Reports: Google To Invest In Machinima, Other YouTube Content Partners
During its Digital Content NewFront presentation last week, Google said it would spend $100 million helping original video content producers set up channels on YouTube, in addition to committing $200 million to market these channels to consumers. Now, according to reports Monday from All Things Digital and The New York Times, Google is considering investing directly in some of YouTube’s Web video producers, including the video game content maker Machinima, which is the No. 1 brand channel on the video-sharing site.
Anonymous sources told All Things D's Peter Kafka, who broke the story, that Google is talking about taking a stake in it that would value the company at close to $190 million. Total funding for the round would be about $30 million, Kafka says, and Google would be one of the lead investors.
This would be the first time that Google has taken an equity stake in a content company. Kafka says the move makes sense because it would be like TV networks having a stake in or owning a production studio, which many do. He also pointed out that the investment would differ from YouTube pledging to pour $100 million into the creation of content partner channels, because these are loans to content makers that Google will recoup from future ad sales on those channels.
Machinima, which says it reaches 168 million unique users per month -- most of which fall into the coveted 18-34 male demographic -- creates videos for and about video game players, who watched an aggregate total of 1.61 billion videos in April.
According to an unnamed source in a New York Times report, Google is also contemplating investing in other original video content producers on YouTube, although no specific names were revealed.
As Ashkan Karbasfrooshan, CEO of the video production company WatchMojo, told the Times, Google’s potential investment in its YouTube content partners is “a bit like Zynga and Facebook getting closer.” He pointed out that Google acquired Next New Networks last year when it was the No. 1 channel on YouTube. The move made sense because Google was selling ads in its videos and giving Next New a big cut of the revenue, he said. Now, Next New staffers manage relationships with other YouTube content creators.