5min announced today a deal to syndicate home and food videos from Scripps Networks (s SNI), give Scripps the ability to sell advertising on its videos and others in the 5min VideoSeed network, and provide relevant videos for Scripps sites. (Scripps properties include HGTV, Food Network, DIY Network, Shopzilla, BizRate and uSwitch; it wasn’t stated which ones will be involved with 5min.)
5min has a pretty neat model and one I didn’t understand until a recent conversation with CEO Ran Harnevo. He explained that, in contrast to the how-to video destination site it started out as, 5min has become a video ad network, but one that distributes contextually relevant video content and then layers advertising on top of them.
So a site like Answers.com, DoItYourself.com, something more specific like Pregnancy.org, or now Scripps properties, can keep going about their normal business producing text content. 5min inserts an in-line video player that pops up when it determines one of its 120,000 pre-screened videos is relevant to the particular topic. Ad revenue from views of the video is shared between 5min, the publisher, and the creator of the video.
Harnevo said 5min has sold 100 percent of its inventory for the past 12 months and gets an average 2 percent click-through-rate for direct sales. Sites in the network are making “five digits a month” and content creators $5,000 to $10,000 per month. 5min has 320 publishers and 250 million monthly uniques.
Sure, 5min is just getting started, but the company is clearly doing something right. It’s taking how-to videos, which are the closest parallel to contextually targeted cost-per-click Google text ads, and treating the videos just like text ads.
Google (s GOOG) itself had actually done something similar with YouTube videos. However its AdSense Video Unit product was not about context, but rather publishers choosing to display videos from a pre-set list of YouTube partners. That product was shut down earlier this year. YouTube is now experimenting other contextual video recommendations within its own site, but it’s never really given the distributed, contextual approach 5min is taking a fair shot.
But where 5min is focusing on distribution rather than production, another how-to video startup is doubling down on its investment in content. Howcast has raised $1 million in a $3 million round of funding, according to an SEC filing found by paidContent. The company says it’s “selectively expanding participation for growth capital” based on “strong market traction.” Howcast, which has recently gotten glowing coverage on Nightline and in the New York Times, told both outlets it expects to be profitable next year.