N3: Bringing Order to Online Video

Next New Networks aims to emulate the success of cable TV programming by creating new content, building an audience, and attracting advertising dollars

One recent Friday evening, Herb Scannell, the former MTV Networks (VIA) chairman who turned Nickelodeon into a powerhouse, was heading home when he poked his head into a room that was being remodeled for his growing New York company. He stopped short. An employee was handcuffed to a chair, while another stood over him, a naked light bulb swinging behind them. Corporate security run amok? Nope, just the filming of a parody interrogation to run on Scannell's new online video startup, Next New Networks.

Next New Networks, or N3, is part of an emerging group of companies that are attempting to create a kind of TV network for online videos. By pulling together elements of video blogging, audience submissions, and a big dollop of branding, the ad-supported N3 plans over the next three years to build a network of 100 super-niche channels on everything from news to pets. To start, this new Internet take on the TV studio system—N3 launches on Mar. 8—will feature six channels on subjects ranging from do-it-yourself clothing to comic book news.

Short and snappy, some of the channels' 3- to 11-minute shows combine hired hosts and audience video submissions. Others are mostly clips submitted by viewers, such as car chases, that N3 mashes into edited shows with its own videos. N3 is also scouting talented bloggers or video bloggers and hiring them or licensing their content. Just don't expect to see shows with $1 million-per-episode production budgets. This is programming that resides squarely within the tradition that's emerging online: low-budget shows that get made with audience help.

Market Mingling

Behind this effort is a high-powered crew assembled by Fred Seibert and Emil Rensing and funded with $8 million from venture funds Spark Capital and Benchmark Europe, and individuals including MTV co-founder Bob Pittman. Seibert helped create the notion of branding cable channels through his work launching MTV, and he turned around Hanna-Barbera by creating new cartoon series such as Dexter's Laboratory and The Powerpuff Girls. Rensing, an early America Online employee, met Seibert during the dot-com days. In 2006 they launched two online video series: VOD Cars, a podcast that mashes together car clips, and Channel Frederator, a cartoon podcast.

N3 is a bid to make sense of digital video's Wild West for viewers and advertisers alike. To find original videos online now, video addicts must troll through a sea of clips at YouTube (GOOG) or MySpace (NWS), or work to uncover standout original video series, such as Ask a Ninja or Ze Frank, that run daily or weekly. Advertisers, meanwhile, are trying to figure out whether it makes sense to market on niche video blogs. And they're grappling with how to target the right audiences on mass sites where a video of a teenage brawl sits next to a clip of a sleeping kitten. "This is what is needed, bringing order out of chaos," says Art Sindlinger, a vice-president at ad agency Starcom USA.

Inspired by the popularity of pioneering online video shows, N3's creators hit on the idea of creating a broad network. But they knew they needed a team that combined TV programming smarts and Internet community knowhow. Seibert wooed Scannell, who launched the popular Dora the Explorer and Spongebob Squarepants franchises. After 26 years in TV, Scannell was eager for a return to the excitement of cable TV's early days, when creators could break out. Seibert also tapped Jed Simmons, who ran the Sundance Group, while Rensing brought in Tim Shey, who last year started consulting with video bloggers after a stint working at Rocketboom. "We're taking the essence of video blogging and applying more dependability and branding," Seibert says.

Work in Progress

For all its promise, N3 has plenty to prove. It will essentially be creating a market from scratch. Though Internet video marketing is expected to grow to $4.1 billion by 2011, indie video series have had little success attracting steady advertisers. To make advertising work, N3 has to create new types of ad formats and mechanisms for tracking the videos with which they air. That will mean developing everything from two-second spots to devising a way to insert marketers' videos into their show mashups. And they are developing dashboard-like systems so that they can track their different audiences and metrics across a variety of sites, including YouTube and Joost, the new video service from Skype's (EBAY) founders.

N3's founders will also keep their machine humming by figuring out how to cultivate a community and package submissions into video podcasts on a mass scale. And they will need to experiment with a wide variety of shows and community-building to attract a hefty audience. "It's the first minutes of this new medium, and we don't know how this model is going to work," says Jeff Jarvis, a media consultant who recently started two new video series of his own. But increasingly, Internet TV networks are where innovation is happening. And N3's principals readily admit that their venture is the definition of a work in progress, the kind of project that's at the heart of their goal: to play a role in the birth of Internet TV.