YouTube Hands Out $500,000 to Video Makers, Prepares to Spend a Whole Lot More on Next New Networks

Here’s a cutesy press stunt from YouTube: It is handing out $500,000 to some of its semi-pro video makers.

The money, doled out via 500 $1,000 credits to photography mecca B&H Photo, is meant to reward some of YouTube’s most popular content providers. And it’s supposed to remind people how fruitful it can be to provide YouTube with good content.

Google’s video site usually does that by other means. For instance, it is happy to point out that members of its “Partner” program can now make real money–in some cases, a full-time living or even more–by supplying YouTube with popular clips.

But YouTube’s most public embrace of its partners will happen if the video site ends up acquiring Next New Networks, a Web video producer/distributor dedicated to putting out low-cost, high-view videos, like the ones featuring Obama Girl or the Bed Intruder. That is, exactly the kind of videos that YouTube is rewarding with today’s handouts.

News of the sale talks were first reported in the New York Times last week. And at the time, I’d assumed that YouTube was going to be able to buy Next New at a bargain basement price, in large part because the start-up is on its third CEO in three years.

But people familiar with the company tell me that if it does sell to Google, investors who have put in $26 million will get at least a decent return on their investment. So we’re looking at something in the $50 million range at a minimum, perhaps much more.

YouTube is Next New Networks’ primary distribution partner, which makes the proposed deal a bit of a head-scratcher for some: Why pay for stuff you’re already getting?

But YouTube apparently thinks it is worth its while to lock in that content pipeline. And it’s willing to spend a whole lot more than $500,000 to get it done.

Here’s one of the YouTube partners getting $1,000 worth of new equipment: “MysteryGuitarMan,” in a clip he put out last month that has since garnered almost 1.5 million views.