Zype Raises $2M (More) In Seed Funding To Power Profitable OTT Apps For Publishers

edZype, a startup which seeks to power publishers’ video delivery pipes, has raised $2 million in seed funding following an initial raise of $1.6 million last October.

Think of it as a “lightweight” competitor to more legacy cloud video distribution platforms like Ooyala and Brightcove. Zype provides app publishing, monetization and analytics tools and a content management system tailored for over-the-top TV.

Zype’s new seed round, led by Revel Partners, will go toward sales, marketing and research and development.

“[We] make it it easy for publishers to pull in their content from anywhere and distribute it anywhere,” said Ed Laczynski, founder and CEO of Zype.

Most clients use Zype either to support video streaming to OTT apps, to set up a subscription pay wall service or for analytics to improve user acquisition and retention.

“More than 50% of new customers are engaging with transactional video of some sort,” Laczynski said. “We’re seeing a lot of publishers with sizable followings look at setting up some sort of value exchange with the consumer, [sell] monthly, quarterly or annual passes, subscriptions or rentals.”

Publishers want to attract an audience before they pursue a monetization strategy across a plethora of apps. That’s why advertising sometimes plays second fiddle to these more “transactional” OTT video models – at least in new deployments – for Zype, Laczynski said.

In many cases, publishers that charge a subscription fee feature niche or specialized content. The Rebel Media, for instance, is a Toronto-based publisher catering to conservative news and commentary.

Founded by conservative Canadian media personality Ezra Levant in February 2015, Rebel’s main video strategy centered around YouTube, where it just crossed the 250,000-subscriber goal mark. 

Because of the Rebel’s political slant, its audience demo tends to skew older. The problem was that some avid readers didn’t keep up with their software updates.

“When we first launched, we ran into a problem where the videos just wouldn’t render on some of these older browser versions,” said Hamish Marshall, a member of the board of directors for Rebel Media. That impacted measurement, so Rebel Media worked with Zype to ensure playback was seamless with different device and browser types.

More recently, it turned its attention to OTT and launched paid subscriptions for premium video content on Roku, Apple TV and other devices.

“We wanted to create longer, TV-style shows that were half an hour or 45 minutes to an hour, that were available to premium subscribers,” Marshall said. “We settled on Zype at the beginning of the year and already have well over 5,000 paying subscribers after launching our premium membership in March.”

Rebel Media embeds YouTube videos on its site, but it plans to experiment with Zype-hosted embeds to test out pre-roll.

It’s also using Zype to target relevant videos to 22 audience “tribes” to improve personalization on over-the-top.

Among a video publisher’s biggest dilemmas is driving new user acquisition and retention, but the more relevant and valuable the content, the better the chances of driving engagement.

“We see across the board companies that are willing to cross-promote their apps, converting audiences that view and engage with their content,” Laczynski said. “OTT is a higher-quality delivery mechanism where [you can] sell through premium CPMs, but you need an engaged audience there first.”

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