to pull from all that skill set. I mean, I’d show up in the morning and track drums on something, and then my boss would track a bunch of music tracks. Then maybe he’d turn it over to me, and I’d do the voice and the sound effects, and then we’d mix it together, that sort of thing. I did a fair amount of work for Nike and whatnot then got offered a studio management position, and I moved into running that place. Then the owner became sort of an absentee owner—he spent a lot of time traveling—and I was sort of handed this place and ended up being General Manager in 1990.
I got a cold call from Los Angeles probably in ’88 or something like that, whenever “Northern Exposure” started, and I had to essentially invent a very slick and automated ADR room. I was using the AMS AudioFile, and I invented a little system for doing ADR for “Northern Exposure.” I made a deal with them that if I was bad, then I’d give them all their money back for a few sessions, and if I was good, then they needed to give me a good LA rate, and I’d throw a couple of assistants at it and put together a good system for them. And I did and they liked it, and I worked on that show for about seven years. I did a tremendous amount of ADR and went down to Los Angeles several times and spent time networking with that crowd down there.
JV: Where did SpotTaxi get its beginnings?
Peter: I met with a good friend of mine, who was in the business, for a beer one night in 1994, and an hour later we had a new company together. I had realized that I was about as far up the totem pole as I could go and was pretty confident about being able to start my own place, so I did. We started a little boutique studio here in Seattle called “Clatter&Din.” We both quit our respective big houses and went to work together and had a little two-room facility with four employees, including us. It has grown for six years now, and it’s been an incredibly fun company to build and run. We have four studios now and twelve employees. It’s like a dream come true. It’s a great relationship with my partner, Vince Werner; we’ve had an excellent business history together and get along very well. I’m a fifty percent partner in that company.
And in that company I had a young, very smart dub room guy, whose name is James Hutchens. James was running our dub room and was very frustrated with the status quo and realized there had to be a better way. One day we were out having an employee review with him, and he basically convinced us to fire him from “Clatter&Din” and to hire him for a new company, which we started that day. James’ job at that company was to develop a proof of concept on an Internet distribution system. That was probably in August of ’98.
JV: Now, was Clatter&Din producing radio commercials when you kicked it off?
Peter: Yes, Clatter&Din was primarily a commercial production facility—small rooms, Avid Audiovisions. We bought the Yamaha digital console. We had networked audio, digital routing, and a very comprehensive database of all our client details, all our spot information, casting and all that kind of good stuff. We’d always been sort of geeky with our systems, and we’ve always felt that a good, solid, well-thought-out system overlaid with a healthy dose of creativity would create a good working experience for the ad community. And it’s really paid off. That same philosophy applies to SpotTaxi because James went home and built us a web site that essentially completely proved the concept of this. It had automated e-mail responses and a low-res file that would get distributed. It allowed us to begin the process of writing our business plan.
JV: I take it the low resolution files were used to get client approval before going to the next step?
Peter: Right. We had these thumbnail versions as well as high-res quality files for distribution, basically getting rid of FedEx or whatever means you used to distribute the commercials. We had the concept on paper, but what we needed to do was to really develop it in a software environment. Now, what James built was completely un-scalable and had no bearing on our final product other than it was a way for us to look and feel and show it to people and get input and improve it and make changes. It was a template, so to speak. At that same time, I called several of my friends in the Seattle area who were in the advertising business, and particularly people who were in the traffic business who were my clients, and I asked them to help us design a product that would make their lives easier. So I started a series of after-hours drinks and brainstorming sessions, dinners and lunches, and I have a stable of about eight people who have been helping us design this product for a little over a year now.
JV: You must have been doing quite a few commercials to go so far to create a new distribution method.
Peter: Well, we had four rooms, and we were very busy. Yeah, we cranked out a lot of commercials. We’d do all the national Alaska Airlines radio and TV. We’d do drugstore.com. We’d do Washington Mutual Bank. We have a rather large clientele for such a small studio.
Another small history piece here is that “Clatter&Din” decided a couple of years ago to put a lot of money into a very comprehensive web site, and yes, it’s primarily a color brochure. But we also took all the local talent in the Seattle area and put them on the web site. We solicited all the agencies to be represented, and took the top percentage of their voice talent. We took cassettes or whatever medium of audio they had and turned them all into streaming audio files. Then we organized our web site so anybody around the country who wanted to do some casting out of Seattle could log on to our web site and go through any agency and pick and choose their talent on their own time. Then we built a session budgeting Excel spread sheet that allowed the customers to come in and essentially find out what a job would cost to work with us. That wasn’t anything we tried to sell, but we made it really easy for people to work with us. That was the philosophy.
So all of a sudden we’re finding clients in Oregon and Minneapolis and Pennsylvania whom we’ve never met that are having us do all their production because we were very good at FTP-ing final product around the country as well as e-mailing documents back and forth to customers. We were pretty responsive. Like I said, this geeky part always made us take really good notes, and we could always find our spots. We wouldn’t lose things. But the web site enabled us to really reach way beyond our borders here, and we consequently have a rather large out-of-market clientele, some of whom fly in of course, but quite a few whom we’ve never met, and we just think that’s the coolest thing.
And that same sort of philosophy applied to this distribution business because it became quite apparent that the web was just the perfect solution for the business problem of the approvals and the disparate locations and more recording studios working with clients who don’t live in their home town. It’s a communications tool, and that’s a large part of this business. Getting the files from point A to point B is not really what it’s all about. It’s about the communication and the process. So that’s what we’ve built here.
JV: Let’s get a description of SpotTaxi.com and what the features and services are.
Peter: If you go to the site, you’ll find a very detailed description of who and what we are. Basically, when you log into the site, you can be one of three entities. You’re either an entity that sends us spots, or you’re an entity that decides where those spots need to be sent, or you’re a receiver of spots. Typically, that would be a recording studio, advertising agency, or radio station, but we’ve designed this thing to not care whether you’re an advertising agency, recording studio, or radio station because a lot of radio stations have recording studios. A lot of radio stations distribute spots, and radio stations receive spots. So it’s entirely possible that a radio station could use all three of the basic functions of our site.
The billing system is transaction-based. When you send us a spot, you get a credit. So if you’re a recording studio, and all you do is send us spots, then SpotTaxi sends you a check in the mail, based on a percentage of the order. If you’re a person who traffics the spots or decides where those spots get sent, then you get a bill, and typically, that would be the advertising agency. And if you’re a receiver of spots, then you don’t get a bill or a credit. You basically get the access to receive spots that you own.
JV: That’s an interesting idea, paying the people who upload spots for distribution.
Peter: Yes, and that’s an important part of the formula that I feel comes from some of our insight to the process that is different from the status quo because we are studio owners. We really know the advertising business and the production studio business much more than we know the radio business. But who’s the customer here? Well, it’s the agency. They’re the ones who are paying the bills. They’re the ones who are buying the air-time on the radio stations.
Now, as studio owners back in the old days, I would pull a bunch of reel-to-reel dubs. I’d charge seven bucks a piece for them, and it would cost me about a buck and a half to make them. You throw a buck’s worth of labor on it, and I was clearing seventy percent. Enter DG Systems who comes along and says, “You’ll be our marketing partner, and together we’ll go out and sell this new service, and it’ll be really cool because you don’t have to keep up those tape machines anymore. You can just load the spots in the box and send them out.” But they, in my opinion, made a fundamental mistake by selling around me because I find out a year later that there is a separate division that is selling to my clients. So I have clients whom I’m taking out to lunch and selling on this distribution system. Meanwhile, I’m taking a hit on my mark, on my radio dubs, right? And little do I know, they’re selling agencies that I’m selling. It’s some different person I never heard of before. And fairly soon I start hearing agencies say, “You know what. We’re not going to be paying you and letting you mark that up to us any more. We’re going to do business direct, and you’re going to get a fee for uploading this stuff.” At that point, my mark really went to hell. It went a step further where the actual advertisers were being sold behind the backs of the agencies. So this same sort of problem got passed on to the agencies as well, and now they’re being sort of cut out of it.
The point is that there was a fair amount of bad blood that was created by these business practices. It’s incredibly important to this company to maintain integrity with its customers where we want to present a very simple billing system that doesn’t care. There’s no incentive for us to go sell around the studio, because we pay the same amount of money if an agency wants to take a master tape back to its office and load it into the system themselves, they essentially get a wholesale rate because they get the credit and they get the bill. The system doesn’t care. Whoever sends us the spot gets the credit. If the agency traffics the spot, they get the bill. That works two ways. That allows an agency to take a master tape back to the office and load it in and get a wholesale rate, but it’s not such a large amount of money that there’s much incentive there for the agency to do it. But there’s zero incentive for our company to give a shit who does it. That keeps us clean of having any incentive to sell around anybody, because we’re going to give that payback anyway. So we don’t care who does it. We let the politics work themselves out.
But it also lets the recording studio say to a small agency, “Hey, let me traffic this for you,” which is typically the way it works right now if you’re using DG or you’re using dubs. You’re faxing things around or typing up FedEx envelopes or keying into a DG system. This allows a small agency—which there are becoming many more of, two and three person shops—to say, “You know, I don’t have a Traffic Department, so Mr. Studio Owner, I will fax you the instructions or leave it at the end of the session with you, and you key it in for me and send it.” That allows the studio to get the bill, to get the credit, and then to mark it up to their client however they see fit. They can mark it way up because it’s a tremendous amount of work, or they can take a small mark and try really hard to keep the business. So it allows a very clean politic.
JV: What other features make SpotTaxi unique?
Peter: We’re not about hardware and telephone lines. We are 56K modem compatible, so POTS lines work. It’s slow, and there are still going to be a fair amount of stations that are going to be on 56K modems. But we’ve done a lot of research, and the market says that stations are using the web all the time, and they’re going to have DSL lines or T1s or IDSN or whatever.
And we’re not a push system; we’re a pull system. Because of the fact that we don’t send you spots, being a radio station, you go get them. That allows you the flexibility to go get the spot you need now. If you have twenty spots in your queue, and they don’t all run for another week, but the one that runs in two hours is there, then you just get that one.
Now, we’ve also developed a decoder that essentially can be programmed to log on automatically and go get your spots. But, because we’re a pull system, it alleviates the issues with firewalls and people who want to limit the access incoming. So I feel it’s very clever. We call it our emulated push system. It acts like a push system because you can program the thing to go out and get all your spots at two o’clock in the morning. But at the same time, it allows us to use the Internet because there are not firewall issues, and you go get what you need and then log off. So you don’t have to leave your computer hooked up to the Internet all night. We know there will be some Internet issues. You know, “I don’t want my people in the dub room having a browser.” Well, you know what? E-mail is going to be like the telephone, and you want them to have a telephone. We’re a service that happens to use Windows or Macintosh, and we use the Internet. And if people don’t want others to have access to a computer, then we’re just going to have to send them a dub. We are also building a CD replication facility that will allow us to send out CDs rather than tape dubs.
JV: The launch was in February. How’s it going?
Peter: It’s live and it works. Right now the status is that the encoder’s ugly. We’re going to make it pretty, but we’re not to worried about that.
JV: The encoder, I take it, is software that people would download and then use to encode the files?
Peter: Exactly. It logs on directly to us. The first thing that comes up is a screen for the user name and password. Once it recognizes you, then it boots up. You can import your files or record them in, and then there are fields for advertising agency info and all that kind of stuff. It will import SE2, AIF, and Wave, and it then encodes them to MP2 and sends us the MP2 file.
JV: Sounds as simple as loading the software, pointing to a file, and clicking the Send button.
Peter: Right. And I’ll tell you something. One of the biggest reasons we feel for our existence being necessary is that anybody can make a wave file, put it into the computer, build an FTP folder, and have somebody come and get it. Or they can e-mail it to somebody. But the nice thing about this is that we want it to be cheap enough so that it’s not so expensive that you have to think twice about spending the money to get it there, and it’s always the same system. You always know how to use it, and no matter who you’re sending it to, you always go to the same web site address and pull that radio station’s call letters down from the list and send it there. And if you’re an agency, you’ll always know where your spots are. I don’t care who made them.
And we archive everything, and we don’t charge for it unless you need to use it. We’ll keep everything that’s ever been done. Our philosophy is that we can keep buying terabyte servers, as many as we need. The bigger we get, the cheaper they’ll get. A classic scenario is that you’re a recording studio. You get a call from a client. The client says, “I’m doing this new pitch to Burger King, and I’ve got these McDonald’s spots we did a couple years ago. They were really great, and we produced them, but they never bought off on them. I want to use that same concept, so I need you to send me a copy of those on cassette. And I need them by the end of the day.” Right? So you rip your place to shreds, and you don’t have them. You fire a couple of people and scream and piss and moan. Then you go to your telephone and get on the phone to grovel to the client, and the client says, “Oh God, I’m sorry. I forgot to call you. I didn’t do those at your place.” Then you have to go back and hire the people you fired again and give them a raise, so it’s ugly. The point is, we want to be a clearing house. We want agencies to be able to go and find their own spots. So we’ve got a fairly detailed history reporting system where you can parse it by day. You can go look and find the spots that are in there, and if you need to send some mail approvals to somebody, you just go find them and send them to somebody. And if you need to re-traffic them, re-broadcast them, then we charge you a one-time fee to pull them out of archive. But it’s cheap.
JV: How much?
Peter: Ten bucks.
JV: You mentioned a list of stations on the site for people to choose destinations. How do you get on the list?
Peter: We have a strategic alliance with someone who is in the distribution list business. I can’t say whom. They have all of the current information, and we’re in a joint venture together.
JV: Are all the stations in the country listed there?
Peter: Yes.
JV: So you can send to any station as long as it has an e-mail address, is that it?
Peter: Right. And if they don’t have an e-mail address, then they would get a CD sent to their mailing address.
JV: And it’s not only radio stations, but a list of ad agencies and production houses as well?
Peter: Yes, and those actually will be garnered by sign-up. We have an automated e-mail response sign-up sheet, and then we enter that data manually and build our database.
JV: But initially, it’s a database of radio stations?
Peter: Yes.
JV: You mentioned thumbnail approval versions of spots that are smaller files for faster delivery. How fast?
Peter: We’re looking at a big deal in Canada right now. We’re talking with somebody up there. They’re sitting in their office, and I’m walking them through the site. They send me a thumbnail approval copy, and I’m just sitting there talking to them on the phone and they go, “Okay, there you go.” And I go, “ping” and there it is. I click on it, and ten seconds later it’s playing a spot. It’s amazing.
JV: These are mpeg files?
Peter: These would be the QDMC, Q Design Music Codec, streaming file version. The only thing that’s mpeg2 is the final broadcast quality spot, and they take roughly six minutes to download at a 56K modem speed. The streams start playing almost instantly, maybe five to ten seconds.
JV: What player is required to play these thumbnail versions?
Peter: QuickTime, which of course is available for Mac and Windows.
JV: Why mpeg2 over mpeg3? We’ve heard so much about MP3.
Peter: MP3 is a consumer format, and MP2 is quite literally the state of the industry right now. The radio broadcast industry has wrapped its head around MP2. It is a standard. And there are editors who will edit MP2 encoded files.
We’re prepared to go to MP3. I’ve already made all the necessary connections in case we do decide to go to MP3. We could do it quite quickly. But really, the industry is still an MP2 industry. It’s a little larger file size, but not much.
JV: So how does a radio station get involved? If they want to send something, is it pretty much just a matter of hitting your web site and going to work?
Peter: Yes, but it will probably be another month to two months before we open it up. Right now we’re beta testing the Seattle market, and we’ve got all the stations in the Seattle area signed up. They’re all excited about it. I’ve got agencies using it here in Seattle. We’re hoping to be ready to allow the world in by NAB.
JV: What’s involved in signing up?
Peter: All you do is log on to SpotTaxi.com, click the sign-up button, and fill a form out. Then we need to call you back to confirm you are who you say you are since you’ll be getting a bill for any upload. We’ve got to make sure there’s a path to the billing department, make sure it’s legitimate. It is very simple.
JV: Is there any charge for your encoding software?
Peter: The software is free.
JV: And once the file is uploaded to SpotTaxi.com, a recipient can retrieve it from any computer with a browser?
Peter: Yes, but we definitely prefer to use Internet Explorer.
JV: Ten bucks per download. So, if five hundred stations download a spot…
Peter: That’s five thousand bucks. But each radio station can download it multiple times at no charge. Any radio station that has an account can log fifteen people on and download the spot fifteen times, but it’s only billed once based on the spot getting sent to that station’s call letters one time. That puts it into their queue so they can see it and download it as much as they want.
And it’s ten dollars for between one and four spots. So, if you’re sending four spots to a station, it’s actually just two dollars and fifty cents apiece. The typical order is two spots to between six and ten stations, so they’re going to pay about five bucks a pop. And that’s our basic pricing model. And that’s with a guaranteed two-hour delivery time, which we hope to get down to a half an hour once we build our infrastructure.
JV: What are some things you see down the road for SpotTaxi.com?
Peter: We’re poised to do ad insertion to web casting. We’re going to be sitting on a fat server full of hundreds of fresh spots that were delivered to us that day, and if Bank of America wants to insert an ad into your browser, we can serve it up.
In other words, the typical web casting model for radio stations has been put your broadcast on the air and include the commercials with it, or have sort of a pay-per-view sort of deal where you can serve it up without any commercials, but you pay a fee. Or the model that says, you listen to our station but we’re going to be blasting a bunch of banners at you, and that’s where they get their revenue. Well, banner revenue has not really taken off, and so certainly one of the new paradigms for web casting is actual radio spots that are going to be very targeted to a user. And one of the things that is going to happen right away is that stations that are streaming are going to want to make some money. They’re going to start wanting to insert ads, and we’ll be in a perfect position to serve up those ads.
There are several things down the road, and that’s certainly one of the biggest. And Central Media intends to be a company that provides lots of service to the advertising, radio, and recording production facility community. SpotTaxi is our first product, and our anchor product, but we certainly intend to have many more products that leverage this network of people talking to each other and building a community in the broadcast industry. That’s our goal. If you’re a radio station, and you need to buy some headphones, you could go to CentralMedia.com and have links to lots of vendors for equipment.
I’m really excited about it and I think the product’s really going to take off. It’s still got some rough edges, but I think we’re right where we want to be to be launching in the next month. And philosophically, we really want everybody to help us build this product. We don’t want to dictate the way it’s going to be. We want to take all the input from people and build a product that develops a standardized system that everybody’s going to love to use.
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