With music and sports publisher partnerships, ZEFR cements its position as the dominant YouTube monetization platform for enterprises

By Michael Carney , written on April 26, 2013

From The News Desk

When ZEFR announced its rebranding in August, moving away from from its initial name MovieClips, it wasn’t some half-baked marketing gimmick, or the desire  for a more startup-y name with fewer vowels. Rather, it was part of a master plan that involved the company parlaying its success in managing Hollywood studio movie content on YouTube into doing the same for television, music, and sports content.

Today, the company has announced the first fruits of that labor in the form of global partnerships with Universal Music Group (UMG), Sony Music Entertainment, Ultra Music, and NASCAR, among others that it wouldn't name publicly. These are in addition to existing movie studio partnerships with Fox, MGM, Paramount, Sony, Universal, Warner Brothers, and others.

Over the last two years, ZEFR has evolved from a standalone destination site for discovering premium movie content, to an owned and operated YouTube channel, to an enterprise content rights management and monetization platform for the YouTube ecosystem. The company has built a complicated technology to identify and claim infringing content posted to YouTube by third parties, and then subsequently serve ads against and drive traffic to that material. In a sense it makes piracy work for the Hollywood studios that have long complained about it, hijacking the video clips that were first hijacked from them.

For rightful content owners, this is found money, and an invaluable tool to drive engagement. For YouTube, it’s a way to keep more premium content on its platform and to incent premium content creators to look at the online video platform as a legitimate monetization channel.

Its NASCAR relationship is unique, relative to the others, in that ZEFR is offering the motorsports publisher channel management services. This means that in addition to managing the existing NASCAR content on YouTube, included that posted by the brand and that posted by third-parties, the company will use the learnings from its own highly successful owned and operated channel to help strategize and execute NASCAR’s future content strategies to drive maximum engagement and monetization.

Among its tools and tactics for driving engagement, which it collectively calls ContentID, ZEFR will take the brand’s existing content and break it down into topical bite-sized pieces, and then tag and annotate those content assets according to a sophisticated taxonomy. The company will then SEO optimize and publish that content among topical playlists and within postroll content ads. The strategy has worked well enough to grow ZEFR’s own MovieClips channels to more than 2 million subscribers, a figure that grows by more than 17,000 each day.

ZEFR uses a combination of sophisticated computer algorithms to measure and analyze each video clip for and a team of flesh and blood humans in sunny Venice Beach to put “real eyeballs” on every piece of content before it enters the system. Many of the company’s current tools, some of which it has yet to debut publicly, have been built at the request of its enterprise clients.

“YouTube needs to be altruistic and build products for everyone,” co-founder Zach James says. “But because we’re focused on just the enterprise, our technology can be much more customized. And because we’re supporting the global media company customers that YouTube covets, it’s a win-win-win.”

The Los Angeles startup has raised a total of $28.5 million across three rounds of financing from investors including U.S. Venture Partners, MK Capital, Shasta Ventures, SoftTech VC, First Round Capital, Richmond Park Partners, and other angels.

In its three plus years, ZEFR claims it has never lost a single customer, so its clientele must be getting some value from the service. Because it built its technology and business model stealthily out of the public eye, it has a head start on potential challengers. And it's bagged some big enterprise elephants, which others would have difficulty replicating. Finally, YouTube has willingly outsourced the development of advanced content rights management tools to ZEFR, making it unlikely that it will one day choose to compete.

As ZEFR expands beyond movies into the full ecosystem of premium video content, its position as an enterprise platform for YouTube publishers gets more cemented. This relationship with Youtube is a double-edge sword. As long as YouTube fulfill its promise as the future of video entertainment, ZEFR is along for the ride, stacking its business on top of Youtube's. Dependence on one platform, though, always offers risk. What if the studios decide that they no longer want their content on the platform? That's not likely, of course, but anything is possible.