Syndication Could Drive New Revenues for Online Video

Written by Aditya Kishore

Tuesday, March 31. 2009 at 11:58 AM EDT Post a comment

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Online syndication works by turning the traditional TV exclusivity model on its head. By gaining widespread distribution for a piece of video, the rights holder can aggregate a considerably wider audience.

A case in point is CBS Sports, which reports that its online coverage of March Madness has already broken last year's records. Traffic was up 56 percent on day one, and video consumption was up 65 percent, averaging more than an hour per user. Last year, 5 million video and audio streams were consumed, up 81 percent over 2007.

One of the drivers of CBS Corp. (NYSE: CBS)'s success is a strategy to grow the accessibility of March Madness content including highlights, scores, and other content.

This year, March Madness On Demand content will be available from 300 sites, including ESPN.com, Yahoo Sports, SI.com, USAToday.com, and other CBS Interactive sites, such as TV.com, GameSpot.com, CNET.com, and sites owned by CBS TV and radio affiliates. CBS Sports is also distributing content on Facebook and MySpace , as well as on video on demand (VoD) services from pay TV providers.

This online video syndication strategy is helping CBS increase video views, as well as drive traffic to NCAA.com and its own site for the live games. Ad revenue from the games online is expected to exceed $30 million in 2009, up from $23 million in 2008.

Since more views drive higher advertising revenue, the rights holder could generate higher revenue. And, as in the case of CBS, the really valuable content may be reserved for its own site, with syndicated content simply whetting viewers' appetites, potentially driving a broader audience back to its site.

As discussed in the new Contentinople Insider report, "Online Video Syndication: Pushing Video To Pull Viewers," syndication has its own set of challenges: Audience views must be tracked, reported, and consistently and accurately measured. The operational requirements for feeding video to multiple sites and managing the metadata and format requirements of each can be onerous.

There is also the question of whether a site that has a strong brand and high-value, mass-appeal content should use it to drive traffic to its destination site, or syndicate the content across multiple sites. Quality control and protection, as well as effective ad policies and delivery, are other critical issues.

However, syndication tools from video publishing platforms such as thePlatform Inc. , Brightcove Inc. , ExtendMedia Inc. , Ooyala, and others, as well as specialized tracking and measurement tools from companies such as FreeWheel, FeedBurner, and TubeMogul, offer solutions for content rights holders interested in syndicating content.

As a result, syndication could be an effective strategy for established brands and emerging online video providers to grow audiences and revenue.

The Contentinople Insider "Online Video Syndication: Pushing Video to Pull Viewers" examines the trade-offs of syndication, analyzes major players and their strategies, and evaluates the technology and tools offered by key vendors in this space.