YouTube Talking Acquisition With Next New Networks

YouTube reportedly is in discussions to acquire Web-content creator Next New Networks, a move that would mark the video-sharing site's first step into content-creation.

Next New Networks, producer of viral hits such as "Bed Intruder" and "Double Rainbow," in November launched "The One," a daily Web series for AOL's front page. The company primarily offers content composed specifically for the Web by a community of about 65 independent creators.

The potential acquisition could indicate YouTube's transition from an amateur video outlet into a site for multiple video formats, including professionally produced videos, according to the New York Times.

"It's a bet by YouTube on alternative, independently produced video," Will Richmond, a Boston-based online video industry analyst with VideoNuze.com, told the Los Angeles Times. "YouTube is saying that online video isn't just about Hollywood. It's also about the indie stuff."

YouTube, owned by Google, is most interested in Next New Networks' production success, two sources familiar with the negotiations told the New York Times. They declined to disclose price details, the newspaper reported.

The video-sharing site is extremely familiar with the three-year-old production company, which hit the landmark 1 billion view mark earlier this year, with many viewers coming through YouTube. Previously, YouTube has helped financed Web video production, Google CEO Eric Schmidt said earlier this year.

In fact, YouTube's top two videos of 2010 -- "Bed Intruder Song" by the Gregory Brothers and "Glitter Puke," a parody of a Ke$ha song, from the online show "The Key of Awesome" -- came from Next New Networks video creators.

Combined, the two videos alone had more than 110 million views, said Tim Shey, founder of Next New Networks, in a company blog.

"While these two series were a big part of our success in 2010, they also capped a year where Next New Networks grew across the board, doing over 1.2 billion video views in 2010 alone," he said. "To put that in perspective, in July we announced that we had done 1 billion all-time views since launching in 2007. In 2010, our shows were viewed on average over 100 million times per month, more than the previous three years combined."

To accomplish this, the company focused on bringing in new creative talent; developing consistent programming, not just viral hits; and optimizing how the audience watched videos online, said Ben Relles, VP of programming and development at the company.