Broadcast networks such as ABC, (s DIS) CBS, (s CBS) Fox (s NWS) and NBC (s CMCSA) (s ge) have all made their most popular shows available online through their own network sites and through online video aggregators like Hulu and TV.com. Meanwhile, pay TV operators like Comcast, Time Warner Cable (s TWC) and Verizon (s VZ) are teaming up with cable networks to offer authenticated access to on-demand and even live programming from cable lineups online and on connected devices.
What’s missing from the growing mass of Internet video is the content from local affiliate stations. Local news, local sports and local weather — the hallmarks of most broadcast content across the country — aren’t available online. But due to the contracts they’ve agreed to, affiliate stations aren’t able to stream their programming unless they can show that it is only being viewed by households in their local market. That is, a local Nashville station can’t stream its programming widely online; otherwise a viewer in Cincinnati might tune in.
And as more network programming shows up online, viewers have less reason to tune into the live broadcasts. That means affiliates are missing out on revenue from local ads that keep them going. At the same time that the networks are offering up video for free online, they are seeking reverse compensation from local broadcasters for carrying their programming. The local affiliates, in a sense, are getting squeezed from both sides as more content moves online.
A new startup named Syncbak hopes to enable those broadcast stations to take control of their own destinies and create their own streaming services, by offering a way for them to authenticate with local viewers and ensure that Internet-connected devices accessing that content belongs to households that can receive their over-the-air signals.
The startup was founded by Jack Perry, former CEO of Decisionmark, a company which provided software to Dish Network (s DISH) and DirecTV (s DTV) to authenticate local broadcast streams. For years, those satellite TV providers weren’t able to deliver local broadcast streams, until Decisionmark provided technology to determine which local signals to make available to different subscribers. And as we all know, finally having access to local news and sports helped grow the satellite TV business substantially.
In a similar fashion, by providing technology to ensure that a viewer is local, Syncback is opening the door to enable broadcasters to stream linear and on-demand video feeds in a way they previously couldn’t. The company sells a small rack-mounted server called a Syncbox that creates a closed transmission over broadcast spectrum and verifies that live content streamed over the web is only seen by those who can access it over the air. By authenticating, those local stations will be able to reach devices like Internet-connected TVs, or even smartphones and tablets, so long as those devices have connected through the same home network that the verified over-the-air device is on.
Syncbak spent the first year of its existence getting buy-in from broadcasters and ensuring it was working on a problem they wanted to solve. It spent the second year building the necessary proprietary hardware and software to create a verified stream. Now in its third year, Syncbak is working on getting its technology into local broadcast stations and also into consumer electronics devices.
Syncbak is currently in trials with about a dozen local broadcasters, and looks to have 50 participating stations by the end of the year. For the most part, those broadcasters are in early “friends and family” trials to see how the service could work. But Syncbak hopes that by next year’s CES, it will have its software embedded in devices like connected TVs. Even if it’s not embedded, the company has developed a dongle that can connect to the home network and authenticate with broadcasters.
Authentication opens up new potential revenue streams for local broadcasters, such as subscription or transactional business models. It also creates the ability for broadcasters to serve up local, hyper-local and otherwise targeted ads to run, increasing the potential CPMs they can charge local and national advertisers. Since programming is delivered via IP, the broadcasters also have detailed metrics for how viewers are watching shows that they can share with advertisers.
For all the possibilities Syncbak opens up for broadcasters, its business model depends on consumer adoption. The company aims to make money off of revenue share split with broadcasters, whether they make their money through subscription, transactional or ad sales.
Despite operating under the radar for the past two years, Syncbak has gotten some significant backing in that time. Strategic investors include industry groups like the National Association of Broadcasters and the Consumer Electronics Association. According to SEC filings, it has raised $4.2 million over two rounds of funding so far. With industry backing and a compelling message to broadcasters, Syncbak could power some interesting new services beginning soon. The question is if Syncbak and its broadcast partners can capture consumer attention.