With an estimated 167 million-plus websites on the internet as of April 2008, attracting a sizable audience is a major challenge for content creators large and small. Enter online content syndication. Today, smart media players are sending content to thousands of websites across the internet, extending their brands and accumulating the mass audiences advertisers covet. There are three basic approaches to online syndication: Viral Syndication, Partnered Syndication and Managed Syndication. Most producers building a custom syndication strategy will want to incorporate all three tools.
Viral syndication is a powerful marketing technique designed to introduce online viewers to content wherever they consume media and ultimately drive traffic back to the host website. Empowered by new distribution technologies, media players distribute bite sized promotional content, including video clips, to numerous consumer portals blogs and social networks. In the case of video, a presence on major video sharing sites such as YouTube (www.youtube.com)1, Yahoo! (www.yahoo.com), Veoh (www.veoh.com) and Metacafe (www.metacafe.com) is critical. However, there are also numerous vertical destinations devoted to single content themes from Dogster (www.dogster.com) to Canada’s own Jokeroo (www.jokeroo.com).2
Syndicating to social networking communities on Facebook (www.facebook.com) and MySpace (www.myspace.com) as well as niche websites allows creators to target and engage key audiences who act as ‘fans,’ bringing new viewers back to the anchor property.
Viral distribution is made easier with the help of a host of online syndication services. TubeMogul (www.tubemogul.com) for example provides cost-effective end-to-end video distribution to numerous consumer video portals and social networks.
They also provide robust viewer analytics for syndicated content. Clearspring (www.clearspring.com) offers low-cost widget distribution for multi-media content including videos, slides and games, to over 25 social media sites.3
Some consumer video sharing sites offer revenue to creators, but actual payouts, except in rare cases tend to be modest.4 While viral content can reach thousands – even millions – of viewers, once released, content is effectively out of the creator’s control and can be mashed-up, posted anywhere and appropriated by virtually anyone. For this reason, premium advertisers and sponsors are typically reluctant to be associated with viral content. Therefore most media companies view viral syndication as a promotional rather than revenue generating strategy.
Media syndication companies like Grab Networks (www.grabnetworks.com) Clip Syndicate (www.clipsyndicate.com) and The News Market (www.thenewsmarket.com) offer professional content partners revenue potential without significant upfront investment. Grab Networks matches high quality professional news and short-form entertainment clips with advertising and makes it available to millions of publishers looking to augment their websites’ content. Grab Networks content partners include CBC and the NHL, and numerous smaller content creators.
Professional syndication services can attract high value brand advertisers earning as much as $30.00 per- thousand- views (CPM’s) from video-related ads. Syndicators typically share 30 percent or more of revenues with the creator5. However creator revenues are dependent on the popularity of the clips and vary widely.
Some services use an opt in distribution model, where any publisher can take content from the central library to post on its website. Producers have little control over where content ends up, and should treat partnered syndication as a modified form of viral content, releasing only clips and non-exclusive content for distribution.
More and more media players today are developing a core audience network of carefully selected web destinations (‘affiliates’) to feature their content, often on a long-term basis. As this a closely managed scenario with revenue potential, media companies distribute premium content, including websites, full program episodes, mini sites and other long-form content. Creators select affiliates based on their strong viewership, complementary audience demographics and appropriate editorial environment, maximizing audience and revenue opportunities.
There are currently three major revenue models associated with managed syndication, Licensed Syndication, Advertising Supported Syndication and Sponsored Syndication.
In Licensed Syndication, creators provide affiliates with content to host on their websites. Risk is minimized as the affiliate covers streaming costs, sells advertising, and pays the creator a license fee. Producers report earning solid license fees from foreign broadcasters for content sold in tandem with on-air programming.6 Other websites commonly pay creators up to 50% of net advertising revenues which can vary widely. Websites who do not have their own sales team often relinquish from 40% to 60% of revenues to third party ad networks leaving little to share with a content creator.7 Creators can maximize revenues by licensing multiple titles and targeting affiliates with a robust sales force and premium brand advertisers.
Advertising Supported Syndication is a growing model for large media players with sought-after (usually television) content, online video streaming capabilities and existing advertising sales resources. Here, media companies solicit advertisers and offer advertising-embedded video to any number of website affiliates, retaining the lions’ share of advertising dollars, typically paying affiliates between 10% and 20% of revenue8.
The opportunity to reach large audiences through a network of carefully selected websites presents an attractive value proposition for brand marketers. CBS is a pioneer of this form of syndication, operating an ‘audience network’ of over 300 partner destinations and reaching 92% of U.S. online viewers9. Others include MTV Networks, (www.viacom.com), Hulu (www.hulu.com) and ESPN (www. espn.go.com).
Advertising supported syndication is investment-heavy and potentially revenue-negative for all but the largest media companies. In the case of videos, creators must cover costs associated with hosting content and ‘exporting’ an ad-embedded video player that appears seamlessly on affiliate sites. They also underwrite the substantial cost of selling advertising against their property, or accept diminished revenues by working with a third party ad network. Traditional advertising revenues are often not adequate to cover costs or companies without sufficient scale. This model is therefore rarely recommended for smaller players10.
Sponsored Syndication is emerging as a promising revenue opportunity for media companies large and small. Here, creators sell premium sponsorships and product placement to brand marketers in conjunction with a syndication plan. By distributing sponsored content to numerous online destinations, producers provide marketers with integrated positioning as well as a mass audience. Thus, creators can charge substantial sponsor fees. However, marketers often favour packages with custom content and therefore are best approached at the development stage.
Some U.S. producers are exploiting a barter model, providing broadcaster websites and other high-traffic portals with free integrated content pods complete with articles, video and even online games. In return, the host websites accept the content complete with embedded advertising, product placement or major recognition for a content sponsor. U.S. producer Studio One Networks (www.studioonenetworks.com) syndicates multimedia sponsored content like The Dog Daily (www.thedogdaily.com) to over five hundred websites including those of the world’s largest entertainment brands.
Sponsored syndication is also being tested using online advertising networks. Family Guy (www.familyguy.com) creator Seth MacFarlane’s internet-only Cavalcade of Cartoon Comedy series (www.sethcomedy.com) was financed using this model. The show’s producers bought and bartered advertising space throughout Google’s adsense network then sold it to sponsors like Burger King. Google distributed short comedy clips created by Macfarlane including top and tale sponsor recognition. According to the show’s producers, the series was streamed more than 14 million times within three weeks of launching11.
Accessing Distribution Technology
In order to build a robust content syndication strategy which includes video, creators will ultimately want to outsource online broadcasting and distribution to a platform technology provider. Some of the better known firms include Brightcove (www.brightcove.com) The Platform (www.theplatform.com) and Move Networks (www.movenetworks.com).
As noted earlier, viral syndication can often be accomplished through uploads to video sharing sites, widgets and Media RSS feeds. Creators who license video content to others to display can often give affiliates direct access to their library online or provide a Media RSS or XML feed. However, producers who wish to distribute ad embedded video to a controlled network will require a video player. The player is then seamlessly embedded on affiliate partner websites.12
Despite the help of new technologies, launching a full syndication strategy is no small task. The absence of technical standards for online video translates into having to convert content to multiple formats, and maintaining syndication partnerships is time consuming. This speaks to the necessity of a planned syndication strategy designed to deliver maximum results with select partners over time.
Preparing to Exploit the Syndication Economy
As internet audiences continue to fragment, many predict that syndication will explode. In order to take advantage of the growing ‘syndication economy’ producers will need to plan:
- For any online property, try to clear all content and talent worldwide at the outset. Syndication opportunities will be limited otherwise.
- Avoid exclusive content licenses where possible. Syndication opportunities and revenues are growing. It will be important to have access to your content to take advantage of this developing marketplace.
- When seeking sponsorship or product placement for an online property build in syndication opportunities that cumulatively deliver mass eyeballs.
- Budget to create syndicated clips, mini-sites, games and other viral teasers as part of your online property.
- Begin planning and budgeting for the substantial costs of encoding, formatting and storing your existing content library as soon as possible.
- Research and select appropriate technology providers early to ensure that your syndication strategy matches your operational capabilities.
While online syndication is still relatively new and revenue models are evolving, it is worth experimenting in this space today. Those able to stake out early distribution networks stand to significantly increase their competitive position and move their content to the top of the online play list. The new normal may well require that all players take content to the viewer or risk being overlooked in a crowded marketplace.
1 YouTube attracted over 300 million unique video viewers across the world in December 2008. (Nielsen NetRatings, December 2008)
2 For a list of over 300 consumer video sites see http://www.reelseo.com/list-video-sharing-websites
3 See www.clearspring.com for in-depth information on widgets and social media syndication
4 For example, Video sharing site Metacafe offers a Producer’s Rewards program where 1,000 views equals $5 and payments start after 20,000 view ($100). Larger media companies with libraries of well-known premium content may be able to negotiate more lucrative arrangements with consumer video sites on a case by case basis.
5 Note however that CPM rates are extremely flexible. At the time of writing, syndicating print content (vs. videos) was far less lucrative due to falling display advertising rates. See http://pubmatic.com/adpriceindex/index.html for a report on 2008 4th quarter U.S. online display rates.
6 See the Bell Broadcast and New Media Fund Report Where We’re At: A Snap Shot of Distribution & Revenue Models for Cross-Platform Production, page 10 for sample license fees paid for online content, mainly sold in conjunction with broadcast programs. For example, according to the Report, companion websites can garner from $5,000 to $30,000 depending on the content and broadcaster.
7 As of April 2009, many websites realize net video revenues of less than $10.00 per-thousand-views and print revenues of less than $1.00 per thousand views. See the blog post by Jeremy Allaire, CEO of Internet TV platform Brightcove, 5 Key Costs of an Online Video Business http://blog.brightcove.com/jeremy/2009/02/5-key-costs-of-an-online-video-business.html for an analysis of current online video advertising revenues.
8 Brightcove Whitepaper, Reaching Your Audience, A Practical Guide to Online Video Distribution Download at http://go.brightcove.com/forms/reaching-your-audience
9 For more information see http://www.cbs.com/can_player/about.php
10 See the blog post by Jeremy Allaire, CEO of Internet TV platform Brightcove, 5 Key Costs of an Online Video Business http://blog.brightcove.com/jeremy/2009/02/5-key-costs-of-an-online-video-business.html for a frank discussion of the costs of publishing online video