Michael Grotticelli /
03.11.2011
Originally featured on BroadcastEngineering.com
YouTube acquires video production company

Experts have long predicted that YouTube, the Google-owned free video distribution platform, would attempt to move beyond amateur pet and family videos to create more professional fare. Now, the company has said it would do just that.

YouTube has acquired Next New Networks, a professional Web video production company, in an effort to improve the quality of its content. The video company produces original programming and helps video creators distribute and monetize their films. The company claims to have had the two most-viewed videos of 2010, more than 1.5 billion views since its launch in 2007 and more than 5 million subscribers. The website says Next New Networks is “redefining entertainment by championing the next generation of show creators, helping build their audiences, capabilities and paths to revenue.”

“We want to make as clean a line as possible for us to build the platform on YouTube and then let the content production happen with our partners,” Tom Pickett, director of global content operation at YouTube, told The New York Times. Sources also told the newspaper that Google would pay less than $50 million for Next New Networks.

Google is under pressure to improve the quality of its programming to better compete with higher-quality Web-based video services like Apple’s iTunes, Netflix and Hulu. Google wants its visitors to spend more time viewing its content.

“There’s still a lot of YouTube that’s about the single video experience right now,” Pickett said. “We want to think about sets of videos and program experiences. That’s where we’re heading, and we think this team is going to help us get there.”

Many video creators on YouTube “are making money and doing great, but as a group, they have not added up to shake the foundations of the way people watch content,” James L. McQuivey, a digital media analyst at Forrester Research, told the newspaper. “Maybe it’s just that they’re not aggregated in a meaningful way, but as long as YouTube remains something you do between phone calls at work, it won’t change the way the industry envisions its relationship with the viewer.”

YouTube also announced it was creating a program called YouTube Next that will help the video makers with whom YouTube shares ad revenue to produce more professional content by giving them grants and training.

Next New Networks, which attracts 2 billion views a month, packages and broadcasts shows owned by others. It helps video creators with advertising, distribution of their shows to various websites and in building an audience by including shows as part of a programming package. It created the shows “Barely Political” and “Indy Mogul” and produces videos for the Gregory Brothers, whose video “Bed Intruder Song” was the most-watched video on YouTube last year. Most of Next New’s shows are on YouTube, but some appear on competing services like iTunes and Vimeo. That will continue, the company said.

YouTube also hired the former head of digital distribution at Paramount, Alex Carloss, to work on content acquisition.

Next New Networks had raised $26 million from investment firms including Spark Capital, Fuse Capital and Goldman Sachs. The company is based in New York and will remain there; YouTube is based in San Bruno, CA.



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