VideoBlocks, Reston’s subscription-based provider of royalty-free stock video and images, is expanding into audio. Today the company is publicly launching AudioBlocks.com, offering an initial catalog of over 100,000 music tracks, loops and sound effects. Where competitors offer these services on a pay-per-download basis, VideoBlocks has separated itself and lowered the cost to the consumer by providing unlimited downloads with an annual subscription. We chatted with CEO Joel Holland this week about the company’s growth the potential for the audio expansion.
VideoBlocks was started by Holland when he was a D.C.-area teenager filming local landmarks and settings and selling the CDs on eBay. He ran the company through college and in 2008, facing the economic downturn, had a choice – accept the investment banking job he was offered “somehow,” or continue to build the company he started. Eventually, Holland said “enough people told me moving into my parents’ basement and focusing full time on VideoBlocks was crazy that I decided to do it.” In the first year, the company hired its first employee and brought in $1 million in revenue. In the second year, he doubled revenue to $2 million and employees to two – not a bad ratio.
In 2012 VideoBlocks and Holland entered a “growing up period” and sought out investment and guidance. They found local partners in firms, QED Investors and Updata Partners, with Updata leading a $10.5 million Series A round. Holland noted that Updata’s expertise with subscription based models and the customer service and data experience provided by Nigel Morris (Capital One co-founder) and QED made them ideal investors. When asked if investor proximity was a factor Holland confirmed, stating that the ability to meet face-to-face with partners has proved very helpful.
With $13 million in revenue in 2013, more than 30 million downloads and a team of 30 employees, VideoBlocks has continued to grow. Audio is the logical next step, and if that area of the business takes off, Holland expects to hire engineering, content and sales talent to focus on the development. For now, they have been able to launch the product with the existing team and invested an initial $1 million to acquire content. “I can’t say right now how this will increase revenue, but it opens us up to a larger consumer audience and is a massive opportunity,” Holland said. He added that as a company they expect strong double-digit percentage growth this year.
One challenge we discussed was reaching that new audience with the audio offering. Traditionally, VideoBlock costumers are individual producers, hobbyists and small creative studios. Since audio enhances the video and photos that everyday people create, the potential is much larger (and harder to convert). To tackle this, Holland said they will launch an app this fall that will let users add their photos and videos and pair them with songs from the AudioBlocks library.
