4. How do I make money?
Scott at NewsEdge noted there are numerous models for content owners to earn money from syndication. "One way is a flat-fee basis," he said. "That model typically works with some of the large providers. We have unlimited access to their content, and for that we make, say, a once-a-year payment that covers all our usage. The benefit of that model is that it provides a very predictable revenue stream for the content owners. They know that every year or every quarter they're going to get a certain fee. It also is an efficient model because NewsEdge doesn't need to do any sort of counting or calculations in order to figure out how much to remit to that content provider.
"Another model is to deliver the full feed of a certain content provider to certain clients. For example, we might deliver the full feed of a specific magazine to some of our subscribers, and then the publisher will get paid based on either the number of clients who receive the content or the number of individual users.
"That model might be used for the sort of content providers who feel their information commands a premium price. It also might be used by content providers who don't want to compete against themselves. They want to be able to get a certain amount for their content whether it's sent directly by them or through a third-party syndicator, and they want to have a level playing field among all their distributors.
"One way that model benefits providers is that they know who's getting their content because they get an analysis at the end of every quarter or every year saying these are the 300 or 400 or 800 customers getting the content through NewsEdge. Their content doesn't flow to anybody who doesn't make the decision to buy it." Scott pointed out that because the model requires customers to pay a separate fee, a disadvantage is that providers might not get as much usage as they would if their content were priced differently.
"Another model we use is to pay the information provider on a per-usage basis," Scott noted. "We take full feeds of content into the NewsEdge Refinery (the editorial and technical processes through which thousands of articles are reviewed, sorted into one of 2,000 topics, tagged, and delivered to public and private Web sites). Then we remit back to the content provider based on how many of their stories are used in our daily newsfeeds. The provider needs to be sending us good and relevant information in order to make it into our news topics, and then we will pay the provider on a per-usage basis.
"NewsEdge clients do not have any per-article charges or per-click-through charges or anything like that, so we don't have any variable models with content providers. There are other syndicators, though, that have business models based on variable content usage. For example, every time a user clicks on a story, a couple of pennies will get paid back to the content provider, or every time somebody clicks on a story, there will be a revenue share in terms of the ad space associated with that particular piece of content, but that's not something NewsEdge does. Our customers like the predictability of understanding what their charges are going to be up front."
There is at least one other model some content providers use-they offer their information to syndicators free. Scott noted "if a publisher's goal is to drive brand, they may say to NewsEdge, 'Here you can have all our content for free, and I want you to use as much as you want as often as you want because my goal is to get my brand name out there.'"
5. What kinds of usage reporting are available?
Besides the revenue model, you also should consider what type of usage reporting a syndicator offers. At NewsEdge, "it depends on what type of deal we've struck," Scott said. "If we have a deal for unlimited usage of content, then there isn't a lot of reporting."
Howatson at ScreamingMedia said, "We provide reports about thirty to sixty days after the end of the month. The providers receive details on where their content went and who published it, which is really a wonderful knowledge tool to have."
Prince said YellowBrix reports usage by customer and by page view. Kinecta offers a hosted service called Content Metrics (formerly known as Traffic Register). "It's a service that allows content providers to track how their content is being used once it has been distributed to their customers," said David Burke. "We're able to track the number of times a news story has been accessed. We track page views and then we also are able to track the number of individual users who have accessed news stories, so we track unique visitors as well." A new version of the product also has added the ability to track click-throughs on links to advertisers or other pages.
"The great thing about Content Metrics is the ability for providers to get real-time feedback on how well their content is doing," said Erin Curtis, director of communications for Kinecta. "Providers then can turn around and package their content differently depending on how well certain types are being used. We think that's really critical for syndication."
Determining the most effective types of usage reporting, revenue models, and other aspects of syndication are especially critical now because the market has been in a bit of turmoil during the past few months. Many of the Web sites that receive information from syndicators have died, and some syndication companies have laid off large numbers of employees or repositioned themselves primarily as infrastructure providers. Discussing even the most minute details of a syndication deal before signing on the dotted line is a content provider's best hope for reaping the rewards and avoiding the major pitfalls of syndicating in today's volatile content market.