Are You Building a Vertical Network?

By Ed Laczynski on July 11, 2017

At Zype, we've found that content owners who have deep audience engagement, are capable of building successful video businesses.  These content owners don’t need to be the size or scale of HBO or Netflix— they fit in the "premium long tail" of video content owners.




We call these content owners "Vertical Networks" because they have deep connectivity, from camera-to-eyeball, not just for specific audiences and fan bases, but what they care about as well. These Vertical Networks have a unique opportunity in today's video distribution marketplace to engage with their audiences directly using subscription, transactional, and advertising strategies to make money and delight fans.

Today, Vertical Networks typically live in some part of the supply chain—maybe it's a top personality on broadcast TV or satellite radio. It could be a top YouTube network or a sports league that has a rabid fan base, but lacks national distribution.  We've seen cultural and expatriate communities get activated because they couldn't get the top content from their home countries. Zype has also seen content libraries with rabid fans that have been sitting on the shelf, or otherwise not conveniently accessible.

Vertical Networks that are ready to go direct-to-consumer don't just have great content and large activated fan bases—they also have the ability (and willingness) to roll up their sleeves and invest, market, and promote their content to grow a successful business. In our experience, this is the primary line that divides content owners that want to own their distribution stack, from those that are happy with their existing platforms and regimes, and continue to work as content licensors.

Before you start thinking about building a direct-to-consumer video business, you may want to ask yourself, "Am I building a Vertical Network?"

I've found that Vertical Networks that are a likely to be a good fit for a direct-to-consumer strategy, have one or more of the following qualities:

A focused audience target in a standalone brand

Owns (rights or IP) and creates “premium quality” live or on-demand video content

An identifiable audience or fan base > 200,000 on any platform

Existing or planned direct-to-consumer relationship with no legacy MVPD requirements

A cross-geographic or expatriate audience

Have the budget and ability to market their service directly to consumers

Have a team in place (or planned) to manage creation, publishing, and distribution

If you are a content owner and you think you’re ready to build a direct-to-consumer business, rate yourself on a scale of 1-10 on each of the qualities above.

If your score is 40 or more, you might have what it takes to build a video business that is unshackled from traditional middlemen and distribution channels.

I'd love to hear what you think about this post - let me know @edla on Twitter.

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