Y Combinator steps in to “Kill Hollywood”

Y Combinator just announced a request for startups in the media space. They see SOPA as a harbinger of the end of the Hollywood era, and are willing to fund startups that have “better ways to entertain people.” Brands have been quietly stepping in to the widening gap between viewers and television, and now it looks like the most important startup accelerator in the world is diving in as well.

Y Combinator has traditionally funded tech startups, so this is new territory for them. Their net is wide; they are accepting applications from startups with ideas ranging from “new ways to produce and distribute shows, through new media (e.g. games) that look a lot like shows but are more interactive, to things (e.g. social sites and apps) that have little in common with movies and TV except competing with them for finite audience attention.”

Money is always an issue with the production of video. First YouTube, then Netflix, and now Hulu are all spending hundreds of millions of dollars having content created…but they are all going to Hollywood for that content. This is a minor disruption that simply follows the already-happening shift of viewers from television sets to the web. Y Combinator’s announcement is something radically different, especially since they are actively seeking startups that will “kill Hollywood.” It’s pretty impossible to misunderstand their goals: http://ycombinator.com/rfs9.html.

Y Combinator’s formula is to give a select crew of startups three month of mentorship, and then organize a funding round for them. Typical Y Combinator funding rounds range from half a million to $10M per startup. While that is small potatoes compared to the money YouTube, Netflix, and Hulu are pouring into content, startups’ second round can be much higher. It’s also the nature of startups to be lean — and any startup that can come up with less expensive ways to produce quality video, or better distribution, is going to have some serious financial backing.

So keep your eyes on Y Combinator’s “Kill Hollywood” campaign and expect another player in the creation and distribution of video.

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