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Digital Dealmakers: Kip McClanahan

Jul 15, 2007  •  Post A Comment

The player: Kip McClanahan, CEO of ON Networks, a new-media production and distribution shop in Austin, Texas.
The play: ON Networks is part of a crop of emerging companies producing and licensing short series for new venues such as the Web, mobile phones, the Xbox and Apple’s Apple TV, iPhone and iTunes. ON Networks counts about a dozen Web series in its lineup, including “Golf Tips” and “ON Dating,” produced for ON Networks by NBC. The company plans to expand to 20 shows by the end of the month, focusing on three- to eight-minute videos that are instructional and/or entertaining, Mr. McClanahan said.
The pitch: ON Networks shoots all its videos in high definition, which future-proofs the videos and allows for a better quality when down-converted to standard definition. ON Networks targets specific areas of interest, such as cocktails, golf or online dating. Mr. McClanahan operates the company according to “the scalable studio model.” That means ON Networks brings producers and editors into a sort of “virtual co-op” and shares revenues with them. “We only work with professional content creators—folks doing ads for ad agencies in town, for instance,” he said. ON Networks then syndicates or licenses the content to media companies, distributors or Web sites.
The money guys: Mr. McClanahan funded the company himself and plans to announce both strategic and venture partners later this summer. ON Networks makes money by selling the video series to distributors and via advertising. Mr. McClanahan declined to disclose a time frame for profitability.
The pros: The Web has expanded the opportunities for small production shops to distribute their videos.
The cons: On the flip side, competition is intense and online video is becoming ubiquitous, making it difficult for any one firm to stand out.
In the mix: ON Networks competes against other online production studios such as Vuguru, Next New Networks and Pixel Corps.
Backstory: Mr. McClanahan founded the company in February 2006. “The goal was to get in there and deliver compelling content in a way that is different and valuable,” he said. “We believe pretty strongly in the notion of the long tail.” He likes working away from the traditional production centers of New York and Los Angeles. “It’s kind of healthy to be outside of the system,” he said. “There is a lot of baggage that traditional media carries along with it.” The company has 15 employees.
Background: Mr. McClanahan was born in Hampton, Va., and raised in several places, including Okinawa, Japan, and Oahu, Hawaii. He studied electrical engineering at the University of Texas at Austin. He previously was CEO of a security software company and also held posts at Cisco, Dell and Motorola. He is 38 and married with two kids and has lived in Austin for the last 25 years.
Who knew: In college, Mr. McClanahan was a lead singer and guitarist for an alternative band called Needle’s Eye.

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