Say you are a cameraman that just happened to catch a firefighter carrying out a child from a burning building? Or maybe you are an animator who likes creating five-minute family-friendly shorts. No matter how breathtaking the piece, it will be difficult to monetize, and certainly not in any ongoing basis. The video of the fireman will likely get a one-time payment from a local news affiliate. The animator will be lucky to get any more than some congratulatory praise and attention but no direct profits.
Maybe you have a Web site catering to a niche market but can’t invest a ton of money, but want to include rich media content relevant to your market. You certainly don’t have the money for video crews, an editor, and the Web design.
Sailing on the horizon, however, is the possibility for content creators and Web sites to join together via an intermediary to make money through Internet syndication. In the past year more than a handful of these companies, like BrightCove, which was founded by Jeremy Allaire, and Clip Syndicate, which is the brainchild of Sean Morgan who had been one of the founders of Screaming Media, vying to establish the concept of Internet syndication.
Why is this business model viable now when Internet video failed a few years back?
“What we have is three converging trends that are making video on the Internet possible now,” says Eric Elia, the VP of Content and Online Services. “The first is lower cost production tools so it’s possible to produce compelling content cheap. The second is the mass adoption of broadband. And the third is the willingness for on-demand content. All these have come together in the past year or so and the market of Internet video has started to take off.”
The business model for these startups is essentially the same.
For content owners, they simply upload their video to the syndicate site and fill out a form of descriptive categories and keywords. Web site publishers can search for video content through this large database. After selecting the videos they simply get a simple html code and place it on their site. The broadband video is then streamed and hosted by the Internet TV provider, so there’s no concern about bandwidth strength. Brightcove and ClipSyndicate boast that virtually any Web site will be able to added specific pieces of high quality video in a matter of a few hours.
Services are open to any Web site except for television broadcasters or sites with pornography.
Sean Morgan of Clip Syndicate, which already has over 60 affiliates including the Associated Press and PR Newswire, says that affiliates will be able to use the service for free and receive a small portion (around 5 percent) of the profits, or pay a fee and be allowed to put their own ads within videos. Content owners will receive roughly 50 percent of the net profit, or 30 percent of the gross, says Morgan.
Both Clip Syndicate and BrightCove are in beta test right now, with selected affiliates using the service. Both companies are concentrating on building their network of affiliates before trying to lure advertisers.
The current lack of advertisers and the concentration of luring enormous corporations into the affiliate program has some content owners and Web site publishers, who had previously been excited about this business model, concerned. They worry that these companies could become mere video databases for the larger, multimillion-dollar Web sites, which have internal sales teams and are likely to pay the extra fee an seek out their own advertisers, rather than the democratic business model that was first proposed, wherein ads, and their associated revenues, would already be in place.
“I don’t have time to spend looking for advertisers,” said one affiliate who preferred not to be identified. “The concept of clustering a group of like content together and then finding advertisers for that group is what made this concept exciting. Without that, it’s just another streaming video service provider.”
Morgan assured there was no cause for skepticism and that attracting advertisers will not be a problem. “Internet video is exploding right now and for advertisers to reach these very specific, targeted audiences is what they’ve always been looking for, so it’s an easy sell.”
With BrightCove and ClipSyndicate, among others, aiming to launch in Q3, it should be known fairly soon how much energy each company will invest into internal ad sales or whether they will opt to simply provide the video for a fee, thus putting the responsibility of ad revenue on the affiliates themselves. That will likely tell the story of whether this will truly be a new distribution avenue for content creators and publishers in all shapes and sizes, or simply a useful video search engine and hosting service for companies with dedicated sales staffs. If the former, some say this could be a revolutionary distribution model that could change the very way content creators approach their work, the final piece in the democratization of production. If the latter, well then, they say, more Web sites will have video clips but that is about the extent of the impact.
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