AOL acquired StudioNow, an online video company for $36.5 million in cash and stock, in order to accelerate its investment in content technology and platforms. With the acquisition, which closed on January 22, AOL has aggregated more than 3,000 editors, videographers and creative individuals to provide on-demand video content. It will also provide management, storage and syndication services to clients. AOL intends to integrate the video platform into its existing Seed.com content management system.
“Premium original video creation is a fundamental part of AOL’s strategy to offer consumers world-class, stimulating content at scale and the integration of StudioNow into Seed.com will enable us to increase our video content/offerings significantly.” said Tim Armstrong, AOL CEO and Chairman, in a statement.
That is no surprise, given the growth in online video. U.S. online video advertising spending will increase from $734 million in 2008 to $5.2 billion by 2014, according to eMarketer.
The deal means StudioNow has exponentially expanded its reach. “This new chapter for StudioNow presents a tremendous opportunity for our growing professional creative network to reach new audiences, diversify their assignments and increase their income as the number of projects coming from the numerous AOL properties will create a surge in video assignments,” said StudioNow’s co-founder and CEO David Mason, in a statement.
AOL benefits in other ways, including the advertising front. The company expects to leverage StudioNow’s technology and resources to complement the ongoing work of its in-house studios, both for AOL productions, which creates original video programming like AOL Sessions, Unscripted, Moviefone Minute and the Engadget Show, and for its branded advertising and content partners.
Separately, AOL announced it will open the New York Technology Center, led by new hire, Jeff Reynar, CTO. The company said Reynar was tapped to focus on innovation for AOL’s content business and will lead efforts to “make New York another hub of AOL engineering talent,” according to a statement.