The video watching consumer group is divided into the world of web-video fans and regular Cable TV viewers. Web video is extremely popular with the younger generation. The size of the web-video industry will hit critical mass someday, and Discovery Communications foresees this just in time. The Discovery Channel is announcing that it just acquired Revision3, the epic web-video company. Revision3 too, has confirmed the deal in a statement of its own.
Revision3 was founded in 2005 by Kevin Rose. Its biggest strength is the coverage of niche topics, which helped it gain a huge viewer base over a short span of time. Revision3 has a completely different business model from cable TV. Most of the content on Revision3 is produced independently, and Revision3 only takes care of marketing and distribution.
The deal will close on June 1 and all of Revision3’s 50 employees will stay. Discovery had not delved into web-video until now, and airs most of its shows on Cable TV. This acquisition, will let it better explore the world of web-video, for its business.
Discovery Digital’s JB Perrette remarks on the acquisition, saying,
We want them to continue doing what they’re doing, and to continue developing native digital talent.
We produce content on a $500,000 to $750,000-an-hour scale. Producing something at a tenth of that cost means it has to be very different.
After this acquisition, one of two things can happen. With the backing of Discovery, Revision3 can emerge as a leading web-video content provider. Discovery’s association will bring Revision3 shows better advertising deals and sponsorship. However, this is possible only as long as revision3’s current style is not disrupted in any way by Discovery. However, Discovery has some great minds in its arsenal, and with the proper management, this acquisition might just create synergy.