That’s Why You Diversify: Revision3 Reaches Profitability

In any young industry, you know you’re doing well if you’re making money doing it. And today, independent web video producer Revision3 is doing very well indeed, claiming the position of the number one over the top network, with viewership increasing 165 percent and, as of the fourth quarter of 2010, achieving “sustained profitability,” with revenue growing 80 percent year over year.

Revision3 CEO Jim Louderback predicted that the company would reach profitability in the fourth quarter back in June, as it celebrated its fifth anniversary creating content aimed at the 18- to 34-year-old geeky male, exemplified by its flagship show Diggnation.

Louderback credited that growth to the company’s focus on that demographic, saying that “We didn’t stray from that, didn’t try to do shows for mommy bloggers or kids. We figured out what we wanted to do, and we’ve been very consistent.”

While Revision3 has remained focused on that demographic, it’s also built a large stable of content to engage those viewers, through partnerships with established names like The Onion, acquisitions of proven brands like The Young Turks, and home-grown franchises like Tekzilla, Dan 3.0 and GeekBeat.TV. The house that Diggnation built, in short, has grown well beyond one show — and even Diggnation is continuing on in 2011.

In addition, Revision3 continued to evolve its distribution model, not just in the mobile space with iPhone (s aapl) and Android (s goog)  apps, but onto set-top boxes and connected TVs. Rev3 is the number-one independent video channel on Roku and a top 10 channel on Boxee.

The real sign of success? Mark Cuban, no friend of web video, takes it seriously. Cuban, of course, believes that cable and VOD distribution is the only financially viable one, but according to Peter Kafka, Cuban is investing in Rev3 to get a first look at its content for potential adaptation on his cable channel HDNet. Whether or not anything comes from that deal remains to be seen, but if it does — that’s just another platform for Revision3 to expand to.

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