YouTube's effort to buy a New York producer of Web content would help the company cement its status as the Internet's start page for online videos as it faces an increasingly competitive environment.
YouTube, a unit of Google Inc., is in talks to acquire Next New Networks, whose pithy Web flicks have garnered more than a billion views on YouTube and elsewhere, according to sources knowledgeable about the discussions. Possible terms weren't disclosed.
The potential acquisition would give YouTube its first step into producing its own videos, signaling its seriousness in transforming itself from a site for amateur videos into a comprehensive destination for all online films, including professional works.
In the case of Next New Networks, the content is produced by a burgeoning class of filmmakers —- semi-professional videographers who focus solely on the Web. Two of the company's videos, "Bed Intruder Song" and "Glitter Puke," were the two most-viewed videos uploaded to YouTube this year by artists not signed to a major record label, garnering more than 110 million views.
"It's a bet by YouTube on alternative, independently produced video," said Will Richmond, a Boston-based online video industry analyst with VideoNuze.com. "YouTube is saying that online video isn't just about Hollywood. It's also about the indie stuff."
Founded in 2007 and financed by Spark Capital, Goldman Sachs and Velocity Interactive, Next New Networks bills itself as "TV for the Internet." And similar to a TV broadcast network, the company operates 16 separate channels, such as Channel Frederator, which features cartoons, and Hungry Nation, which has videos on food and cooking. Next New Networks' videos have attracted 1.2 billion views so far this year.
Although Next New Networks produces some of its own videos, the vast majority were created by independent filmmakers via its Next New Creators program. The company distributes those videos in exchange for a share of the advertising revenue. "Bed Intruder Song," for example, was created by the Gregory Brothers, a New York-based band that found success via viral online videos much the same way that Ok Go, a Grammy-award-winning rock band, made its name.
It's the company's network of independent filmmakers that YouTube is most interested in, according to people familiar with the negotiations.
Since its purchase by Google for $1.65 billion in 2006, YouTube has strived to improve the quality of the videos posted on its site as a way to boost views, as well as bolster the amount of advertising it collects from those views.
Acquiring Next New Networks potentially accomplishes both, because the company has proved that it can amass and incubate a network of independent videographers that generates a constant stream of viral videos.
YouTube and Next New Networks declined to comment on the discussions.