Serato: the biggest Kiwi tech company you’ve never heard of

As the industry standard for the world’s most famous DJs, and with a two million-strong user-base, Kiwi DJ-tech company Serato should, by rights, be a household name. But it’s not.

“No, we don’t really toot our own horn that much,” says AJ Bertenshaw, who, along with Steve West, co-founded Serato Audio Research in 1998. “New Zealanders don’t really do that and we’re very much a New Zealand company.”

If anyone does deserve tooting rights however, it’s Serato.

For the last sixteen years the company has been at the forefront of DJ culture and technology. Their ground breaking Pitch ‘n Time time-stretching algorithm and flagship audio mixing software product Serato DJ are industry standards. Kanye West rapped about them on one of his tracks. Eminem did the same. So have a lot of people.

Today they’re releasing their first mass-consumer app, Serato Pyroa music player that beat-matches and mixes song playlists, so Idealog sat down with Bertenshaw to find out just how New Zealand’s least known successful tech company got so famous.

Idealog: Hi, AJ. Congratulations on the new app, Pyro. How long has it been in development? 

Bertenshaw: Development started in January last year, but the actual work was probably more around June. 

Idealog: So give us the pitch. What does Pryo do?

Bertenshaw: The purpose of the app is to have your music play back-to-back, seamlessly and never skipping a beat. The first concept of this design was to have it playing the music for you at parties. In fact we’ve been referring to it as Houseparty, because it’s an app for continuous listening, but there are a lot of applications there.

So yes, it mixes songs, but it keeps the music playing and it keeps it fresh. It’s designed as a cue, so no matter what, it always keeps going. When the cue runs out, it starts figuring out from what you have played recently, and what other songs might go with that. So the idea is that the music never stops until you stop it.

Image: AJ Bertenshaw, CEO & Founder at Serato

The idea for the app came out of a frustration. Whenever my wife and I have friends over for a party, she always asks me to do a playlist, so the music won’t stop. That’s one of my jobs. But as soon as people start turning up, you think ‘oh, I want to play that song, I want to play that song.’ But if you want to hear a song that isn’t on the playlist, you have to back out of that playlist, play the song, then the music stops. Then you go back into the playlist and the player has forgotten what you’ve played.

Idealog: What's unique about the tech here?

Bertenshaw: Our two flagship products [Pitch ‘n Time, Scratch Live] are what makes it possible to do what we’re doing here. These days you can’t survive as a piece of DJ software unless you have a feature called ‘sync’: In order to push a button and have two songs line up, you need to have an algorithm which will analyse the music, find all the beats, figure out from those beats where the bars are and how to line them up. You can see that when you skip around in Pyro. You can skip anywhere in a song and it’s completely seamless. It lines up the bars whether you’re jumping forward or back. You can’t even hear, most of the time, the jump.

Idealog: I did try it and it couldn’t hear the jump at all. It was kind of amazing. So why has no-one in New Zealand ever heard of Serato?

New Zealand is kind of a small market for the studio stuff we’ve done in the past and also for the DJ stuff, so, right from the start we’ve been international and our primary market has been the United States. Our products are even priced in US dollars. In the beginning we didn’t really do any marketing at all and where we actually became popular happened quite organically. Now we’ve got a great marketing company and we spend money, but we’ve never done New Zealand-specific marketing.

Idealog: Is the low-key approach also because you've never had a mass market product before?

Bertenshaw: Well, we’re a product-centric company. We are focused on making the best product we can, so we like to have a light touch on the marketing. We’ve never paid an artist to use our product. Steve and I decided at the very beginning that we didn't want someone to use it because they’re being paid. People find that a bit hard to believe. 

Idealog: So in regards to the marketing that you do do, where are those dollars spent?

Bertenshaw: There are some DJ blogs out there which will get a lot of readership, and we’ll put ads on those. We’ll do internet advertising in general. We’ll do a lot of artist relationship stuff. We’ll do educational videos, we attend trade shows. Instead of saying ‘this is the best product in the world’, we just show people using it.

Idealog: So now that you’re launching an app for the general consumer, what’s different? How do you approach the launch of something aimed at the everyman?

Bertenshaw: Yeah, this is our first consumer product, so we do have to approach things a little differently. That means being a little more marketing-heavy and more mainstream. Instead of top DJs, we’re looking at celebrities, trying to figure out who to approach for our advertising material. We want to get someone mega-famous for that. Maybe some more Apple-style promotional video.

We patented the first thing we ever did and the experience basically put us off patenting. If you’re not the sort who wants to go around suing people, having a bunch of patents doesn’t give you much.

Idealog: Serato launched Pitch ‘n Time all the way back in 1997. When it comes to audio tech, that’s a lifetime. How have those industries – audio production and the DJ scene ­– changed since you started out?

Bertenshaw: Well when we started, we started out in the audio plugins market. Back then, there was a thriving third-party world, but now it’s really tough. All the platform guys, like Pro Tools, provide hundreds of free plugins [bundled with the platform], so making money in that area is hard. We got out of there just in time.

When we entered the DJ market that was different too. Turntables were on the way out, vinyl was getting hard to get – the invention of the CDJ had started transitioning people away from vinyl. When we came along people were moving toward CDs because they were lighter. What we enabled people to do was carry two records and a laptop and a small box in a backpack and have a selection of all the music they could want. That completely changed the way people made music.

Idealog: So what IP are you guys trading on here?

Bertenshaw: So we patented the first thing we ever did – the Pitch ‘n Time algorithm, a few years ago and the experience of patenting an algorithm basically put us off patenting. What we realised was that patents were all very well and good, but all they are is a licence to sue. If you’re not the sort who wants to go around suing people, having a bunch of patents doesn’t give you much.

We say ‘let’s still invent stuff, but let’s just be first to market and best of breed’. Instead of spending $100,000 on a patent, let’s just market it really well and make it really well and let people speak with their wallets.

If you commercialise your algorithm or idea, no one else can patent it anyway.

Idealog: So has that philosophy paved the way for imitators?

Bertenshaw: Imitation is the sincerest form of flattery. For me it’s just a more Zen way of doing business. You’re not fighting over ideas all the time, you’re just getting on with it and making a good product.

Every now and then someone does something and it’s really close to your product and that feels a bit funny, but our philosophy is just be the best at we do. Being copied is inevitable, even if you get protection. They’ll always find a loophole or some variation of it that your patent doesn’t cover and then you’ve got to try and reissue the patent, and then it’s just a vortex of energy.

Maybe I’m overstating it, but it’s just not something I’m interested in.

Idealog: How much time do you spend on developing new ideas? Do you have multiple new projects on the go at any one time?

Bertenshaw: The thing about having a product that’s current is that it takes a lot of maintenance. Once you’ve got a few hundred thousand customers, there’s a huge demand for maintenance and additions to the software and features. We’ve got to stay current because we’ve got competitors, and to remain the best we have to keep updating our software, so a good half of our developers actually work on Serato DJ. Then we’ve got another two teams that work on Pyro, and we’ve got a new team that’s working on the next thing. A brand new secret thing.

Idealog: What can you tell be about your brand new secret thing?

Bertenshaw: I can tell you it’s still music-related and it’s not DJ or consumer.

Idealog: That will have to do then. So this is Serato’s first consumer app. How big do you think the market for something like this is?

Bertenshaw: It’s huge. Basically anyone who listens to music will enjoy this experience over a regular player. Playing music before you go out gets you in the mood, and this mixes all the music for you just as if you were in the club. It’s just a better experience.

We don’t make brand-new products very often, this is only the third time, and hopefully it’s going to change the game again, but this time for listeners.