US start-up Spot It Out emerged from stealth mode this week to offer branded content to location-aware mobile devices. The company was founded six months ago by three veterans of the GPS market: George Filley (formerly at NAVTEQ), Andreas Hecht (NAVTEQ, NAVIGON and Rand McNally) and Kiyoshi Hamai (Tele Atlas, Mio and Rand McNally).
Self-described as being in the “location-based publishing business”, Spot It Out mission is to help media companies (such as TV Network, magazine, websites and book publishers) to distribute location-based branded content to Personal Navigation Devices, Smartphones and Netbooks.
“Conceptually, what we saw from our experience is that the more vertical you go, the more value you offer to consumers, but as a PND manufacturer it is difficult to go vertical because you need volume”, explained Kiyoshi Hamai in a phone interview.
“So the question was always: how do we make these devices more personalized? Our answer is in providing relevant content. The other thing we learned in our past experiences, is that consumers are very brand oriented. You can offer them 5, 10 or even 15 million POIs, if they don’t trust them as they do with brands they will not use them and they will not pay a premium to get them“, he said.
Hamai also notices the difficulties faced by brands to enter the LBS marketplace. “At the other end of the spectrum there is a challenge for the content providers, because for many reasons they don’t have means to participate in that mobile market. Entering the market means a new venture, new risk involved. But first and foremost the biggest challenge is the complexity of the LBS value chain.”
Hamai and his partners believe there was a real need for somebody coming with the publishing model to find avenues for content distribution to PNDs, mobile phones, netbooks and beyond.
Agreements with Garmin, Zagat and GolfDigest
As a first step in this venture, Spot It Out has signed an agreement with Garmin on the device side and Zagat, GolfDigest (Condé Nast) on the content side. The first product announcements will be made in the coming weeks; even if Spot It Out is keeping these under wrap, we can expect a Zagat and a Golf Guide for Garmin Nuvi users in a $15 to $30 price range.
Historically PND manufacturers have always been very short on the content side and price pressure on the market made them reluctant to spend money on it without seeing a clear return on investment. To their defense many content providers were not willing to play the game too, demanding huge license fees for their content without willing to understand the specifics of this market.
Spot It Out success will rely on chasing the long tail of branded content and developing retail and online distribution to reach owners of location-aware devices. Spot It Out has a card to play on the PND market; however, the smartphone market seems already crowded by branded apps and on the netbook side one could wonder if there is a real appetite to consume branded, premium location-based content.
