YouTube said to seek production company

By Claire Cain Miller and Brian Stelter
New York Times / December 16, 2010

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SAN FRANCISCO — YouTube, the video site owned by Google, is in talks to buy Next New Networks, a Web video production company, according to two people briefed on the discussions. The acquisition would be YouTube’s first major foray into original content and would demonstrate how intently it is focused on offering professional videos rather than short clips by amateurs.

YouTube and Next New Networks have not yet signed an agreement. The people who were briefed, but who were not authorized to speak publicly, would not disclose the proposed price. Both companies declined to comment.

As companies like Hulu and Netflix offer more programming online, and as Google tries to lure people to watch YouTube on their televisions through its Google TV software, YouTube is increasingly focused on providing professional content and figuring out how to attract audiences and advertisers to the programming.

Next New Networks, a start-up based in New York, was founded in 2007 to create original Web television shows and has had success with series like “Barely Political’’ and “Indy Mogul.’’

A year ago, the company broadened its focus to also play a role similar to a Hollywood producer, by scouting for new video creators and helping them distribute their videos, find an audience, and make money, through the Next New Creators program. It has 65 independent creators whose videos represent more than half of Next New Networks’ monthly viewing.

Asked last month if YouTube would consider acquisitions of Web video companies, Eric E. Schmidt, Google’s chief executive, said: “You never say never. We’ve tried to not cross that line.’’ He noted that YouTube had helped finance Web video production in the past, “but to actually own the content is an important decision.’’

In July, YouTube started playing a bigger production role itself, giving grants to some video creators to improve their operations. It also helps 15,000 content partners promote and make money from their clips.

Next New Networks has already been sending significant traffic in YouTube’s direction. In June, the start-up, which has raised $26 million from investment firms including Spark Capital, Fuse Capital, and Goldman Sachs, celebrated a milestone that is unique to the Internet: the 1-billion-view mark.

Many of those views were on YouTube.

YouTube’s two most watched videos in 2010 were from Next New Networks video creators. The first, “Bed Intruder Song’’ by the Gregory Brothers — the group that uses Auto-Tune software to remix news clips — had 60 million views. The second, a parody of the singer Kesha called Glitter Puke, was from an original show by Next New Networks called “The Key of Awesome.’’

Top YouTube videos

Top YouTube videos

A look at the most-viewed videos on the website in 2010.