Will Laughly Be the Force that Finally Breaks the Comedy Streaming Barrier?

Laughly is a fairly new streaming app, that promises to change the way you listen to comedy. Offering streaming channels playing comedy 24/7, plus an upgraded pay experience that adds thousands of specials and albums available to stream on demand, the ability to download albums, plus original programming and live streamed events, Laughly promises to change the way comedy is heard.

In April, Laughly made a big impression in Austin, Texas at the Moontower Comedy Festivals as a top-line sponsor, giving out swag, free subscriptions and even streaming live shows for those who couldn’t make the trek to Austin.

They have a lot to offer, but Laughly is by no means the first to offer streaming comedy in a manner similar to the way radio has traditionally offered music. SiriusXM has multiple channels that stream comedy 24/7, Audible offers many ways to listen to comedy channels, and then there’s Pandora and Spotify too. Each of those outlets has their own unique spin on how to hear comedy through your mobile device, and each has their own fans, but none of them has revolutionized the way people hear comedy. Will Laughly be the company that changes everything?

We spoke to CEO Dave Scott about what motivated him to create Laughly and how he plans to make Laughly stand out from the other platforms. I sat down with Dave Scott in the bar at the historic Driskill hotel in Austin and he shared his history, his plans and his hopes for the company.

Scott is an Ivy League graduate who graduated from the Wharton School of business with a background in tech. And it’s not his first time helming an ambitious start up company- he’s what you might call a serial entrepreneur. Laughly is, however, his first foray into the business of comedy, unless you count a brief period where Scott performed stand up himself while living in New York. “The whole company was born from the fact that I did stand up,” he told me. Even though he only performed for about a year, Scott told me he got to open for some of the greats- , and Nick Di Paolo for example. “I had a one-year hiatus and my friend who’s a comedian said, “you should write some jokes for me. Like I lost a bet, so I had to write a couple jokes for him. In the Ivy League fashion, I took a class in joke writing at Gotham Writer’s Workshop which is the wrong way probably to do it, but in my Ivy League mind, that’s what I had to do.”

Performing for a year taught him a lot about comedy and what resonates with audiences. He also learned how surprisingly unavailable comedy is to the average person. “If you think about music, for example, or comedy, people used to buy comedy albums 30 years ago. You’d go into Tower Records, and you’d buy Cheech & Chong Up in Smoke, George Carlin, what have you, and it’s accessible, 100% of all comedy was available to you at any given time and consume it. And then what happened was, people stopped buying albums, they started buying downloaded albums, then people stopped downloading albums and they started streaming, and guys like Pandora and Spotify came around for music, and no one picked up the memo for comedy. The distribution mechanism for comedians died,” he said. “Every single day, I can walk in and turn on a radio station, and Jay-Z or Rihanna is in my ear, and that’s exposure. There’s nothing like that for comedy, and that was the thing that really shocked me.”

And that is exactly where Laughly comes in. Scott believes that the lack of discovery and curation and distribution in comedy is a problem that he can solve. “Back when I was doing comedy, I wanted to go back through all the old Richard Pryor, and really study him, go back through all the old and really study him, and you can’t do that, you couldn’t have done that. In fact, we actually calculated that less than 10% of the back catalog existed. I said, there ought to be an opportunity for me to be able to get comedy on demand.” He created Laughly to go beyond the limitations of streaming platforms like SiriusXM or Spotify or Pandora.

To get what he wanted, he knew he would have to build an app from the ground up. His team did a survey and discovered that 85% of the people they spoke to only knew one or two comics. “They’ll know an , and they’ll go listen to her specials, and then they’re done. They would have loved it, they may have loved , they may have loved it when they’re consuming it, but then they’re done. No one’s ever said, ‘well hold on, what about a Jen Kirkman, what about a Whitney Cummings, what about Iliza Shlesinger?’ That technology or that tool doesn’t exist to keep someone in, like music has that ability to keep someone in the genre of music.”

Of course, his first challenge was acquiring content. Comedians are notoriously skeptical and untrusting particularly when it comes to their content, and going directly to the record labels was equally problematic. “I was like, ‘Gosh, I’ve got no idea how to even start with this,'” Scott said.

“I actually set up meetings with like Warner Music Group and Sony and some of the big labels. We said, ‘you don’t know me, I have no reason to be here.'” Scott describes his early conversations with the labels as hilarious. “We went into these offices and said, ‘Listen, you have no reason to license us any of this stuff. What we want is your , , your Bob Newhart. If we can get your old stuff, we want to create an app which celebrates that stuff.'”  The reaction he said was universal. “Their jaws dropped, and they said, ‘do you know what? No one’s ever asked us for those licenses before.'”  Scott said that they were grateful and happy because they knew they owned valuable content, but didn’t know what to do with it. “They couldn’t give it to Pandora or Spotify to save their life.”

And unlike the music business where a few companies own 95% of all licenses, Scott said those big labels only own about 15 to 20% of comedy licenses. Everything else is split up among a long list of independent labels. “A Special Thing Records, 800-Pound Gorillas, Uproar, Comedy.com, Rooftop, and they’re all little mom and pop shops that do it because they don’t make any money because they’re passionate. We went to them, and we sold them the dream.” And then there’s an amazing amount of comedians out there that actually self-publish and have a comedy album that they paid for on their own, and they’re sitting on their material. “They don’t know what to do with that either, and so we knew right off the gate that we needed to deal with the comedians directly.”

Ultimately, Scott said, he wants everyone to make money. “My whole thing was that, you know I did it for a year, I was considered a paid comedian, the most I got paid was free beer, maybe $25 bucks under the table on the door. I know that if you’re really trying to do this for real and you weren’t me, who just sold a company for a bazillion dollars, you probably have a hard time. I thought, ‘How cool would it be…'”

Content acquisition is only part of the equation. The company has been hard at work creating, and improving their search algorithms because Scott knows that the ability to serve up the right content will be key to the company’s success. Scott credits a small but amazing team of developers- via impressive places like MIT, Cornell, and Columbia with building the right algorithm specific to comedy. “One of our secret sauces is that we transcribe every single speech to text, so we can analyze it for meaning. It’s really easy to get about 60 to 70% accurate, it’s the last 20 to 30% that’s hard. I can’t tell you what we do, but we have a way to make that last mile very very effective, that’s the trick.” Scott’s team analyzes the subject matter of their content and creates tags based on the type of the joke and the approach to the joke. It’s not enough to just be able to group every joke about sports- because that’s not how people listen to comedy. If you like a joke about baseball, it doesn’t mean you suddenly want to hear from every comic who has ever talked about baseball. And they had to solve the Andy Kindler Problem.  “What was happening was that Andy Kindler is such a universal comedian, he would show up in everybody’s feed. We’ve now fixed the Andy Kindler problem, and he now comes up appropriately, but that was sort of a hallmark milestone that we knew that the algorithm was working well,” he explained.

Beyond the algorithm, some of the other challenges Laughly faces is the freshness component- because a lot of material ages out, and dealing with representation. “Managers. I mean, if you could unlock the codex to managers and agents…If it wasn’t for them, we’d have a great business.”

But the number one problem the company faces is how to get a critical mass of people used to using the app. It’s not that it’s difficult to learn- on the contrary, it’s pretty simple to use. But how to get people in the habit of opening and using the app- is the real challenge. “You know, awareness and acquisition is always going to be the hardest part of this game, but what we try to do is once you know the product’s out there and you start it, we try to make it as easy as possible for you to get going.” Whether Laughly will be able to solve this problem will be a key factor in the company’s future.

Part of the lure involves offering user friendly features not offered elsewhere. Some of Laughly’s more forward thinking features include a self-service upload portal for any comedian to upload their material and split revenues 50/50; “Me Radio” that asks you which one or two comedians you’re big fans of, and learns overtime to create the perfect radio station for you;  the ability to stream and even download a large archive of comedy albums; original programming; and even live streams providing you the chance to virtually attend comedy festivals on the other side of the country. Live streaming has limitations- mostly because comedians don’t want to share their performances before they are ready to put out a recorded special- but Scott believes that the live stream is just a way of making the venue a little bit bigger, and the company has protections they can put in place to minimize the risk that the content will be recorded, stored, or misused.

These features will run you $3.99 a month, or just $1.99 a month if you pay for a year ahead of time and Scott says the discounted deal has a lot of takers, so far.

As far as Dave Scott’s future plans, I asked him whether Laughly is just another company to buy and sell like his last two businesses– or someplace he plans to settle in to.  He says he is in this to stay. “Well, you know I mean, a good entrepreneur doesn’t build the business to sell it, they’re going to build the business to be a business,” he said. “That’s what I’m doing. I’m just like super excited about just sort of figuring out how to serve this underrepresented population.

Visit laughradio.com for more info and download Laughly on iTunes and Google Play.

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