A Video Conversation with David Tohn, CEO of BTS Software Solutions and Verb8tm - Part II

3/1/16

David Tohn

Click here for Part I

Bringing innovative software solutions from the battlefield to the commercial world

David Tohn is the CEO of BTS Software Solutions, as well as its subsidiary Verb8tm, a captioning and transcription company. BTS Software Solutions provides application, systems, and web development services to government and commercial clients such as the U.S. Army, the Department of Defense, CACI, and Towson University. Verb8tm, whose clients include the University of Maryland and NPR, offers a comprehensive suite of speech-to-text products at the cutting edge of audio and video technology. A 24-year Army veteran who was deployed into combat six times, David brings a unique perspective and proven leadership ability to his positions at both companies. Last December, Under Armour and Baltimore SmartCEO magazine bestowed him with the Game Changer Award at SmartCEO’s 2015 Circle of Excellence Awards. Under his leadership, BTS has earned numerous company-wide honors, such as the Chesapeake Regional Tech Council’s Innovator Award and SmartCEO’s Circle of Excellence Award for Small Technology Business, GOVStar Award for Star Workplace for Emerging Business, and Cornerstone Award for Howard County Small Business.


Q. Tell us how Verb8tm got started.

DAVID TOHN: Verb8tm is the product of four years of research and development, and about $1.75 million of R&D, mostly funded through grants or services in-kind. It started in 2009 as an initiative between National Public Radio Labs and Towson University’s Research Psychology Lab in the College of Liberal Arts. Dr. Ellyn Sheffield was the lead researcher there working with Mike Starling, the CTO of NPR Labs. They started to solve a very specific problem: How do you make talk radio accessible to the 23 million deaf and hard of hearing Americans in the U.S.? For two purposes: one, so they maintain access to information—and talk radio is a significant source of information—but also from a public safety perspective, radio is the medium of last resort in an emergency, and so if emergency information is being broadcast—think Hurricane Sandy where the telephone networks were collapsed and information went out through radio—so by providing live captions to talk radio, you’d be able to provide the public service to deaf and hard of hearing. That was the original mission.

By working with National Public Radio, the solution had to do a couple of things: one, it had to be highly accurate and very timely because of the emergency component to it. And frankly, it had to be inexpensive, because NPR does not have a lot of resources to develop and then provide these services. What came out of that joint project was a technology originally called Towson University Captioning Solution, which started during the live transcripts for NPR’s talk radio. If you went on their website today, every transcript you see on NPR’s website is us.

One of our divisions, our Commercial Solutions Division in BTS Software Solutions, was doing the software development in support of the speech-to-text capability. We looked at that, and we looked at the technology, and we looked at the market. At that point Towson University was doing about a $250,000 with the work commercially out of the lab in the College of Liberal Arts, and started to bump up pretty hard against the ability to run a commercial service inside a state university. We had great conversations with Dr. Sheffield, Dean Terry Cooney of the College of Liberal Arts, and Tim Chandler—the then acting President of Towson University—and we realized it was best for everybody if we could pull it out, put it in a commercial space where we could continue to serve our mission of deaf and hard of hearing, but really start to grow the company into what its potential was. We started that conversation in January of 2014, and then we completed the transfer in December 2014, and it became a separate business unit within its parent company, BTS Software Solutions.

Q. How big is the industry, and where do you see the company’s next opportunities?

A. The speech-to-text industry writ large is $16 billion or more. Frankly, we can’t scope it because there are so many use cases that are not using it right now. What Verb8tm offers is a faster, better, less expensive, more scalable solution for multiple-speaker audio. We wanted to zero in on the sectors that we really understand and, frankly, already have deep hooks in: the education market and the broadcast media market, specifically radio, but also some post-production video and audio content.

In the education market, both academic and professional, and then in conferences, we are targeting and providing live captioning in the classroom for deaf and hard of hearing students. It just shows up on their mobile device, within 3 seconds at 95% accuracy or better. We do that right now at Towson University for students there, as well as providing captioning and transcripts for online and distance learning. [We also provide captioning] after a live classroom, so wouldn’t it be great when you finish a class, here’s a transcript of everything the professor said so you could study for finals and have that data available forward. We saw a huge market in that. As an example, it cost Towson University $40,000 a year to provide accessibility services to a single deaf or hard of hearing student, at 15 credit hours per semester. That’s in the form of either a stenographer, who’s in class, or a sign language interpreter. We’re able to provide the same service at about $22,000 a year, and are scalable.

In the professional market, we are working with the legal community and continuing education. We work with two states right now, Massachusetts and Illinois, and we’re targeting additional ones in our market growth. We work with the University of Maryland Dentistry Lab, also doing continued education support for transcripts and captions there. We see growing in that space. Both the academic and professional training markets are huge—$56 billion professional. We see the market for accessibility alone somewhere around $2 billion, if you look nationally at the higher ed space.

On the media side, again, we have deep hooks in there. We’re doing all of National Public Radio. We do Latino USA. We have one of our channels in Sunday streams, which has 250 churches and synagogues that we provide support to the streaming of their services. We’ve already done the Jewish High Holy Days here in Baltimore for one of the temples, providing captioning and transcripts for that, and we see plugging into that space. While there’s a broad media market for it, we really want to target the top radio space, which is really underserved right now. Ten thousand hours of original talk content a quarter—so three thousand a month—that once it’s broadcast, disappears. No one ever goes back and listens to an hour of a radio show no matter how much they love it nor can they find it because it’s not searchable for Google or Yahoo or such. But if you do a high quality transcript of it, it becomes searchable, becomes discoverable. We found in our control studies that you will see a 13.5% increase in web traffic just by putting a captioning and transcript associated with a video. For search ranking, Discovery Digital and This American Life are two studies, where they went from not ranked to number 9 or number 11 in Yahoo and Bing in two weeks. So, we see a high ROI on the e-commerce associated with just making the audio and video content searchable and discoverable. That’s our interest there.

More importantly, by driving the costs and the ability to scale to the volume of “How many conferences have you been to in the last year?” Multiply that: there’s 500,000 conferences nationally, annually, as an average. By lowering our costs and making it so accessible and scalable, we’re unlocking new markets that open up revenue streams for every conference provider. We do up-charge your attendees to have a transcript after each session that’s tied back to the video—I click on a word, I see the slides, and see the video associated with it. I get transcripts from every seminar I didn’t make because of scheduling issues. I can have transcripts tied to video from my people who couldn’t make the conference, but I can still have access to that. These are all areas where by driving the costs down and being able to scale, we’re unlocking markets and generating new revenue opportunities for the content owners.

Connect with David on LinkedIn

Founded in 1969, KatzAbosch is one of the largest CPA and business consulting services in the Mid-Atlantic region. Our mission is to provide the highest quality accounting, tax, financial and management consulting services to our clients. We understand the needs and challenges of our clients and we have made it our obligation to create, grow and protect asset value. The experts at KatzAbosch offer a full service solution while maintaining a tradition of ethics and incorporating the latest technology and unique business practices. Excellence in an industry often begins with how those closest to the company—its clients and employees—feel about it. For these individuals, KatzAbosch is a place where people and businesses excel and prosper. Our advisors can meet all of your service needs including; Audit & Accounting, Business Valuation & Litigation Support, Consulting, Estate Planning & Administration, Financial Institution Services, Forensic Accounting & Fraud Examinations, State and Local Tax (SALT), Taxes & Planning.

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