Taking a look at online video syndication

While Pixsy CEO Chase Norlin and Critical Media CEO Sean Morgan set up their businesses differently and focus on different sectors of the market, the two are both bullish about online video syndication. I talked to both of them this week about the potential they see in the market.

Pixsy is a B2B play focusing on delivering high quality video content enabled for monetization directly to partner sites where they can be curated into niche channels. Critical Media's ClipSyndicate and Syndicaster platforms leverage the parent company's unparalleled reach and speed in transcoding domestic and global broadcast content to provide a rich, real-time repository of online video news content. Syndicaster uses web-based tools for editing and pushing out content, enabling newsrooms to get content up on their own sites and distributed into the mid and long tail very quickly.

What is most impressive about both companies is how they've sidestepped a huge Web 2.0 snafu, the "huge audiences, but no way to offset costs through advertising alone" model, and instead, generate most of their income from licensing rights for companies to use their syndication and search services.

Syndicaster also gets a share of revenue from advertising it delivers to embedded videos from its licensees, but Morgan said "the lion's share" of revenues comes from licensing. Morgan said the company's main costs are in infrastructure, but that the company has scaled to the point that its margins are increasing rapidly and now has a positive run rate.

Norlin wrote an article in Mediapost discussing the different forms online video syndication can take and how various syndication models work from a revenue standpoint, and has some interesting ideas about how online video syndication could equal or surpass the $4.2 billion currently generated by TV syndication. Pixsy's Premium Feed service aims to increase monetization efforts by delivering only high-quality videos already accompanied by advertising, streamlining the process and generating higher interaction rates, according to the company.

Of course, Pixsy and Syndicaster have quite a bit of company in the online video syndication space, as Jambo Media, TubeMogul, and GrabNetworks play in video syndication, along with most of the prominent online video platforms, such as thePlatform, Brightcove and Ooyala. As in most segments of the industry currently, one has to think that some will either fall by the wayside or move out of the niche as a couple companies begin to take control and ramp up market share. But if Norlin is right about the potential for the market and it comes along relatively quickly, maybe there will be room for everyone to get a piece of the syndication pie. 

- Pete