Connections

Veritone has already started to integrate its business with Wazee Digital, the Denver provider of cloud-native video management and licensing services that enable rights holders to monetize and enrich their content, according to Veritone CEO and founder Chad Steelberg.

“We’ve actually been in collaboration with Wazee now for a significant period of time and have done some of the integration already and have joint sales efforts underway,” he said Aug. 20 on a conference call with analysts in which Veritone executives discussed the company’s recently announced acquisitions of Wazee and Binghamton, N.Y.-based podcast agency Performance Bridge Media (PBM).

“Furthering that integration” with Wazee, however, “will still take some time,” Steelberg said, adding: “We expect two quarters of some fairly heavy lifting.”

Veritone signed an agreement to buy Wazee for $15 million, including $7.5 million in cash and $7.5 million in Veritone common stock, and signed an agreement to buy PBM for $6 million, plus a contingent earn-out of up to $5 million based on PBM’s revenue for calendar year 2018, with such consideration being payable mainly in Veritone common stock, Veritone said Aug. 13.

Wazee and PBM took in combined revenue of $23 million in 2017, Steelberg told analysts Aug. 20, noting each company “adds an important component to our two businesses.”

He again pointed out that Veritone’s made up of two businesses: the aiWARE artificial intelligence (AI) operating system that is provided to customers – for now — in the media and entertainment (M&E), legal/compliance and government markets as a Software-as-a-Service (SaaS), and the Veritone One media agency, “a profitable, growing business” that he said uses aiWARE to help companies “target ads and maximize their return on advertising spend by reaching more of their potential customers.”

Looking ahead, “we see great opportunities” for Veritone’s aiWARE technology in “a wide range of markets, including healthcare, energy, cybersecurity and education,” he noted.

The M&E business is “segmented into four functions: creating, distributing, monetizing and analyzing content,” he went on to tell analysts. “Today, Veritone’s M&E applications are used exclusively in the analysis function.”

However, he said: “Wazee Digital has developed two industry-leading SaaS-based applications.” The first, called Core, “serves the creation and distribution functions,” while its Digital Media Hub (BMH) application and Licensing operations “serves the distribution and monetization functions,” he explained.

Via Veritone’s acquisition of Wazee, “we will offer M&E companies a unique service platform addressing all of these key functions, from creation to analysis, and we will integrate the power of cognition into each of these functions,” he said, adding: “Our cognitive capabilities will enhance the effectiveness and efficiency of M&E companies in their creation and distribution functions and will unlock valuable content that was previously overlooked because of the manual effort required to identify it.”

Veritone will introduce Wazee to aiWARE customers, present aiWARE to Wazee customers and “we will pursue new opportunities with our combined offering, especially through channel partners,” he pointed out.

Wazee has about 55 employees and its customers include Bloomberg, HBO and Viacom, he said. Although most of Wazee’s customers are in the M&E space, “we also see opportunities to expand their business into other verticals, especially government,” he told analysts.

PBM, which has 32 employees, has built a “leading position” in the podcast space, he noted. “While the podcast market is smaller than the TV and radio markets, it is growing at a fantastic rate while those other markets have experienced slow to flat growth,” he said.

The merged company will have “increased purchasing leverage, which will benefit our clients,” he noted, adding: “By integrating aiWARE into the expanded Veritone One, we expect to secure more clients and drive higher average client spend.”

Veritone, meanwhile, is “continuing to evaluate other M&A opportunities,” he told analysts, echoing a comment made by Mike Morper, Veritone VP of product marketing, Aug. 13. “We will continue to evaluate acquisition opportunities and invest in organizations that we feel can help us further accelerate our business objectives,” Morper had told the Media & Entertainment Services Alliance (MESA).

The PBM purchase is expected to be completed before the Wazee acquisition, Veritone CFO Pete Collins said Aug. 20. Noting that the planned acquisitions were subject to customary closing conditions, Veritone said earlier that it expected to close the PBM purchase “in the next several days” and the Wazee deal by Aug. 31.

In the Aug. 20 update call, Steelberg also explained his wider vision of how Veritone plans to use its AI technology, telling analysts: “The home run opportunity … isn’t so much in augmenting the humans. It’s in the ability for the artificial intelligence to really … take a first-order seat in terms of compiling, analyzing and delivering content on a one-to-one, on-demand basis. As we move through Alexa and other things to now on-demand content, long-form repositories created by historical large companies [are] not properly set up for that form of consumption and distribution. And our intent is to create tools and solutions that aiWARE already has and integrate those with Wazee for a far more automated on-demand marketplace in the future.”