Geo Week News

July 17, 2012

Autodesk buys Socialcam: What? Why?

I remember not long ago my wife and I were sitting in our respective spots in the living room checking our respective Facebook feeds (we’re romantic like that), when she turned to me and asked, “These Socialcam posts – those are spam, right?” Well, not only are they not spam, Autodesk thinks those posts, and the video-sharing app and web site behind them, are worth $60 million. 

They announced the pending acquisition this morning, providing this basic explanation:

“Mobile computing, the cloud and social media are improving and changing the way people design, engineer and create projects,” said Samir Hanna, vice president, Autodesk Consumer Group. “Video is an ideal medium for professionals and consumers alike to communicate and share their design ideas. We are excited to have Socialcam join our growing portfolio of applications, services and communities for digital art, personal design and fabrication, home design and entertainment.”

Oh, and this, too:

“Socialcam shares Autodesk’s mission of helping everybody imagine, design and create a better world,” said Michael Seibel, Founder and CEO, Socialcam. “Autodesk has a proven track record of acquiring and scaling fast-growing, early stage consumer businesses while staying true to their core audience and vision. With products like Pixlr, SketchBook and 123D, Autodesk is empowering creativity in millions around the world by making their award-winning technology accessible to everybody. We’re excited to join them and introduce this global community to simple video creation, editing and sharing.”

I mean, yes, that’s the Socialcam CEO “talking,” but Autodesk obviously wrote that quote and put it in his mouth, so we can assume that’s a continuation of their rationale.

They also make sure in the press release to make mention of the fact that “Customers across the manufacturing, architecture, building, construction, digital art and entertainment industries, including the last 17 Academy Award winners for Best Visual Effects, use Autodesk software, mobile apps, cloud services and communities to design, visualize, simulate and communicate their ideas.”

So, you can look at the Socialcam buy this way if you want:

1. Pixlr, SketchBook, and 123D are all essentially gateway drugs for Autodesk’s more robust design software. If folks get hooked on these intro-level design applications, they’re more likely to be Autodesk fans when they go to make their first significant software buy. You can hear an Autodesk exec talk about how their consumer products stimulate their professional products here.

2. Socialcam, since you can apply filters, add titles, and add soundtracks to video taken on your phone, is like a gateway drug for Autodesk’s more robust video editing software like Smoke

3. Therefore, they bought Socialcam for the same reason they bought Pixlr.

That could very well be. But I don’t think so. 

First, you need to understand how Socialcam works. Essentially, when you sign up for an account, you log in through your Facebook account and then can start “following” the Facebook friends you already have (and anyone else that happens to be on Socialcam). If they post a video, you get an alert, and then you can go and watch it if you’d like. 

They also, however, present you with a list of “Featured Users” to help get you started. These include real people, like, well, Omar Salazar, a professional skateboarder. But mostly they’re companies, like Lionsgate films (makes sense), the New York Jets (okay), and Meow Mix (huh?). 

Actually, that last one makes sense since some huge percentage of internet traffic is driven by people watching cat videos. 

But that’s unlikely why they’ve bubbled to the “featured” top. I’m assuming most of the companies on the featured list, including Sierra Mist, and GM, and Axe Body Spray are there because they pay to be there. There certainly isn’t any advertising or cost for use that would otherwise generate revenue and justify a $60 million investment. You download the app for free and it doesn’t cost anything to post videos (for which you’re provided unlimited cloud storage, much like YouTube). 

A lot of people have likened this buy to that of Facebook buying Instagram for $1 billion. And I can see that. Instagram is for sharing filtered photos in quick and easy fashion. Socialcam is for sharing filtered videos in quick and easy fashion. And compared to Facebook’s billion-dollar-buy, Socialcam looks cheap, right? 

Well, at the time of the buy, Instagram had 30 million users. Socialcam has had a reported 16 million downloads of its app. Still looks cheap. 

But if you’re into social media, that’s where the similarities end. I’ve got 1000+ Facebook friends. I see Instagram photos in the feed just about every single minute of every single hour. People love it. It’s about as quick and easy as quick and easy things get. 

Video is different. Even with compression and bandwidth as impressive as they are, it’s still much more time consuming. When you’re taking video with your phone, you’re not going to sit there and watch the thing upload for 15 minutes (or what seems like that long). You’re moving on to something else. The photo uploads in 15 seconds. 

I just checked my Socialcam feed. The last of my Facebook friends who uploaded via Socialcam did it 28 days ago. No one ever actually uses it for upload. 

So, who’s doing all the uploading? Those featured brands. Axe Body Spray posts crazy crap all the time. So does Oprah’s network. And the Mohegan Sun Casino. Check out the page for the popular videos. It’s a marketing director’s dream come true. Why pay for TV commercials when you can post videos on Socialcam and people will watch them for enjoyment?

So, assuming this isn’t a passing fad, what Autodesk has just done is bought a company that is a marketing director’s dream come true, tying itself intimately to a bunch of huge brands, who likely have large internal design departments or at least close relationships with agencies that have large internal design departments. And if Autodesk leverages the platform correctly, they’ll be able to pump more of their high-end software into those design departments. 

Plus, as everyone signs up for Socialcam, they’ll be presented with the Autodesk brand and it will serve the same purpose as a gateway drug, as illustrated above. Best of both worlds. 

And, sure, maybe some commercial designers will use Socialcam to exchange ideas with other commercial designers. But probably not. 

Is that worth $60 million? If people continue watching ads in disguise from the likes of Sierra Mist and Meow Mix as a form of entertainment, it just might be.

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