VentureBeat is reporting that the San Francisco-based startup, Revision3, has raised a further $8million of funding, bringing their total investment to $9 million. Revision3 concentrates on producing niche online video content such as the geek news show, Diggnation, and the cooking series, ‘Ctrl-Alt-Chicken’. The company’s founders include Kevin Rose and Jay Adelson, the same team behind the hugely popular social news site, Digg.com.
What makes this news particularly significant is that it’s is a substantial investment in content rather than a distribution platform (as is the case with most other Internet startups such as Joost or Veoh for example).
A few more key take-aways from the VentureBeat article…
- The company is claiming over 2 million downloads a month.
- Two of the company’s ten shows are already profitable.
- The shows make money through sponsorships, with their hosts taking periodic breaks from programming to discuss sponsors in a “conversational” way.
- Sponsors to-date include GoDaddy, Sony, Microsoft and Verizon.
- The company as a whole is not yet profitable.
- The majority of viewers are downloading shows via RSS subscription through software such as iTunes.
Inevitably, some are questioning whether Revision3 needs a further $8million when its production budgets are minimal (most shows consists largely of ‘talking heads’), although with two million downloads a month, bandwidth costs won’t be insignificant.
What’s clear is that $8million will buy Revision3 quite a bit of time to make the remaining eight shows profitable and to launch others. If we compare the company’s strategy to that of a record company where a number of acts are invested in but not all are expected to make it, it’s likely that certain shows will eventually be dropped to be replaced by others. This is also similar to the way blog networks such as Weblogs Inc. (bought by AOL) operated in their early days. The extra time allowed by the additional investment will also enable Revision3 to get their content onto other emerging distribution platforms (Joost or Babelgum maybe?), as well as build further relationships with sponsors.
Along with investing in the talent behind and in front of the camera with their ability to reach various niche audiences — similar to CBS’ reasoning behind its acquisition of Wallstrip (see our coverage), Revision3’s investors are backing the company’s expertise in executing a platform agnostic distribution strategy.
From Revision3’s website:
With the proliferation of mobile video, iPods, Tivo and other Internet-connected set-top-boxes, video that is both on-demand and tailored to suit will be Revision3’s specialty…
Revision3’s philosophy on content is neutral to how it is distributed. We will work with almost any distribution platform; iTunes, Odeo, Bittorrent, Palm, you name it…and using every video encoding format available… making our content accessible to the greatest possible audience.
Related post: CBS buys video blog Wallstrip