On Wednesday, Zype came out of stealth mode to launch its cloud-based video service for publishers who want to go beyond using YouTube to connect directly to consumers.
Zype lets publishers draw upon their video libraries on Hulu, YouTube, Crunchyroll, and elsewhere on the Web, and put the content on branded websites and apps for multiple devices. For example, Konami’s 4K Media uses Zype to steer fans to its site for online episodes of its animated series “Yu-Gi-Oh!” while also offering supplemental content about the show and its related card game.
Creating central, branded places to find such content, CEO and co-founder Ed Laczynski says, may boost discovery and traffic from viewers. Zype launched in private beta back in December 2013, and has been generating revenue. “Our game plan is to open up our technology and make it available to anyone,” he says.
Another company using Zype is Digital Media Rights, which Laczynski says is launching a content channel called Midnight Pulp. The target clients for Zype, he says, are companies with large libraries of content such as television shows and movies.
Video channels have been around for a while, but Laczynski says the rise of cloud-based technology opened the door for low-risk and low-cost online services. “Even five years ago, it was capital-intensive to develop pretty much anything in software,” he says.
Such an investment could include hardware, hosting services, connectivity, and the actual cost of development. With the cloud, he says, developers have access to software and tools that let them work nimbly without buying lots of equipment. “That created a condition for this type of thing to be built,” Laczynski says.
Zype is a behind-the-scenes service, he says, letting publishers push their own names. “These content owners can deliver an HBO Go-like experience, a Netflix-like experience, or a YouTube-like experience in their own brands,” he says. The publishers get such services, Laczynski says, without having to handle hosting or other IT functions themselves.
For example, for the desktop computer version of the Yu-Gi-Oh site, Zype offers the show’s content from Hulu. “But in mobile,” Laczynski says, “where Hulu doesn’t monetize as well, we’re serving up a proprietary player with proprietary ad networks.”
He says his company also collects metadata for its customers when visitors to their sites click on additional material, such as art and details about the content.
Laczynski believes Zype will appeal to publishers who want more freedom in the handling of their online videos. “Content owners can decide how they want to monetize and how they want to distribute without going through multiple layers of IT,” he says.
Companies can explore different distribution models through Zype, Laczynski says, to fit different markets. For instance, they could test the waters with ad-supported video and then, he says, and then change it if it does not catch on with the audience.
Further, he says, as more consumers go strictly mobile and digital for communication and connectivity, they are driving the use of diverse devices. “They are changing the behavior around consuming video,” Laczynski says. That created an opportunity, he says, to develop Zype.
The company generates revenue through monthly subscription fees from its customers as well as performance-based fees from the number of videos viewed. There is also some revenue sharing, Laczynski says, with content owners that use Zype’s advertising networks and subscription platform.
Laczynski and co-founder Chris Bassolino previously worked together in digital media for a subsidiary of the McCann Erickson advertising agency. “That’s when we got the digital bug in us,” Laczynski says. He went on to found LTech, which helps connect businesses with cloud services, and then became senior vice president of cloud services with Datapipe.
Looking to start something new, he reteamed with Bassolino to create Zype. The company has been largely bootstrapped, with some angel funding along the way, Laczynski says, and a formal funding round may be in the offing for the future.
Now that the company is out of stealth, Laczynski says, Zype plans to develop software development kits for more devices such as Xbox and Samsung Smart TV. Zype also expects to allow publishers to draw upon content from more sources, he says.
With 2015 approaching, Laczynski says Zype plans to offer more data insights to its customers, which may reveal additional revenue opportunities for the companies. Zype also plans to expand its staff of 11 in the coming year. “We’ll probably double within six to nine months,” Laczynski says. “We’re aggressively hiring.”
