Online Video: Now in Syndication

A new video distribution model is emerging, one based on the syndication of content between producers and individual Web sites; be they blogs, commerce sites or special interest Web properties.

To support the marketplace for video, a number of platforms have cropped up to act as go-betweens in video content transactions. Brightcove was the first to come along, late last year. It will soon be followed by a firm called Mochila, whose offering launches this summer. A few others have launched overseas or remain in stealth mode in the U.S.

The models vary, but each of these players make their money on a blend of licensing fees and revenue sharing agreements on ads inserted into the stream.

From a marketer’s perspective, these platforms function as video ad networks, ones that also happen to traffic in content. Alternately, companies may be able to produce their own content and distribute it via the syndication platforms to whoever is interested.

Is it a promising model for advertisers? As usual when it comes to emerging platforms, the answer is “depends.” It depends on the company, and it depends on how the market develops.

Building Audience

Before they can persuade media buyers to get involved, the Brightcoves and Mochilas of the world must first demonstrate they can aggregate a powerful distribution network. That’s no small task, according to JupiterResearch Analyst Emily Riley, who notes the viewing habits of Internet users are far from established.

“The biggest issue is going to be who’s watching video and why. Right now, people are watching it because of the buzz, not because they’ve been trained to on a regular basis,” she notes. Until that changes, Riley says, it will be hard to predict inventory and small-time publishers will struggle to build the kind of reach video syndication platforms can then sell to marketers.

As a workable scenario for syndicated video, Riley offers the example of a “Nova” episode that appeals to both a certain type of specialized doctor and a high school biology class. The audiences are segmented. The syndication model could therefore succeed if the content is properly targeted.

The video syndication players also rely on the assumption consumers will eventually expect to find video online pretty much everywhere they go. That’s not yet proven. When they want video, most Internet users go to YouTube, iTunes, MSN Video or AtomFilms. They don’t surf to their favorite blog and hit refresh.

“Where’s the content you’re getting going to be, and why is that better than where it was?” said Riley. “If it’s on a well-known Web site already, it doesn’t necessarily have a home anywhere else.”

Good point. So who’s syndicating the content these players are trying to accumulate?

The Sites’ Perspective

Glam.com, a fashion and e-commerce portal that launched last fall, is still pondering its video strategy. The publisher carried limited video dispatches recently from Fashion Week in New York, and hopes to ramp up its video content in the coming months.

Samir Arora, chairman at Glam.com parent Glam Media, says there are many factors he’d have to analyze before signing on with a video syndication platform.

“The content that comes in: what it looks like, where it’s from, how much control I have. All these things are very important,” he said. “Once you assume there’s an intermediary… what will be the problems advertisers will have? What will be the problems that the licensees or owners of the content will have? What are the users going to think?”

When they do launch video services, sites like Glam.com will require both technical support and quality content that’s targeted to their audience. According to Jupiter’s Riley, “Web sites are definitely still in a situation where you need a service provider [to enable your video channel], unless you’re talking about a very media friendly site that’s wiling to invest in their own group within the company.”

The economics must also make sense. The CPMs media companies can command by taking part in a blind video ad network are typically much lower than what’s will be available through direct selling. Web sites will have to balance the revenue limits of the former against the infrastructure challenges of the latter.

The Platforms

Among the emergent video syndication companies, Brightcove has by far the highest profile. Founded by Jeremy Allaire, the company has already partnered with content creators like The New York Times, and Publicis digital media consultancy Denuo is an investor.

Mochila launched last week with several print media partners, including Working Mother and Hachette Filipacchi Media. Content owners store video in Mochila’s system and name its price. Once affiliates sign on, advertisers can associate themselves with the specific content, or place a buy with the whole network.

Mochila’s video offering will appear this summer, according to CEO Keith McAllister.

“We expect our online ad supported model to be a significant part of our business,” he said. “We think there are many content publishers who are enthusiastic about the notion of acquiring high quality content while at the same time making money from advertising. What surprised us was the number of larger publishers who were also interested in that model.”

A dark horse is The Fifth Network, which now operates a small video ad network but says it will soon launch a media player that Web site owners can use to carry its syndicated content and ads.

“Throughout the player will exist creative from the site it’s on, as well as like content from other sites in our network and our other publisher partners,” said Bradley Werner, VP of marketing at The Fifth Network. “A lot of sites want to provide more reach. They know their users are interested in like content. We’re making sure all our publishers meet steady quality criteria for their content.”

Ad Networks: Seen One, Seen ‘Em All

The upsides and downsides of advertising with these companies are similar to those of all ad networks. In the “pros” column, you have reach. In the “cons” you have a loss of control. That is, unless you’re willing to place your buy on a site-by-site basis.

Several media buyers ClickZ spoke with see the inherent logic of the syndication model for video content and advertising. However, they’re also uncomfortable with having their video ad buys mediated.

“We met with Brightcove and saw their offering,” said Mike Deturris, emerging media supervisor at Ford Motor Media. “I think it makes a lot of sense for some advertisers. But unless the content was the perfect fit, I don’t think we’d do that.”

“Unless it’s for a specific initiative, we wouldn’t necessarily [advertise there],” said Myra Lanting, an account supervisor at Beyond Interactive. “You always want to make sure you’re completely aware of the content you’re running in.”

Mochila’s CEO said the company will provide the appropriate level of control for all parties: the content creator, the affiliate network and the advertiser. He said each of these players can fix myriad preferences within its system. For the seller, this means setting limits on where one’s content can appear. For the buyer, it means subscribing to or filtering out specific types of content. For the advertiser, it means choosing the type of content your :15 or :30 spot will run against.

But how much time and energy will advertisers need to put in to get their ideal contextual video placement, and how many video impressions will be available for purchase once all those knobs and dials are set?

The alternative is to forfeit all the tweaking and tuning and instead buy a large number of impressions on a blind network.

A Step Backwards?

From the standpoint of agencies pursuing deep integrations with Web content, there’s no question that buying media via the new video syndication platforms is a limited proposition.

Dorian Sweet, executive creative director of Tribal DDB San Francisco, calls it a Cinderella story — one in which the ugly stepsister nabs the prince.

“This is like trying to fit the big foot of traditional media into the little shoe of interactive,” he said. “If you chuck an ad onto a piece of video, it’s still an ad delivered in the context of a vehicle. What are you going to learn other than that you delivered impressions? There isn’t really an interaction going on. It’s selling off space.”

According to Sweet, marketers seeking only deep branding experiences should probably stay away from buying into these new media marketplaces that are now in start-up mode. On the other hand, for the harried media buyer who’s desperate to snatch up another 500,000 video impressions before the end of the quarter, it might be just the thing.

That is, providing the affiliates materialize.

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