Situation: Surfline, which started as a surf-forecasting service, is looking to Web video to cultivate a new stream of revenue from advertisers. Advertisers? interest in the young males who frequent the site is propelling the company?s diversification into the media business.
The company?s Web site addresses those twin goals with a mix of content: Predictions on where waves are going to hit around the world, user-generated and professionally produced video, photo galleries, surfcams at well-known breaks and news.
?We were a utility and perceived as such,? said Robin Walker, the company?s VP of sales. ?Now with new media, that image is changing. The audience is engaged and we can support what the clients want. It?s a dual-revenue model.?
Problem: Surfline wanted to tap advertising revenue to complement its subscription revenue, as well as offer features to draw and retain users.
Industry: Wave forecasting, media
Video play: Entertainment, advertising, marketing
Strategy: Surfline houses both user-generated and professional content on its site as a way to entertain users and attract new subscribers to its data service. The company also creates sponsored videos and distributes them around the Web.
Result: Surfline's Web traffic is boosted by Web video and the company is able to charge CPMs of about $28, around the industry average.
Solution: Surfline was in the enviable position of wanting to build a media business based on a subject matter that lends itself to video and still photography. The surf film genre took off decades ago and developed a dedicated following that has gobbled up the content, whether in theaters, on DVDs or on YouTube.
Surfline founder Sean Collins, who engineered the software that generates wave predictions, moved to tap that interest in surf videos more than five years ago. He hired a video editor who was tasked with taking user-generated content and edit into clips that could be used on Surfline.com.
Surfline went on to build video capability from the ground up on its Web site, developing the software tools that would accommodate the medium. Over the last five years, the company has tweaked the video player using in-house talent and outside contractors.
Today, Surfline employs a video editor and an assistant who cull user-generated submissions and professional content to host on the site and propagate on video-sharing services.
Most of the video on Surfline.com is delivered in Adobe Flash and QuickTime formats, and Surfline rents rack space to store the files. Akamai serves the video.
The company has also gotten into production, partnering with surf apparel company Hurley to make videos that feature a professional surfer interviewing surf stars about the tournament trail and other subjects.
That series, ?Going Off,? hosted by Pat O?Connell, is produced by video pros from the TV and film industry. O?Connell is on contract with Hurley, Surfline doesn?t incur costs for his talent.
Much of the site?s user-generated content comes over the transom free, whether it?s from enthusiasts or surf companies that deliver high-quality video of their celebrity team riders. Surfline will pay for some videos if the quality is high enough, Walker said. The costs vary, but the company doesn?t offer more than a couple hundred dollars for submitted video.
For Surfline, distribution is the next hurdle. The company posts its best material on sites like YouTube and Break.com, but because the creators own the clips, Surfline is limited in how it can use the content. Taking liberties with the rightsholders? video is out of the question, given how tight-knit the surfing community is, Walker said.
The company currently doesn?t have the resources to undertake a more aggressive video syndication strategy, but tries to distribute clips as broadly as it can with in-house staff. Ultimately, the plan is to syndicate through partnerships with partners that have large audiences that would enjoy surfing content. That means approaching TV networks, advertising clients with large audiences on their own sites, and social-networking sites, Walker said.
The company is tapping both a cost-per-thousand model and a sponsorship model to wring revenue from Web video. The site draws 1.2 million unique monthly visitors, which lets it charge a $28 CPM for ads linked to video, about the industry average, according to Walker. Surfline sells both pre-roll ads and display ad units to accompany the videos.
?We are in a situation that lets us sell on an impression-based model, so we aren?t stuck in that silo where we need sponsorships,? Walker said.
The surf industry?s long acquaintance with video entertainment has made it quick to embrace Web video advertising, and often clients have their own staff to produce material, he said. Surfline works to tap that endemic market, but also works with agencies on ad deals.
Sponsored video is the latest revenue play Surfline has made in Web video, with the Hurley ?Going Off? series marking the first such deal the company as made.
?If we find the right product that fits the advertiser?s identity, that works for both of us,? Walker said.
Evaluation: Surfline monitors how many videos are played and viewed, but can?t break out to what extent video is drawing or keeping people on the site. The company does, however, have data showing that more people are watching videos on Surfline.com than in the past and that those viewers tend to be younger. Walker characterized the year-over-year growth in consumption of video as dramatic.
By Greg Baumann