Hearst Set to Offer Online Programs

Mar 5, 2007  •  Post A Comment

Online video syndication is about to get even more competitive.

Adding to the offerings television companies vie against on the Web, Hearst Magazines, one of the biggest publishers in the country, and technology provider Maven Networks plan to start distributing online this week more than 1,000 short clips pegged to the publisher’s magazine brands.

The influx of this video—on topics such as how to fold a fitted sheet or how to section a pineapple under the Good Housekeeping or Country Living banners—adds new wrinkles to the evolving Web video syndication business.

The Hearst offerings have the potential to become a fresh source of competition for TV networks. In addition, Maven is establishing itself as a new player on the online syndicated video circuit.

Hearst partnered with Maven to regularly offer video on the Web sites for such titles as Good Housekeeping, Cosmopolitan and Esquire, as well as on portals such as MSN and other sites that Hearst plans to strike deals with for Web video distribution.

The Hearst deal is Maven Networks’ first foray into video syndication. Executives at the tech provider said they expect to continue expanding into distribution, beyond their existing business of helping media companies deliver video on their own Web sites.

Among its other new syndication deals, Maven just inked a deal with Univision for the Spanish-language broadcaster to syndicate video online, executives said.

Online video syndication allows content providers to distribute their video clips beyond their own sites and into deeper recesses of the Web, creating more video inventory to sell ads against. Research firm eMarketer predicted that online video ad spending will grow 89 percent this year to $775 million, up from $410 million last year.

Hearst’s expansion into online video should serve as a warning sign to television networks that competition on the Web can rise up from anywhere.

“Networks’ chances to reach their linear programming into the Web just got harder,” principal Forrester Research analyst James McQuivey said.

Crowding the Competition

Maven likewise is entering an increasingly crowded space.

After Google struck a deal last summer to distribute video clips from MTV Networks across Web sites in its Ad Sense network, NBC Universal created the NBBC, an online marketplace of Web sites that share video with each other.

Technology firms such as Brightcove and Broadband Enterprises syndicate video for their clients within their respective networks of Web sites. AOL Video is also developing a video syndication strategy. Rather than establish a network of Web sites, Maven lets its customers dictate which sites they want in their distribution network.

“These companies are using Maven to create a controlled syndication network,” said Hilmi Ozguc, founder and CEO of Maven Networks.

Maven’s customers pay a license fee based on usage, which means Maven gets paid only if a video is played.

Those twin aspects of Maven’s business model appealed to Hearst, said Chuck Cordray, VP and general manager of Hearst Magazines digital media.

The publishing company has built out its digital unit over the past year from less than 20 employees to more than 100 in preparation for the Web video push of 14 magazine titles. The revamped Esquire Web site is up and running, with Seventeen and Cosmo Girl launching in the next few weeks.

Hearst will add to the initial 1,000 videos over time.

The reason for the new Web effort is simple: Advertisers are migrating online, Mr. Cordray said.

Some of Hearst’s video content competes directly with lifestyle content from Scripps Networks’ Food Network and HGTV. The company’s response to competition from start-ups and established players is to push its content wherever audiences are online via syndication to MSN, Comcast.net and other sites going forward, said Jim Sexton, senior VP of interactive brands at Scripps.

“We are entering an era of incredible change and all bets are off,” said Gary Bellis, VP of communication for the Television Bureau of Advertising. “But fundamentally, it’s the people who have been at the certain kind of business [who] generally have the advantage.”