One day in 2005, Brad Jefferson's friend Stevie Clifton was grumbling to Jefferson about the complexity and huge amount of time he spent turning photos, video and text into professional-looking graphics as a lead animator at a national TV broadcast network. Surely there was a way to automate the process.
A year later Jefferson, Clifton, his brother Tom, and Jason Hsiao--friends since their high school days in Bellevue, Wash.--quit their jobs and pooled their savings to meet that challenge, forming a company called Animoto. "We didn't know that the technology was possible when we founded the company," admits Jefferson, 33, who managed sales and service at a midsize software firm before becoming Animoto's chief executive.
After a year spent building and fine-tuning their software, Animoto launched in New York City in August 2007. Since then, it has turned out 7 million videos and could pull in revenues of $5 million this year. Web retailer Amazon purchased an undisclosed stake in Animoto last year. In June Animoto raised $4.4 million in funding from Amazon, venture capital firms and individual investors.
Users simply upload photos from their computer, Facebook or the iPhone to the Animoto Web site, and select background music. (Starting in late August, users will be able to incorporate video clips, too.) Animoto's patent-pending software, which the company calls "cinematic artificial intelligence," acts as a virtual director and editor, analyzing the photos and the music and automatically rendering a video that moves to the beat of the music.
Videos are ready in minutes and look good enough to broadcast. Users can upload them to YouTube, Facebook and MySpace, download them to their computers or ask Animoto to burn them onto a DVD. Some videos, including one that documents recent unrest in Honduras, have attracted tens of thousands of views. Though the vast majority of Animoto users live in the U.S., Jefferson says people in more than 200 countries have created videos. "We're huge in Kenya," he beams.
Creating a 30-second video is free. Anything longer than that costs $3. (Teachers, nonprofits and charities get free access.) Corporate users--mostly realtors, marketers and wedding photographers--keep things afloat by paying subscription fees ranging from $99 for three months to $249 a year. Jefferson says 10% of Animoto's 800,000 registered users are paying customers. Animoto has a broader reach on Facebook, where 2 million people have created videos. Its iPhone app has been downloaded 300,000 times.
Word of mouth has fueled most of Animoto's growth. The co-founders initially assumed the service would attract musicians and artists, perhaps because of their own artistic backgrounds. They soon realized people were using the technology in more personal ways: to create baby announcements, document graduations, honor the deceased, and display their love for their pets and even their cars.
Animoto responded by expanding its music library. (It currently offers around 400 tracks, mostly from independent artists and labels.) "Music is the biggest editorial choice," notes Hsiao. "We had to make sure we were covering a range of styles." Late last year, the company added the option to show photos at "half-time" or "double-time" speed, and to embed text in videos.
The changes transformed Animoto videos from "movie trailers" into "short-form documentaries that can tell stories," says Jefferson. He is particularly excited about the addition of video clips to the mix. "We view that as a huge game changer," he says. "Editing video is a nightmare."
Animoto's technology is also getting smarter about the visuals in its videos. Eventually, its AI algorithms will be able to take into account the metadata attached to photos, such as time stamps and geo-tags, and delve into the pixels to detect a face, says Jefferson.
Like other tech companies, Animoto eats its own dog food. It regularly features employee videos at Monday staff meetings and asks new hires and interns to introduce themselves via Animoto video. Hsiao proposed to his wife via Animoto. (The video, which melds pictures of the couple with photos of Hsiao holding poster boards that spell out "Will ... you...marry...me?" is a tearjerker.)
The company has just 20 employees, most of whom work in Animoto's eclectic New York office. To grow, Jefferson wants to strike partnerships with more social-networking sites, online photo sites and gadget makers to make Animoto more accessible from cellphones, wi-fi-enabled digital cameras and on TVs. Says Jefferson: "We want to be everywhere there are photos, music and video."