Cisco Eos Sold With an Ad Rev Share

Written by R. Scott Raynovich - Light Reading

Thursday, January 8. 2009 at 05:00 PM EST 1 comment

Digg   Del.icio.us   Reddit   Email This

no ratings

• Login to Rate

LAS VEGAS -- CES -- Cisco's new push into the content management space with its Eos white-label software platform is unique in many ways -- most notably because it's a new market for Cisco as well as being part of a new digital media push. One interesting nugget we learned of today is that the product is being sold to media companies with an ad revenue split, rather than a traditional straight licensing agreement.

Scott Brown, manager of marketing strategy, says the pricing model for Eos is a combination of a "nominal license fee and an ad revenue split." This approach came out of discussions about how the online entertainment market is working. Cisco is targeting its Eos platform at large media and entertainment companies, which may have to launch hundreds of new Websites per year to support artists and entertainment brands.

"You have this interesting dynamic where you can't give it away free, but you have to have skin in the game to grow the audience," said Brown in an interview today. "Most content is ad-supported now. Ad revenue share is the most natural thing."

Initially, says Brown, this will limit Cisco to focusing on "large media companies monetizing through advertsing." But he didn't rule out building products for other models, including subscription services.

Cisco's initial customer announcement is Warner Music Group, which is using the product to manage Websites for artists Laura Izibor and Sean Paul.  It says other trial customers are in the pipeline. Cisco demonstrated the product using assets from Fox, but said that Fox was only cooperating with them on demos and that no relationships have been announced.

The product is built on a software-as-a-service (Saas) model, and Cisco's pitch to media companies is that it can lower the total cost of ownership (TCO) of managing multimedia assets on the Web. Media companies could more inexpensively launch new Websites with a service, rather than installing, developing, and maintaining the systems themselves, says Brown.