How-To Site Should Make 'How-To Get Funding' Video

by Gavin O'Malley, Jul 23, 2009, 5:47 PM

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"How-to" video Web site 5min has closed a Series B financing round to the tune of $7.5 million. Led by new investor, Globespan Capital Partners, the round also includes existing investor, Spark Capital. The Israeli-born instructional video site encourages people to share their expertise in various categories. Based in New York, the company's strategy is to generate the high video CPMs with its growing cache of how-to content.

5min syndicates its content through its semantic video engine, VideoSeed, and its proprietary video player to Web sites such as Answers, wikiHow, Wikia and Articlesbase and hundreds of vertical sites.

The 5min platform collectively reaches a potential audience of over 200 million monthly unique visitors, and of this group, 14 million people watch at least one video per month.

5min has also built a multi-vertical content library of over 100,000 professionally produced videos through partnership with media companies such as Hearst Corporation's UGO Entertainment, Elle, Car & Driver, The Doctors, Pet Side, Britannica, Ford Models, Kiplinger, Big Think, WatchMojo, Road & Track, Woman's Day and more.

"We provide every site publisher with professionally produced content, a video technology platform, and a full video monetization solution -- all in one free offering," Ran Harnevo, co-founder and CEO of 5min. With the financing, 5min plans to grow its VideoSeed Semantic Syndication platform, which allows Web properties to inject contextually relevant content as an additional source of revenue. The platform attempts to create scalable TV channels for brand-safe content across major categories--including, business, food, health, home, garden, sports, technology, and travel.

Rivals include Howcast.com, Metacafe.com, eHow and HowStuffWorks.com, which was acquired by Discovery Communications in late 2007 for about $250 million.

With 77% of U.S. Internet users watching online video and 43% viewing weekly, the medium has hit critical mass, according to a new study by Frank N. Magid Associates.

The research commissioned by Metacafe also found that more than one-third -- 37% -- of consumers who watch professionally produced video clips online found them equally or more entertaining than watching full-length shows on their TV sets. 41% found them "somewhat" entertaining.

When it comes to advertising in online video, people expressed more receptivity than might be expected. More than half -- 52% -- found ads in video as or more acceptable than ads in TV shows. 20% found them unacceptable, and 28% weren't sure.

Gartner Research last year estimated that the "protail video" market of higher-quality niche content found on sites like YouTube and Metacafe would reach $75 million in 2008 and hit $1.5 billion by 2012. Key to such growth is establishing "clean, well-lit" places for both advertisers and consumers, according to Gartner.

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