They have a new window on the city, but it’s their new window to the world that has Victoria-based SendtoNews poised for a breakout.
The three-year-old company has just moved into new digs on Wharf Street commanding an impressive view of Victoria’s Inner Harbour, but the deal it has in place with NASCAR for the exclusive rights to distribute video highlights online is even more eye-catching.
“It sets a new standard,” said CEO Greg Bobolo. “It really is that validation and it has accelerated all of our other discussions.
“NASCAR was brutally invasive to make sure we were the right company. Now with everyone else we are talking to on that tier-one sports landscape, there is a confidence level. They think ‘if NASCAR is OK with them ...’,” he said.
The deal means SendtoNews, a cloud-based platform that connects content from organizations like NASCAR with newsrooms around the world, will provide highlight packages to its partner publications.
SendtoNews’ partnerships with more than 1,000 newsrooms around the world sees publishers use a SendtoNews player on its site to run the highlights and the advertising that comes with it. The list of users includes CBC, TSN, ESPN, the Los Angeles Times, the Globe and Mail and Glacier Media, owners of the Times Colonist.
“It’s all advertising driven,” said Bobolo, noting the partners do not pay for content. The content comes with ads attached, most often in the form of pre-roll advertising — the 15- or 30-second ad that appears before a viewer’s desired content. The revenue is split between SendtoNews and the news organizations after costs of acquiring the rights have been covered.
Bobolo said it gives newspapers both content and ad revenue.
“The more eyes on content, the more revenue we can create,” he said, adding they are tinkering with the format of pre-roll ads to make the ad content less invasive and more custom-designed for the viewer.
“Right now, before you get this highlight, I’m taking this [time] from you,” Bobolo said, noting they have looked at ad models offering more useful, sponsored content for viewers attached to the highlight reel.
Regardless of the style of ads, it’s a model Bobolo believes can work for any organization. And because SendtoNews was able to figure out the advertising minefield laid out by NASCAR, which sells everything from every few inches on a car’s body to infield grass to its sponsors, they are prepared for all comers.
“Figuring out that rights gauntlet and how we handle the ad conflict and overlap was tough. If we can figure it out for NASCAR, we can do it for everyone,” he said.
The NASCAR deal appears to be a win-win.
NASCAR has seen its viewership drop significantly over the last five years through troubling economic times and high gas prices. The exposure will give NASCAR access to a wider audience it has been trying to reach through social media and other technology.
But most importantly for SendtoNews, it legitimizes the start-up firm in the eyes of other major sports leagues. “NASCAR is the No. 1 spectator sport in North America. We are in active discussions with 30 major sports properties right now for similar type deals,” he said, noting they already have the rights to distribute content from the LPGA and the American Hockey League.
And that means growth is coming to a firm founded by former CHEK News sports anchor Keith Wells and that earned its stripes during the 2010 Vancouver Olympics. During the Games, more than 1,400 reporters used the platform to send video to their home networks in 200 countries.
The firm currently has 22 employees, 15 of them in Victoria. The rest are in bureaus in Vancouver, San Francisco, New York and Toronto and later this summer they will open a London office.
Bobolo said he has been talking with other companies who have bureaus around the world about ways to ensure each office feels connected to the heart of the organization.
“We don’t want to feel fragmented,” he said. “Our teams start small and we grow them, so how do you connect them — that’s the challenge.”
Because of improving and steady cash flow from their existing assets, SendtoNews is hoping future rights acquisitions and expansion will be self-financed. “We are trying to keep lean and our investors happy and build as much margin as possible,” said Bobolo.
The firm has gone through two rounds of financing, raising $4 million from local investors.
For the immediate future, Bobolo sees more deals coming soon, a growing network of publishers taking the content, and a trend toward making that content hyper local and relevant to local markets.