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Summary:

Instead of producing web video on its own, Next New Networks now seeks to be an incubator of talent, striking rev share agreements with independent creators who can leverage its studio, brand and marketing muscle to increase audience awareness.

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Sometime over the next month or so, Next New Networks will hit a major milestone. Buoyed by the 20 to 25 new web shows that it has brought on as part of its Next New Creators program, the web video startup will finally hit its one billionth view.

It’s a milestone that will surely register as a success for Next New Networks, which, after a CEO change, a slight reorganization and a shift in its business model, finally seems to be on track for building a scalable, sustainable business. But it’s a milestone that comes as the company has shifted away from its dream of creating compelling, quality, made-for-the-web video programming.

Over the past year or so we’ve seen the gradual shift in Next New’s business model take shape, as it either shut down or moved away from in-house production for its video properties. Some shows — like The Reel Good Show — were simply canceled, while others — like Fast Lane Daily — had their production taken over while remaining part of the Next New distribution network.

Instead of producing video on its own, NNN CEO Lance Podell said in an interview last week that the company seeks to be an incubator of web video talent, striking rev share agreements with independent creators who can leverage Next New’s studio, brand and marketing muscle to increase audience awareness. The reason for the shift is pretty simple: It takes Next New’s production costs down to nothing. And as a result, Podell believes that the company has finally landed a business model that is scalable.

In the sense that it has shifted away from web video production, Next New Networks is hardly alone. Other production houses once praised for being pioneers of the new medium — like EQAL or DECA — have evolved their own businesses, giving up on the dream of producing their own web video content altogether. Instead, they’ve become guns-for-hire, leveraging their online video expertise to create branded content for marketers and ad agencies. EQAL is no longer producing web series; it’s producing episodic commercials for major brands, with its biggest success story of late being to help shape a Philadelphia Cream Cheese campaign with Paula Deen. And DECA, meanwhile, has been using mom-centric and brand-friendly video sites like Momversation and Good Bite as springboards for branded conversations.

By all means, if that’s the best way for our web video heroes to earn their dollars, all the more power to them. But the shift underscores a tough question for the web video industry as it goes forward, which is, “Is there a model for creating quality episodic video programming on the web?” For his part, Podell doesn’t think so. “The economic model for scripted web TV doesn’t work,” he said when asked.

Related content on GigaOM Pro: A Guide To Online Video Monetization Options (subscription required)

  1. I always root for NNN! Good Peeps!

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  2. Thanks for the story Ryan. We are very proud that we’re nearing 1 bn views. We are also equally proud of those that come from the views we’ve created and those we partner with. Our newest shows are a solid mix of both. Key of Awesome (created) is nearing 80 mm views since November and Auto Tune the News (an NNC show) delivers nearly 1 mm views an episode. We remain committed to all new voices!

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  3. Is this actually Tim Street? Because this doesn’t actually sound like Tim Street, Tim Street is not prone to typos, and thus if I discover this is not Tim Street this comment will be deleted.

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  4. “The reason for the shift is pretty simple: It takes Next New’s production costs down to nothing. And as a result, Podell believes that the company has finally landed a business model that is scalable.”

    This is the funniest thing I ever read about New Media. So who pays for the content then? The creators? And let me guess, they’re planning to pay the creators downstream from CPM’s… It looks like everyone is going to the YouTube model. Blip.tv looks more like a carbon copy of YT lately. Following the lead of other companies this late in the game is not a good strategy. I smell desperation.

    “Is there a model for creating quality episodic video programming on the web?” For his part, Podell doesn’t think so. “The economic model for scripted web TV doesn’t work,” he said when asked.”

    On the contrary, this is very simple. Create something people want to see. Just don’t fill in space with ‘anything’. There is nothing online that is worth paying for except for some tv/radio shows and movies. Sony vehicles like Bannen Way are not worth .99 because the guys who made that were just looking for acting work. FYI, during the release of Bannen Way the only ads playing on Crackle were Sony ads. The point to take from this is the public in general has proven they will pay to see bad movies and buy crappy stuff, so why not bad web content? Maybe things can change if there’s value added to the content and services, and everyone can start charging for “quality” content & subsription portals like satellite radio did (and Quality does not mean ‘just spend a lot of money’). A few years ago, everyone was saying “no one will pay for sat radio”, but now look at it. Personally I’m hooked. Podell’s train of thought here is like saying you can’t create a good car because the Edsel isn’t making any money. There will be a time when people will say; “Enough of all the ad pop-ups. Just let me pay .99 and leave me alone!”.

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  5. That negative comment is not mine.

    I like NNN and Deca although I think they both owe me beers. ;)

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  6. [...] is. While the program enables the company to bring in and distribute new shows and creators, thus cutting down on in-house production, it also has created a talent pool from which NNN can draw for sponsored shows like this [...]

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