Peter Kafka

Recent Posts by Peter Kafka

Digg Dudes’ Web Studio Revision3: Layoffs Last Month, but Ad Sales Are Up

Last month, Web video studio/distributor Revision3 said the plummeting economy had caused it to cut staff and stop making and distributing some of its shows. Today, the company has a different message it wants to get out: Things are great!

The company, which is best known as a side project of Digg masterminds Kevin Rose and Jay Adelson, has put out a press release that is largely information-free. It dutifully lists the company’s accomplishments: six million show views per month, 60 ad partners, 140 million “minutes of engagement” per month, etc.

The one metric the company really should be boasting about isn’t included in the release: Revision3 will have tripled its revenues, to $3 million, by the end of 2008, a person familiar with the company tells me. Even better, ad sales ticked up significantly in the fourth quarter, even as the Web ad market began sputtering. Revision3 is on track to book more than $1 million in the last three months of 2008, I’m told.

Those results alone won’t be enough to keep Revision3 afloat: Web video remains a novelty for many advertisers, and the stuff that Revision3 makes–podcasts designed to be downloaded and watched on your PC or iPhone later on–are particularly challenging for advertisers to get their heads around.

A marketer who pays for an ad impression on Hulu, for instance, can be reasonably sure that someone actually watched it. That’s because the joint venture between GE’s NBC (GE) and News Corp.’s (NWS) Fox only offers up video for on-demand streaming, and doesn’t allow you to fast-forward past ads. But if you download an episode of Diggnation, the company’s flagship show, from Apple’s (AAPL) iTunes, there’s no guarantee you’ll actually see Rose and co-host Alex Albrecht endorse something called Brain Toniq.

But so far, at least, the pitch seems to be working. Here’s an example of what Revision3 advertisers are actually buying–a typical example of Diggnation, in which Rose and Albrecht sit on a couch, drink beer and talk about nerd things they like (Twitter) and things they don’t (Star Wars games).

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Nobody was excited about paying top dollar for a movie about WikiLeaks. A film about the origins of would have done better.

— Gitesh Pandya of comments on the dreadful opening weekend box office numbers for “The Fifth Estate.”