YouTube confirmed today that it has acquired online video production and distribution company Next New Networks.
Does that mean YouTube is actually going to start producing its own videos? It sounds like the answer is no, according to a company blog post. YouTube says:
At YouTube, we’re focused on building a great technology platform for creators, and so we leave the actual creation of great videos to the people who do it best: our partners. This new group and the addition of the Next New Networks team doesn’t change that. But being a great platform for creators also means helping our partners get the tools and guidance they need to develop higher quality videos and drive bigger audiences to their work.
So instead of asking the Next New Networks team to create videos, YouTube says it will be become a “laboratory for experimentation and innovation” working with “a wide variety of content partners and emerging talent to help them succeed on YouTube.” To achieve this goal, the company is creating a new unit called YouTube Next.
This approach seems pretty logical. YouTube has been notoriously unprofitable for Google for years now (though there are rumblings that that’s finally changing), in part because brands were leery about putting their advertising next to YouTube’s user-generated content. That’s why YouTube wants to bring in more professional, high-quality videos. Partnerships are probably a more effective way to make that happen than creating the content itself.
The acquisition price is less than $100 million, according to The New York Times, which first reported on the deal in December. Next New Networks has raised $26 million from Goldman Sachs, Velocity Interactive, Saban Media Group, Spark Capital, and others.
Article courtesy of VentureBeat » deals