Searching for TV Profit Online

TV broadcasts once disappeared into the ether. Now Critical Mention is helping to give them a long tail.

By Erick Schonfeld, Business 2.0 Magazine editor-at-large

(Business 2.0 Magazine) -- Looking out over Central Park from the rooftop aerie that houses his New York City startup, Sean Morgan dreams of becoming a new type of media mogul.

"The rumor is that this used to be the duplex apartment of Gene Kelly," he says of the space behind him, packed with cheap cubicles and 50 workers.

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As CEO of Critical Mention, Morgan is plotting some fancy footwork himself. Going up against the likes of Google (Charts) and NBC Universal, he's bringing search to TV - and TV syndication to the Web.

With Critical Mention, he has a Web-based service called CriticalTV that lets corporate and government customers monitor thousands of hours of news broadcasts from the nation's 50 largest television markets as they occur.

Nearly 500 customers - including Pfizer (Charts), Sony Pictures Entertainment, major election campaigns, and U.S. intelligence agencies - pay more than $6,000 annually per seat for the service, amounting to roughly $3 million in revenue. By indexing the closed captions for all the video stored on CriticalTV, the service creates searchable transcripts on the fly.

A long tail of bigger riches

And the service is still getting smarter.

Using speech-to-text software recently licensed from IBM Research, CriticalTV will soon monitor video that isn't closed-captioned and also search Arabic-language TV and translate it into English. Customers ranging from corporate PR officers to FBI analysts to oil executives will continue to be alerted via e-mail (with a link to the video clip) minutes after a company, product, or terrorist name is mentioned on TV here or abroad.

But while CriticalTV pays the bills, Morgan's ambitions go beyond mere monitoring. Through a newer service called ClipSyndicate, he is syndicating professional TV clips on the Web.

In an era when TV stations are losing their audience to channel surfing, commercial skipping, and the Web, the ClipSyndicate site promises to find a better audience for news broadcasts. Morgan has already struck deals with more than 65 affiliates and is in discussions with all the major station groups to host clips from their local news and other shows.

Why read when you can watch?

Once the video is on ClipSyndicate, publishers can search for segments, splice them, and stream them through their own sites. In effect, Morgan is turning one-time TV broadcasts into media chunks that can be remixed for more exacting online audiences.

ClipSyndicate will insert 15-second ads in front of each video stream and split revenue 50/30/20 with the affiliate and the web site, a model similar to NBC's new business, the National Broadband Co.

Many think there's money to be made: JupiterResearch pegs the online video ad market at $400 million in 2006 and $1 billion in 2010. "Our objective is to own the best ad delivery and news network on the Web," Morgan says. Of course, he lacks the resources of NBC, but he can also avoid competing directly with the TV affiliates he's courting as customers.

Morgan is already beginning to syndicate this video to niche sites like Construction.com, Fire Engineering Magazine, and Military.com that want to build "skinny TV channels" on the Web.

"Do you want to read about the fire, or do you want to watch it?" Morgan asks. "We've got a captive audience here."

Ultimately, he's convinced that the long tail of niche audiences will fetch higher advertising rates than affiliates get today for their general broadcasts. If Morgan is right, you can be sure he'll be tap-dancing on his terrace soon.  Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.