Jeff Bezos, Spark Capital, Bet on Aviary, a Web-Based Would-Be Adobe

aviaryLast week, Jeff Bezos made $2 billion in one day, courtesy of a massive spike in Amazon (AMZN) shares. What will he do with the extra dough?

Perhaps plow it into more startups like Aviary, a Long Island-based design software company.

Bezos, via his Bezos Expeditions fund, has followed up an 2009 investment in the company with another slug of cash. It’s part of a $7 million Series B round led by Spark Capital, best known in these parts as the guys who have made a very big bet on Twitter — which Bezos also invested in.

If you’re sick of hearing about Web startups with just a vaguest sense of a business plan, Aviary may be a refreshing change. It is trying to make money by selling cheap, Web-based alternatives to popular, expensive, design software, primarily the stuff that Adobe (ADBE) sells, like Photoshop and Illustrator. Granted, it doesn’t make much money yet: It only began selling $24.95 subscriptions to its software suite earlier this year.

Down the line, Aviary also imagines that it will be able to create an online marketplace where the creative types that use its software to bid on work assignments. Sort of like eBay (EBAY) meets Craigslist meets Etsy meets Amazon’s own Mechanical Turk.

Here’s the full press release:

Aviary Secures $7 Million in Series B Financing Led by Spark Capital

Provider of Creative Application Suite in the Cloud Makes Creation Accessible to All and Advances the Growing Digital Economy

LONG ISLAND, New York (October 26, 2009) – Aviary, Inc., a pioneer of a creative application suite in the cloud, today announced that it has received $7 million in Series B financing led by Spark Capital, with participation from existing investors, including Bezos Expeditions, a personal investment company of Jeff Bezos. With a suite of digital creation and editing software available as an online service, Aviary offers a simple and cost-effective solution for creators of all genres – from graphic design to audio editing – to express their creative talents and participate in the burgeoning market for digital goods. In conjunction with the investment, Mo Koyfman of Spark Capital will be joining Aviary’s board of directors.

“Aviary’s robust suite of online creative tools is fundamentally democratizing digital creation. Whereas the market for digital goods was once reserved exclusively for creators using proprietary desktop software, Aviary is delivering creative applications that allow anyone with a browser to participate,” said Koyfman. “And by doing so in the cloud, Aviary allows for seamless online creation, collaboration, distribution and ultimately monetization previously not possible. The Aviary model has the potential to exponentially increase the number of creators and collaborators contributing to the digital economy.”

Until now, the digital creation market has been largely dominated by desktop software solutions which are often cost prohibitive and involve complicated interfaces. By contrast, Aviary offers a powerful creative toolset in the cloud that enables professional and amateur creators alike to easily create their own digital works. The basic Aviary suite is available for free to users and includes an image editor, vector editor, audio editor and more. Users can also upgrade to the pro suite to gain commercial features such as unlimited private storage, as well as collaboration and community enhancements. For more information, visit

“We are disrupting the status quo by eliminating the long-held barriers to digital creation and giving creators the tools they need to create, market and monetize their vision,” said Avi Muchnick, founder & CEO of Aviary, Inc. “We are extremely excited to have Spark Capital on board. Their broad-ranging internet, software and consumer experience will be a tremendous asset to us in furthering our mission to make creation accessible to creators of all genres.”

How Much Will You Have to Pay For Hulu? Nothing. How Much Will You Pay for “Hulu Plus”? Good Question.

the_office_promo_pic_nbcIs Hulu putting up a pay wall around its Web TV site? Nope. Does Hulu want to charge people to watch Web TV? Yes.

Confused? Don’t be. It’s pretty straightforward: Hulu, the joint venture between News Corp.’s (NWS) Fox, GE’s (GE) NBC Universal and Disney’s (DIS) ABC, doesn’t plan on charging people to watch the stuff it’s currently airing on the site–a mix of first-run shows from broadcast TV, a limited number of cable TV shows and a smattering of movies. But Hulu is trying to figure out how to create some kind of premium offering where you’ll pay for stuff that isn’t on the site right now.

That’s what Hulu’s backers have been saying for months, so it’s a little puzzling that News Corp. COO Chase Carey’s comments got folks worked up yesterday. Meanwhile, multiple sources familiar with Hulu’s plans tell me that…Hulu doesn’t actually have a plan yet, but it is trying to piece one together.

There are some pretty obvious ways to go here. Hulu could sell movies or TV shows on a pay-per-view basis, or it could sell subscriptions to shows it doesn’t offer now or to a deeper offering of shows it already has. You could call it “Hulu Plus” (no charge for that one guys).

If you’re a fan of Fox’s “Family Guy,” for instance, Hulu is only of limited help: The site only has the most recent five episodes. So how much would you pay to watch the rest of them?

If you don’t have an answer for that, don’t worry–Team Hulu doesn’t know, either. Nor can they tell you if airing free shows on Hulu has cut into other revenue streams like broadcast TV advertising or DVD sales, even though “we’ve done a thousand regression analyses on this,” says an industry executive involved in the site.

Do bear in mind that this was a problem Hulu’s backers didn’t really envision when they were dreaming up the site; at the time, they were most concerned with building a video site that would allow them to barter with Google (GOOG) and Apple (AAPL).

Now they own one of the biggest video sites on the Web, one they say is performing ahead of plan. And Hulu is selling enough advertising that it’s coming close to reaching break-even, according to executives I spoke to this week.

But at the very least, adding a pay component to Hulu helps mollify those who fear the site is cannibalizing their existing businesses. Or who simply want another revenue stream. And a pay element dovetails with Hulu’s interest in joining up with the “authentication” movement pushed by cable guys like Comcast (CMCSA) and Time Warner (TWX).

Meanwhile, here’s the use case for Hulu that its backers originally envisioned–“catch up viewing.” I was on a plane when last night’s episode of the “The Office” aired, but I can watch the whole thing–with ads I can’t skip–on my laptop today. And so can you:

MySpace reveals new music features

MySpace has unveiled its first raft of new music features since its chief executive Owen Van Natta took over the company nearly six months ago and began repositioning the product as content distribution platform.

Harry Reid Fires Back at Critical Public Option Ad

The Huffington Post previewed an ad, earlier this week, that euphemistically asked whether Senate Majority Leader Harry Reid (D-Nevada) has the “toughness” to get a public health insurance option passed.  Mediaite has been trying for several days to get a statement from Senator Reid’s office, and we finally have it.  They must have needed the time so they could make it extra-tough.

They’re just in the nick of time, too.  The ad, produced by the Progressive Change Campaign Committee, begins airing in Nevada today.

Reid’s office sent us the following statement late yesterday:

Reid’s position on the public option hasn’t changed.

Kaplow! I think the impact of that thing just fused several of my vertabrae!

In case you don’t know Reid’s position on the public option, here’s their only-slightly-less-terse statement to HuffPo:

“Senator Reid has always been a strong supporter of the public option and he will continue to work with the White House and the relevant committees to pass the strongest bill possible.”

Of course, the ad doesn’t question Reid’s position on the public option at all, but rather, his ability to get it done.

On its face, Reid’s posture seems to mirror that of the White House. The key difference is that Reid’s promise to pass “the strongest bill possible” leaves open the idea of passing something just to get it passed. The White House has said that the President will not sign a law that doesn’t “provide choice and competition,” and is not interested in signing something just to get a bill passed.

At this point, what Reid or the White House have to say is irrelevant.  What is at issue is whether Reid and the White House are listening.  The American people want the public option, and they know that the President, Reid, and the vast majority of congressional Democrats support it. If they fail to get it passed, they will have proven the uselessness of a Democratic majority.

Vevo Gets its Investor: Abu Dhabi Media Joins “Hulu for Music Videos”

vevo-logoVevo, the music industry’s version of Hulu, now has its own version of Providence Equity, the outside investors who took a flyer on the Web TV and movie joint venture: Abu Dhabi Media Company has purchased a stake in the company from owners Universal Music and Sony (SNE). Terms of the deal haven’t been disclosed, but I’m told the transaction values the joint venture at $300 million. Google’s YouTube (GOOG) isn’t an owner in the JV but will share revenue in exchange for lending Vevo its massive distribution platform.

More shortly. Here’s the release:


Abu Dhabi Media Company Joins Universal Music Group and Sony Music Entertainment
for World Class Online Premium Music Service

New York, New York, Monday, October 19, 2009…VEVO, the new premium music video and entertainment service powered by YouTube, has received a strategic investment from Abu Dhabi Media Company (ADMC), one of the world’s fastest growing, multi-platform media organizations. The announcement was made today by Doug Morris, Chairman & CEO of Universal Music Group and Co-Chairman/Founder of VEVO, Rolf Schmidt-Holtz, Chief Executive Officer of Sony Music Entertainment & Co-Chairman of VEVO, Rio Caraeff, President & Chief Executive Officer of VEVO, H.E. Mohamed Khalaf Al Mazroui, Chairman of ADMC, and Edward Borgerding, Chief Executive Officer of ADMC. Terms of the agreement were not disclosed.

With this transaction, VEVO is now formed as an independent and fully funded entity with Universal Music Group (UMG), Sony Music Entertainment (SME) and Abu Dhabi Media Company (ADMC) as founding shareholders. Funding from the shareholders will enable VEVO to come to market with an attractive premium music offering for consumers and advertisers alike.

Launching in the United States and Canada later this year with a further international roadmap to be announced, VEVO will be a premium destination and syndication network for the very best in top-notch music video content that will leverage the massive existing traffic of YouTube.

“This global partnership flags Abu Dhabi Media Company’s commitment to establish a leading position in the digital media industry. It is part of an integrated approach to expanding the global digital presence and brand portfolio of Abu Dhabi Media Company, and it illustrates our partnering approach with innovators in digital media services and technologies”, stated H.E. Mohamed Khalaf Al Mazroui, Chairman of ADMC, on joining UMG and SME to create VEVO.

“It’s a credit to the music community, and to the global opportunity that VEVO represents, that we have been able to attract such a solid investment partner with the vision and track record of Abu Dhabi Media Company,” commented Rio Caraeff, President & Chief Executive Officer of VEVO. “Abu Dhabi Media Company brings to the venture important funding support and a team with enormous global media experience and insight, and we look forward to working with them to seize the many opportunities ahead of us.”

“Consumer demand for music video entertainment is growing significantly today and is transforming the digital entertainment market and the music industry by fuelling new media business models. VEVO fits our vision and goals perfectly, as we are expanding our capabilities and continue to build the market for digital entertainment around the world.  VEVO will redefine the way premium music video entertainment is consumed, created and shared in a global community of music audiences,” said Edward Borgerding, Chief Executive Officer of Abu Dhabi Media Company

“We’re now entering a new exciting phase in the digital media industry in the region and we’re determined to be at the forefront of it”, added Ricky Ghai, ADMC’s Executive Director, Digital Group. “With VEVO there’s real opportunity for incredible growth, as both brand advertisers and consumers are looking for new premium video experiences online.”

Does Checkbook Blogging Pay Off? “Hard to Measure,” Says Gawker Media’s Nick Denton.

nick-dentonAnother scandal, another Gawker story, and another payday for the person who sold Gawker the news. No big deal, says Nick Denton, the blog impresario: We’ll keep doing it.

The specifics in this case involve the alleged Balloon Boy hoax, and a 25-year-old student who says he was involved, unwittingly, in the stunt. Last week, Robert Thomas announced, via Business Insider, that he’d sell his story to anyone willing to pay him $5,000 to $8,000. Denton’s company wrote a check for the tale, though it says it paid much less than Thomas’s ask.

This is becoming standard practice for Denton, who announced in July that he was willing to pay for juicy stories, tips and other stuff he could publish. In August, he shelled out for video of “Grey’s Anatomy” star Eric Dane, his wife Rebecca Gayheart and another woman in various states of undress.

Semi-naked semi-celebrities draw more eyeballs than stories about delusional reality show aspirants, apparently: The “McSteamy” clips have generated more than four million views this fall, while Denton predicts the Balloon Boy saga will ultimately do one million.

My question: Does paying for this stuff make sense? After announcing a year ago that advertising was going to fall off a cliff, Denton now says he’s been making good money, after all. So does this kind of checkbook blogging produce more profit? Denton’s answer, via email:

Hard to measure profitability. Short-term effect. Balloon boy story will probably go to 1m views. But you know one can’t easily sell advertising into a spike. And video hosting costs pretty significant–though not this time.

Why you think just two bought stories? We paid 10k for that Photoshop expose a couple years ago. Not really a new thing.

A story is a story. We’re not squeamish about the means. And the paroxysms of the j-school ethicists add to the satisfaction.

You were expecting a more straightforward answer? Hah!

If you want, you can check out Gawker’s rate card, make some assumptions, and conclude that Denton can’t afford to pay his story-sellers that much and still end up in the black, even at one million page views. And I’m reasonably confident that Denton is very interested in measuring profitability, and has worked out an equation that pays his story-sellers in proportion to traffic, but without breaking his bank.

But the last part of Denton’s missive–quivering ethicist strawmen aside–is what really rings true. He really does get a huge kick out of this stuff: Entertaining himself with his blog empire, tweaking enemies real and imagined, and shrugging about it publicly.

It’d be wrong to say you can’t put a price on that. But whatever that price is, Denton can afford it.

Plastic Logic Offers a (Quick) Look at Its Kindle Killer: Meet the Que

Plastic Logic, which has been talking up its coming e-reader for some time now but hasn’t actually started selling it, has a little more to say: It will have more to say about its coming e-reader in a few months.

Oh, and its coming e-reader has a name–the Que. Here are some glimpses of what it looks like in profile and dim lighting:




And here are some general descriptions of the Que, from a press release the company put out today:

With QUE, Plastic Logic is expanding the eReader category, which to date has focused on leisure reading devices and casual users. QUE is designed to simplify the multi-faceted lifestyle of the modern businessperson, and to quite literally lighten their workload. In addition to connecting its users with their business and professional newspapers, books and periodicals, QUE supports the document formats business users need (including PDF, Word, PowerPoint, and Excel documents) and features powerful tools for interacting with and managing the content.

“The QUE brand stands for a premium reading experience,” said Richard Archuleta, CEO of Plastic Logic. “QUE enhances business performance and gives you a competitive edge. More than an eReader, QUE means business.”

Extra thin, lightweight and wireless-enabled, QUE is the size of an 8.5 x 11 inch pad of paper, less than a 1/3 inch thick, and weighs less than many periodicals. The innovative QUE proReader features the largest screen in the industry, an intuitive touch screen user interface, and provides access to a file cabinet’s worth of documents, plus your favorite–and most necessary–publications.

Want other details? You’ll have to wait until Jan. 7, when Plastic Logic says it plans to offer “full product specifications, availability and pricing” information at the Consumer Electronics Show.

Which means Plastic Logic will miss out entirely on the upcoming holiday season, during which consumers will be presented with a slew of e-reader choices: There’s Amazon’s (AMZN) Kindle, of course, and Sony’s (SNE) Reader line, an entry from iRex, and perhaps Barnes & Noble’s (BKS) device as well.

The bookseller, which will support both Plastic Logic’s device and the one from iRex, is set to show off its branded reader on Tuesday.

I’m assuming that Plastic Logic will shrug that off, given that it’s presenting the Que as a business device (you caught that in the press release, right?). But it sure would be nice to have it available sooner than later, right? Then again, Apple’s (AAPL) purported tablet device isn’t supposed to show up until next year either.

Here’s a video of an extensive demo of the then-unnamed Que Plastic Logic CEO Richard Archuleta provided for Walt Mossberg and Kara Swisher at the seventh D: All Things Digital conference last May.

[ See post to watch video ]