Streaming video wars are giving publishers an affiliate fee bump

Streaming services, from Vudu to Fubo TV to Shudder to ESPN+, are all scrambling to sign up customers, providing an opening for publishers to take a cut. Affiliate commissions typically cost of a single month of access to a service, from $10-$12 at the low end and up to $50-$60 per signup at the high end, according to multiple sources.

For commerce-oriented publishers like Ziff Davis titles IGN and Mashable, the services represent a growing stream of commerce revenue. For smaller titles, like The Daily Dot, streaming services have quickly become the centerpiece of their commerce strategies, with up to 60% of their commerce revenue now coming from streaming service programs. Last year, barely 10% of The Dot’s commerce revenue came from streaming services; commerce makes up about one-third of the Daily Dot’s revenue.

“This is going to be a very important driver of revenue,” said Jessica Spira, vp of partner growth and management at Ziff Davis. “There’s going to be more interest [among streaming services], the offers are going to get more interesting. We see this as a growing part of our business.”

Like most commerce-focused content, traffic to this kind of content is dominated by search, as people try to figure out how to stream popular shows, live sports, or even big news events like the presidential debates. For example, an article on Games Radar this past month about how to watch a specific episode of Game of Thrones piled up over 1 million pageviews. This past month, GamesRadar had the best traffic month in its history, thanks in large part to a 170% increase in traffic to its entertainment vertical, which is increasingly focused on streaming service content.

“We’ve seen a real thirst from our users around content that is ‘how to stream [x],’” said Luke Edson, CRO of Future, which owns sites including TechRadar and Games Radar. “We’re going to ride those trends.”

For some publishers, the upside from those affiliate commissions is so considerable that it is affecting their advertising strategies. For example, the Daily Dot has experimented with turning display ads off on pages that have streaming signups on them, just so the content loads more quickly, said Brian Dresher, vp of business development at The Daily Dot.

“The sooner we get them [visitors] the information they need and how to do it, the better,” Dresher said. “That conversion is worth a lot to us.”

Commerce publishers have benefited from these kinds of developments before. For example, many were happy to take advantage of the meal kit craze, when they could grab upwards of $80 in affiliate commissions for every signup they drove from their sites.

But unlike those flashes in the pan, streaming TV and video is just getting started, and figures to grow over a much longer period of time. Over the next five years, the number of U.S. households without a pay TV subscription is expected to nearly double, to 40 million, according to the media research firm Kagan. Yet that total would only represent about a third of U.S. households, also per Kagan.

In addition, a number of high profile streaming services that have yet to launch, including Disney+, WarnerMedia’s HBO Max and Quibi are all expected to spend big to hit ambitious subscriber targets as they hit the market over the next nine months. Over the past year, Disney has been hiring to expand a team that will handle affiliate commerce for both ESPN+, which has leaned into the strategy, and Disney+.

Publishers are also hoping that affiliate commissions from streaming services give them a beachhead they can use to launch more involved advertising relationships. Just as commerce publishers were able to use affiliate commerce to coax direct-to-consumer brands into buying brand-, rather than performance-driven advertising, publishers are hoping for a similar dynamic to unfold among entertainment and streaming services.

In both cases, that process is still somewhat clunky, with the affiliate marketing and media-buying teams at brands typically operating in silos, Spira said. “It hasn’t taken off to the point where we’re doing massive joint deals,” Spira said. “But in our business, the teams [affiliate and brand] do work closely together.”

Some sites, for example, have started barring entertainment companies they have affiliate relationships with from buying their display inventory on open ad exchanges, in an attempt to coerce them into doing direct deals, which are typically more lucrative. “They know we have a high-intent audience,” Dresher said.