Voquette puts Web audio in your pocket
By Lawrence Aragon
Redherring.com, March 20, 2000
He was the first CEO of Yahoo (Nasdaq: YHOO), a seed investor at eBay (Nasdaq: EBAY), and an investor in and CEO of NetChannel, which was bought by America Online (NYSE: AOL). For most people, that would be enough. Not for Philip Monego. The serial entrepreneur and investor wants to hit it big again with Voquette, a Web audio startup.
Mr. Monego, now Voquette's CEO, is off to a good start. His startup -- which acts as a kind of universal translator and player for virtually all audio formats -- announced Wednesday that it landed $17.3 million in funding from top-drawer investors 21st Century Internet Venture Partners, Citigroup Investments (NYSE: C), MP3.com (Nasdaq: MPPP), and Royal Philips Electronics (NYSE: PHG). The company's seed backers also chipped in. Among them are iMinds Ventures, Broadview International, Net Angels Pareto Partners, and individuals such as Mr. Monego.
The round was oversubscribed by 50 percent, Mr. Monego says. He plans to go out for one more round later this year, then take Voquette public in the first quarter of 2001.
Voquette clearly has a large opportunity in front of it, considering that about 100 million people have already downloaded digital audio files, such as MP3 files. Analysts predict that more than 3 million devices for playing MP3 files, such as Diamond Multimedia's Rio, will be sold by the end of the year.
Voquette's advantage is that its software, hardware, and Web site allow people to capture virtually any kind of audio content from the Web -- even streaming audio -- and store it on cassette tapes or minidiscs that can be played anywhere or anytime. Eventually, the company plans to offer the ability to download other types of content, such as video, that can be snatched off the Web and played in portable players, Mr. Monego says.
LISTEN TO THE POSSIBILITIES
While the online music industry has been hard of hearing when it comes to profits, analysts say Voquette is in the right place at the right time with its technology.
"There has been this explosion of digital audio, but there is this big chasm between what we can get and what we can do with it," says Kathleen Maher, editor in chief of The Peddie Report, a weekly digital media newsletter. "Voquette is a fabulous bridge between the two."
Voquette stands poised to make a real impact in the market. Though it hasn't generated much buzz, its technology is already in shipping products. And it doesn't hurt when a major consumer electronics player like Philips invests. Philips offers Voquette software on the $99 Net Recorder, and Bernard Donners, general manager of Philips portable audio products division, says it will bundle it in future Internet audio products and link those devices to Philips' Web sites, codeveloped with Voquette to deliver content over the Web. The content would include music, spoken word, and text-to-speech conversion of Web pages and email.
The company is pursuing a "billion-dollar opportunity," says Peter Bershatsky, a vice president and Internet analyst for Broadview, an M & A consultancy and one of Voquette's backers. "They're solving the 'last yard' problem, which is taking audio off a PC to a mobile device," he says. Mr. Bershatsky believes it's the only company in its space.
DEFINING THE BUSINESS
Voquette has three lines of business. One, it makes and licenses a peripheral device called the NetLink adapter that converts, say, audio in an MP3 format into a form that can be recorded on an audio cassette. The Philips NetRecorder bundles the Voquette adapter and software.
Two, it has developed software called the Voquette Media Manager (VMM) that allows users to play virtually any audio format -- from MP3 to RealAudio to Windows Media to .wav files to proprietary spoken-word formats such as Audible (Nasdaq: ADBL)'s. Sharp sells a minidisc player with VMM for $250. VMM, which is free on the Web, also acts as an overarching platform that manages all the disparate players that run audio files. Additionally, an advanced version of VMM that costs $30 lets users convert text, such as email, to speech that can be stored and listened to later. Mr. Monego says he sets his VMM to make a cassette recording of specified streaming MP3 material at 6 a.m. daily and listens to the tape on his way to work.
Voquette's third -- and potentially largest -- line of business is its Web site, now in beta mode. It wants to build a major audio content portal that draws advertising revenue and sponsorships from content developers. The company could potentially take a cut of the sales of audio downloads from its site, creating a sizable revenue stream, one analyst says.
ABOUT THOSE LAWYERS
Voquette hopes to stay outside the litigation between the Recording Industry Association of America and MP3.com, which accuses MP3.com of illegally creating tens of thousands of digital audio files from copyrighted compact discs. MP3.com has countersued.
"We plan to incorporate and support all the secured technology being adopted" that protects copyrighted audio, Mr. Monego says. The company supports SDMI, the protected digital music format. That only makes sense if Voquette hopes to capture a share of the sales of music and other audio files sold over the Web. However, if all the content is free, it will lose out on what could be a substantial revenue stream.
Of course, if the opportunity Voquette is pursuing is as large as Mr. Monego believes it to be, you can expect plenty of other companies to jump on its coattails. Ms. Maher says she expects to see followers, but most likely they'll attempt to do only part of what Voquette does -- such as produce an MP3 tape recorder. "What we will see immediately is companies that can do some of these things," she says. "But it will take a company a significant amount of effort to do all of them."
While Mr. Monego expects competition, he believes his company is well positioned to fend off attacks. "I don't know of anybody taking as broad a position," he says. "We can be attacked on any one side, but I don't think we can be attacked on all three."
A BUDDING STANDARD?
Other companies with audio players, such as Microsoft (Nasdaq: MSFT) and Realnetworks (Nasdaq: RNWK), are better funded and already have a considerable base of users. The problem for a high-profile company such as a Microsoft is that it is viewed as a "threat," so whatever overarching media manager it proposes would be unlikely to gain broad support, Mr. Bershatsky says.
Voquette, on the other hand, is viewed as "independent," allowing it to work with all of the competing parties, he adds. Moreover, anyone trying to match Voquette would face a technological barrier to entry. The kernel of the company's technology -- originally created by a group of Israeli entrepreneurs -- has been in development for three years. (Mr. Monego and a group of other investors bought a majority stake in the company Voquette grew out of -- Voquette Networks -- in May 1999.)
Ms. Maher figures Voquette has about a one-year lead over the competition. In that time, if it strikes lots of partnerships and gets its technology bundled into numerous products, it will be ahead of the game. "A lot of people will be walking around with these [Voquette-based] products, and other people will say, 'Wow, I need to get one of those,'" she says.
If it plays out that way, Mr. Monego will be singing all the way to the bank -- again.
Discuss MP3 trends in the ongoing MP3 forum, or visit the Discussions home page.
Related Stories
MP3.com's legal problems heated up in January.
The big record companies move onto the Internet -- cautiously -- with Artistdirect.
Listen.com also got big-label support.
Company Profiles
Voquette
MP3.com
Philips Electronics
Voquette puts Web audio in your pocket
By Lawrence Aragon
Redherring.com, March 20, 2000
He was the first CEO of Yahoo (Nasdaq: YHOO), a seed investor at eBay (Nasdaq: EBAY), and an investor in and CEO of NetChannel, which was bought by America Online (NYSE: AOL). For most people, that would be enough. Not for Philip Monego. The serial entrepreneur and investor wants to hit it big again with Voquette, a Web audio startup.
Mr. Monego, now Voquette's CEO, is off to a good start. His startup -- which acts as a kind of universal translator and player for virtually all audio formats -- announced Wednesday that it landed $17.3 million in funding from top-drawer investors 21st Century Internet Venture Partners, Citigroup Investments (NYSE: C), MP3.com (Nasdaq: MPPP), and Royal Philips Electronics (NYSE: PHG). The company's seed backers also chipped in. Among them are iMinds Ventures, Broadview International, Net Angels Pareto Partners, and individuals such as Mr. Monego.
The round was oversubscribed by 50 percent, Mr. Monego says. He plans to go out for one more round later this year, then take Voquette public in the first quarter of 2001.
Voquette clearly has a large opportunity in front of it, considering that about 100 million people have already downloaded digital audio files, such as MP3 files. Analysts predict that more than 3 million devices for playing MP3 files, such as Diamond Multimedia's Rio, will be sold by the end of the year.
Voquette's advantage is that its software, hardware, and Web site allow people to capture virtually any kind of audio content from the Web -- even streaming audio -- and store it on cassette tapes or minidiscs that can be played anywhere or anytime. Eventually, the company plans to offer the ability to download other types of content, such as video, that can be snatched off the Web and played in portable players, Mr. Monego says.
LISTEN TO THE POSSIBILITIES
While the online music industry has been hard of hearing when it comes to profits, analysts say Voquette is in the right place at the right time with its technology.
"There has been this explosion of digital audio, but there is this big chasm between what we can get and what we can do with it," says Kathleen Maher, editor in chief of The Peddie Report, a weekly digital media newsletter. "Voquette is a fabulous bridge between the two."
Voquette stands poised to make a real impact in the market. Though it hasn't generated much buzz, its technology is already in shipping products. And it doesn't hurt when a major consumer electronics player like Philips invests. Philips offers Voquette software on the $99 Net Recorder, and Bernard Donners, general manager of Philips portable audio products division, says it will bundle it in future Internet audio products and link those devices to Philips' Web sites, codeveloped with Voquette to deliver content over the Web. The content would include music, spoken word, and text-to-speech conversion of Web pages and email.
The company is pursuing a "billion-dollar opportunity," says Peter Bershatsky, a vice president and Internet analyst for Broadview, an M & A consultancy and one of Voquette's backers. "They're solving the 'last yard' problem, which is taking audio off a PC to a mobile device," he says. Mr. Bershatsky believes it's the only company in its space.
DEFINING THE BUSINESS
Voquette has three lines of business. One, it makes and licenses a peripheral device called the NetLink adapter that converts, say, audio in an MP3 format into a form that can be recorded on an audio cassette. The Philips NetRecorder bundles the Voquette adapter and software.
Two, it has developed software called the Voquette Media Manager (VMM) that allows users to play virtually any audio format -- from MP3 to RealAudio to Windows Media to .wav files to proprietary spoken-word formats such as Audible (Nasdaq: ADBL)'s. Sharp sells a minidisc player with VMM for $250. VMM, which is free on the Web, also acts as an overarching platform that manages all the disparate players that run audio files. Additionally, an advanced version of VMM that costs $30 lets users convert text, such as email, to speech that can be stored and listened to later. Mr. Monego says he sets his VMM to make a cassette recording of specified streaming MP3 material at 6 a.m. daily and listens to the tape on his way to work.
Voquette's third -- and potentially largest -- line of business is its Web site, now in beta mode. It wants to build a major audio content portal that draws advertising revenue and sponsorships from content developers. The company could potentially take a cut of the sales of audio downloads from its site, creating a sizable revenue stream, one analyst says.
ABOUT THOSE LAWYERS
Voquette hopes to stay outside the litigation between the Recording Industry Association of America and MP3.com, which accuses MP3.com of illegally creating tens of thousands of digital audio files from copyrighted compact discs. MP3.com has countersued.
"We plan to incorporate and support all the secured technology being adopted" that protects copyrighted audio, Mr. Monego says. The company supports SDMI, the protected digital music format. That only makes sense if Voquette hopes to capture a share of the sales of music and other audio files sold over the Web. However, if all the content is free, it will lose out on what could be a substantial revenue stream.
Of course, if the opportunity Voquette is pursuing is as large as Mr. Monego believes it to be, you can expect plenty of other companies to jump on its coattails. Ms. Maher says she expects to see followers, but most likely they'll attempt to do only part of what Voquette does -- such as produce an MP3 tape recorder. "What we will see immediately is companies that can do some of these things," she says. "But it will take a company a significant amount of effort to do all of them."
While Mr. Monego expects competition, he believes his company is well positioned to fend off attacks. "I don't know of anybody taking as broad a position," he says. "We can be attacked on any one side, but I don't think we can be attacked on all three."
A BUDDING STANDARD?
Other companies with audio players, such as Microsoft (Nasdaq: MSFT) and Realnetworks (Nasdaq: RNWK), are better funded and already have a considerable base of users. The problem for a high-profile company such as a Microsoft is that it is viewed as a "threat," so whatever overarching media manager it proposes would be unlikely to gain broad support, Mr. Bershatsky says.
Voquette, on the other hand, is viewed as "independent," allowing it to work with all of the competing parties, he adds. Moreover, anyone trying to match Voquette would face a technological barrier to entry. The kernel of the company's technology -- originally created by a group of Israeli entrepreneurs -- has been in development for three years. (Mr. Monego and a group of other investors bought a majority stake in the company Voquette grew out of -- Voquette Networks -- in May 1999.)
Ms. Maher figures Voquette has about a one-year lead over the competition. In that time, if it strikes lots of partnerships and gets its technology bundled into numerous products, it will be ahead of the game. "A lot of people will be walking around with these [Voquette-based] products, and other people will say, 'Wow, I need to get one of those,'" she says.
If it plays out that way, Mr. Monego will be singing all the way to the bank -- again.
Discuss MP3 trends in the ongoing MP3 forum, or visit the Discussions home page.
Related Stories
MP3.com's legal problems heated up in January.
The big record companies move onto the Internet -- cautiously -- with Artistdirect.
Listen.com also got big-label support.
Company Profiles
Voquette
MP3.com
Philips Electronics
Voquette puts Web audio in your pocket
By Lawrence Aragon
Redherring.com, March 20, 2000
He was the first CEO of Yahoo (Nasdaq: YHOO), a seed investor at eBay (Nasdaq: EBAY), and an investor in and CEO of NetChannel, which was bought by America Online (NYSE: AOL). For most people, that would be enough. Not for Philip Monego. The serial entrepreneur and investor wants to hit it big again with Voquette, a Web audio startup.
Mr. Monego, now Voquette's CEO, is off to a good start. His startup -- which acts as a kind of universal translator and player for virtually all audio formats -- announced Wednesday that it landed $17.3 million in funding from top-drawer investors 21st Century Internet Venture Partners, Citigroup Investments (NYSE: C), MP3.com (Nasdaq: MPPP), and Royal Philips Electronics (NYSE: PHG). The company's seed backers also chipped in. Among them are iMinds Ventures, Broadview International, Net Angels Pareto Partners, and individuals such as Mr. Monego.
The round was oversubscribed by 50 percent, Mr. Monego says. He plans to go out for one more round later this year, then take Voquette public in the first quarter of 2001.
Voquette clearly has a large opportunity in front of it, considering that about 100 million people have already downloaded digital audio files, such as MP3 files. Analysts predict that more than 3 million devices for playing MP3 files, such as Diamond Multimedia's Rio, will be sold by the end of the year.
Voquette's advantage is that its software, hardware, and Web site allow people to capture virtually any kind of audio content from the Web -- even streaming audio -- and store it on cassette tapes or minidiscs that can be played anywhere or anytime. Eventually, the company plans to offer the ability to download other types of content, such as video, that can be snatched off the Web and played in portable players, Mr. Monego says.
LISTEN TO THE POSSIBILITIES
While the online music industry has been hard of hearing when it comes to profits, analysts say Voquette is in the right place at the right time with its technology.
"There has been this explosion of digital audio, but there is this big chasm between what we can get and what we can do with it," says Kathleen Maher, editor in chief of The Peddie Report, a weekly digital media newsletter. "Voquette is a fabulous bridge between the two."
Voquette stands poised to make a real impact in the market. Though it hasn't generated much buzz, its technology is already in shipping products. And it doesn't hurt when a major consumer electronics player like Philips invests. Philips offers Voquette software on the $99 Net Recorder, and Bernard Donners, general manager of Philips portable audio products division, says it will bundle it in future Internet audio products and link those devices to Philips' Web sites, codeveloped with Voquette to deliver content over the Web. The content would include music, spoken word, and text-to-speech conversion of Web pages and email.
The company is pursuing a "billion-dollar opportunity," says Peter Bershatsky, a vice president and Internet analyst for Broadview, an M & A consultancy and one of Voquette's backers. "They're solving the 'last yard' problem, which is taking audio off a PC to a mobile device," he says. Mr. Bershatsky believes it's the only company in its space.
DEFINING THE BUSINESS
Voquette has three lines of business. One, it makes and licenses a peripheral device called the NetLink adapter that converts, say, audio in an MP3 format into a form that can be recorded on an audio cassette. The Philips NetRecorder bundles the Voquette adapter and software.
Two, it has developed software called the Voquette Media Manager (VMM) that allows users to play virtually any audio format -- from MP3 to RealAudio to Windows Media to .wav files to proprietary spoken-word formats such as Audible (Nasdaq: ADBL)'s. Sharp sells a minidisc player with VMM for $250. VMM, which is free on the Web, also acts as an overarching platform that manages all the disparate players that run audio files. Additionally, an advanced version of VMM that costs $30 lets users convert text, such as email, to speech that can be stored and listened to later. Mr. Monego says he sets his VMM to make a cassette recording of specified streaming MP3 material at 6 a.m. daily and listens to the tape on his way to work.
Voquette's third -- and potentially largest -- line of business is its Web site, now in beta mode. It wants to build a major audio content portal that draws advertising revenue and sponsorships from content developers. The company could potentially take a cut of the sales of audio downloads from its site, creating a sizable revenue stream, one analyst says.
ABOUT THOSE LAWYERS
Voquette hopes to stay outside the litigation between the Recording Industry Association of America and MP3.com, which accuses MP3.com of illegally creating tens of thousands of digital audio files from copyrighted compact discs. MP3.com has countersued.
"We plan to incorporate and support all the secured technology being adopted" that protects copyrighted audio, Mr. Monego says. The company supports SDMI, the protected digital music format. That only makes sense if Voquette hopes to capture a share of the sales of music and other audio files sold over the Web. However, if all the content is free, it will lose out on what could be a substantial revenue stream.
Of course, if the opportunity Voquette is pursuing is as large as Mr. Monego believes it to be, you can expect plenty of other companies to jump on its coattails. Ms. Maher says she expects to see followers, but most likely they'll attempt to do only part of what Voquette does -- such as produce an MP3 tape recorder. "What we will see immediately is companies that can do some of these things," she says. "But it will take a company a significant amount of effort to do all of them."
While Mr. Monego expects competition, he believes his company is well positioned to fend off attacks. "I don't know of anybody taking as broad a position," he says. "We can be attacked on any one side, but I don't think we can be attacked on all three."
A BUDDING STANDARD?
Other companies with audio players, such as Microsoft (Nasdaq: MSFT) and Realnetworks (Nasdaq: RNWK), are better funded and already have a considerable base of users. The problem for a high-profile company such as a Microsoft is that it is viewed as a "threat," so whatever overarching media manager it proposes would be unlikely to gain broad support, Mr. Bershatsky says.
Voquette, on the other hand, is viewed as "independent," allowing it to work with all of the competing parties, he adds. Moreover, anyone trying to match Voquette would face a technological barrier to entry. The kernel of the company's technology -- originally created by a group of Israeli entrepreneurs -- has been in development for three years. (Mr. Monego and a group of other investors bought a majority stake in the company Voquette grew out of -- Voquette Networks -- in May 1999.)
Ms. Maher figures Voquette has about a one-year lead over the competition. In that time, if it strikes lots of partnerships and gets its technology bundled into numerous products, it will be ahead of the game. "A lot of people will be walking around with these [Voquette-based] products, and other people will say, 'Wow, I need to get one of those,'" she says.
If it plays out that way, Mr. Monego will be singing all the way to the bank -- again.
Discuss MP3 trends in the ongoing MP3 forum, or visit the Discussions home page.
Related Stories
MP3.com's legal problems heated up in January.
The big record companies move onto the Internet -- cautiously -- with Artistdirect.
Listen.com also got big-label support.
Company Profiles
Voquette
MP3.com
Philips Electronics
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