YouTube Buys Next New Networks, a Video Producer
SAN FRANCISCO — YouTube, the video site owned by Google, formally announced on Monday that it had acquired Next New Networks, a Web video production company, in its biggest effort yet to move beyond short, quirky home videos to professionally produced content.
Context & Ripple Effects
The acquisition is the latest step in a four-year arc of YouTube shedding its home-video-only identity. Under Google's ownership since the early-2007 integration push, the site first licensed studio fare with its Sony signing in April 2009 and then experimented with local news programming that August.
Buying Next New Networks goes further than licensing: instead of renting professional content from studios, YouTube now owns an in-house producer that can manufacture it. The deal also fits Google's stated posture at the time — its deals chief had just said the company would stay very active in acquiring start-ups despite rich valuations, after missing out on Groupon.
First-order effects
- YouTube gains an internal production capability, letting it commission and package professional shows rather than depend entirely on user uploads and studio licensing deals.
- Next New Networks' producers and its slate of web series now sit inside Google, giving the site a template for how branded, ad-supported video channels get built.
Second-order effects
- Studios and media companies that were negotiating content licenses with YouTube face a counterparty that can now make competing programming itself, shifting leverage in future licensing talks.
- Rival video platforms and independent web studios must respond to YouTube moving down the value chain — either by courting producers more aggressively or by building their own original slates to keep ad dollars from consolidating around YouTube's owned inventory.
Third-order effects
- If the pattern holds, online video platforms evolve from neutral hosting utilities into vertically integrated media companies that own production, distribution, and advertising — reshaping who captures the economics of professional web video.
- A platform owning its content supply invites closer regulatory attention to whether video search and recommendation favor in-house properties over third-party creators.
The trend: Video platforms are buying their way from aggregators of other people's footage into owners of professional production, with Google's YouTube leading the shift.