Next New Networks’ Next New Business Model

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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)


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