MTV Networks Nets iFILM for $49 Million

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With MTV Networks’ acquisition of iFILM, random videos ranging from “stupid rifle tricks” to raunchier content such as Paris Hilton flashing a camera will join the company’s stable of music videos on the Internet.

MTVN acquired the seven-year-old iFILM last Thursday for $49 million cash.

The deal follows MTVN’s $160 acquisition of Neopets Inc. — a children’s site that allows kids to take care of virtual pets in “Neopia” — last June.

iFILM focused on independent films in its early years, but the advertising-supported Web site has shifted recently to running humorous and titillating videos submitted by Internet surfers. (For more on Web video, see Spotlight, page 22).

In August 2000, Rainbow Media Holdings bought a 5% stake in iFILM, and the company’s Independent Film Channel and iFILM developed a 26-episode, half-hour TV series that ran on the network in 2001.

MTVN has stepped up its focus on driving new ad revenue over the past year by distributing more programming on the Internet. In April, it launched a video-on-demand channel on MTV.com called MTV Overdrive, featuring music videos, news programming and movie clips.

MTV Overdrive runs 15-second commercials before video clips. iFILM runs spots for movies and other products before each of its clips, ranging from 15 to 30 seconds.

“With iFILM’s strong business profile and growing traffic, we see significant opportunities for us to increase our online advertising revenue,” MTV Networks chairman and CEO Judy McGrath said in a statement.

According to Internet traffic rankings on Alexa.com, i- FILM ranked as the 646th most-popular Web site over the past three months. The site attracted 1,200 Web surfers for every 1 million Internet users and averaged 4.5 page views per user over that span, according to Alexa.com.

iFILM delivers more than 30 million video streams per month to Web surfers, according to MTV.

MTV said that iFILM CEO Blair Harrison will continue to run the company, reporting to MTV Networks senior vice president of digital music and media Jason Hirschhorn.

iFILM will remain at its Hollywood headquarters.

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