UPDATE: YouTube has bought Next New Networks for an estimated $50 million.
ORIGINAL: As recapped in my weekly news roundup of the web video market, the New York Times shocked the web series world with a report that Google-owned YouTube was in talks to buy Next New Networks, an independent web video studio and distributor.
The deal, even if it doesn’t go through, would be a big one for a number of reasons. Why? A few reasons, and one big one.
A Google-owned Next New Networks, known for its series Barely Political/Digital (Obama Girl, among others), Key of Awesome and Auto-Tune the News, would verify the value of short-form video and series. How would it do that?
The web video market has been plagued for years of proving its value to advertisers and the wider culture. Meanwhile, Google has been struggling to sell its Google TV platform. Blocked by the major networks, Google has been hiring executives and acquiring companies to try to add value to its Internet-TV platform. Buying NNN, whose viral series regularly top YouTube, validates the value of what NewTeeVee agrees is professionally produced content, at a time when the market has been shuffling along for years. As one exec told NTV:
“The deal, to (Machinima CEO) DeBevoise, would show YouTube’s investment in the space, as well as ‘validation that brands within YouTube really matter.'”
A YouTube deal would imply that NNN can, online, deliver higher CPMs than the site’s vast trove of amateur fare. While there’s nothing wrong with user-generated content, it has proven demonstrably difficult to create a sustainable market for anyone but a few of the top producers, no more than 100 or so — a point I’ll explore in a forthcoming article in Flow. NNN, on the other hand, is a company investing in distributing shows, in scaling short-form video. Much as television needs networks to employ the writers, directors and crew members in Hollywood on a regular basis, web video needs studio/distributors like NNN to do the same. Having the Google powerhouse behind it points to a sustainable industry that can consistently bring in new talent.
This isn’t just about “web video,” which I’m using here as a shortcut. It’s actually about short-form video, and interactive video, a format that’s proven great way for independent producers and creators to break through to wider audiences. It’s much more flexible than television or film, with much lower barriers to entry.
In a sense, then, YouTube would be doing for “web video” what networks like IFC and Sundance, along with film festivals, do for independent filmmakers: creating a space for propping up non-mainstream fare (which, by some measures, is already mainstream).
The deal isn’t just wishful thinking on Google’s part. We already have a handful of examples of networks and studios creating value from professionally produced web video, from CollegeHumor (bought out by IAC), Atom (formerly Atom Films, bought out by Viacom), Crackle (former Grouper, bought by Sony) and independents like MyDamnChannel and Koldcast. New entrants, from Mingle Media and RowdyOrbit to the activities of Paramount Digital and countless brands and Hollywood actors, are showing there is continued interest among entrepreneurs, if not advertisers.
The story is far from over. I have doubts a Google-owned NNN can offset the power content released by major networks and film studios. I don’t think it’s enough to save Google TV — and I don’t think that’s the point.
It’s also true that the NNN model is pretty hard to replicate. Like CollegeHumor and Atom, it relies heavily on “viral humor,” which is very specific and requires a lot of trial and error (perhaps not unlike television). It has a specific roster of stars and brands who are at the top of a very large pyramid. We’re still not seeing as much intense interest for more traditional web narratives that borrow liberally but more visibly from TV and film (and are typically higher in production complexity/quality), though such interest is growing.
Others believe YouTube doesn’t need to own NNN.
But a YouTube-NNN deal may just be enough to offer another kick-start to the ever-waffling market. If it’s not a game-changer, it is at the very least a very intriguing development!