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Syndicate or Die

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Finding Your Audience
While online video is still a new phenomenon, a few truths are starting to emerge. One is that viewers often have their favorite destinations, and that’s where they like to find their shows. A YouTube regular might subscribe to dozens of shows on the site but never explore the works on Atom.com. Someone who likes to download video podcasts on iTunes and then sync them with an iPhone might never browse around Vimeo. Video creators can’t expect good word-of-mouth alone to bring a flood of viewers to their preferred hosting site. That’s why many creators blanket the web with theirworks, putting them on as many hosting sites as possible to reach as many eyeballs as they can.

This brings up a crucial term for online syndication—scale. Let’s say you create a six-part video series for $2,000. By posting it on your own site, you might not make enough to recoup your investment. Evenestablished newspapers and magazines are discovering that their own sites won’t make enough in ad revenue to cover their videos’ costs. You need your video to scale—to cover its costs. The answer is to get it seen on other sites and bring in more viewers. The video’s costs don’t change, but the revenue it brings in does. Bring in enough revenue from various sources and suddenly your video scales and your costs are paid, and everything above that is gravy.

Figure 3
"Syndication is a critical revenue stream to getting the kind of scale that’s required to produce a return forproducers in online video," says Michael Gatzke, vice president of distribution for Grab Networks.

"Syndication is a critical revenue stream to getting the kind of scale that’s required to produce a return for producers in online video," says Michael Gatzke, vice president of distribution for Grab Networks, Inc.

Blanketing the web, however, seems to fly in the face of one common syndication strategy: Many of the sites that pay for content want an exclusive. Once you go beyond revenue-sharing deals and find sites that spend money up front on original online video, you’ll discoverthat they want some kind of exclusive for their financing. This could take the form of geographic exclusives or, more often, time exclusives. For geographic exclusives, think how major sporting events such as the Olympics or the Tour de France are hosted solely by one site in each country. Geographic restrictions also play a part in how mainstream movies are made available online. Because they’re a part of the entertainment industry’s established distribution system, they’re bound by regimented release schedules.

More common, however, is for sites to purchase a time window when they’ll be exclusively showing a video. After that window ends, the creators are free to blanket the web with that content, if they wish. Sites such as Atom.com and Facebook pay to host videos by wellknownonline creators for a length of time, often around 2 to 6 months.

For his next series, Hurtling Through Space at an Alarming Rate, Davies is skipping the revenue-sharing model and selling an exclusive: "It was financed by Babelgum.com, we will be semi-exclusive through their sitefor premiers of episodes, for the six that we’ve agreed to do for them. We’ll have our own dedicated site to the show, and that’s really the only place for the timebeing that people can see it. Eventually we can mass-distribute,"Davies says.

Exclusive deals aren’t always popular, however.

"[For] the vast majority of deals there’s no exclusive. Itwould be foolish for a producer to give many exclusivesbecause you want as much distribution as you canachieve," Gatzke says.

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blip.tv CEO Mike Hudack says that every show online has a "TotalPotential Audience," achievable only by syndicating to numerous outlets.

Mike Hudack, the CEO of blip.tv, is even more opposed to exclusives: "I think the first person to say this in a way that resonated with people was Quincy Smith at CBS Interactive. He made a comment that there’s no such thing as exclusivity on the internet. I really believe that. I think that the natural state of information on the Internet is fluid: it goes everywhere, it wants to go everywhere. It’s a cliché, but information wants to be free, and when you try to lock it down into exclusive windows you end up doing a disservice to the content, you end up doing a disservice to the audience, and you do a disservice to yourself."

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