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Alloy acquires digital studio Generate

Pair adapt network model to target youthful online auds

The sale of Generate, the studio/management firm Alloy Digital announced Thursday it was acquiring, brings Generate founder Jordan Levin back to the future.

Like the hits on the WB, the now-defunct broadcast net where Levin served as a programming exec from its earliest days, Alloy’s book-to-TV adaptations are finding traction with youthful viewers in a way few bigger media companies can match.

While Alloy may be best known for producing teen-targeted TV series including “Gossip Girl” and “Pretty Little Liars” through its entertainment division, Generate will be entirely focused on feeding its new parent company’s digital unit. Financial terms of the deal were not disclosed.

Levin’s company will be positioned within Alloy in another manner that mirrors his WB days: Generate will produce content primarily for Alloy-owned online brands while remaining free to service clients outside its parent company in both digital and TV.

But Alloy itself should keep Generate busy enough because its category-leading traffic in the 12-34 demo is fueled by a portfolio of websites structured not unlike a TV network, with an affiliate body comprised of owned-and-operated dotcoms supplemented by third-party sites that get Alloy content as well.

The new-media echoes of his old TV career are not lost on Levin. “It’s near and dear to my heart, based on the business strategy of the WB,” he said.

The WB-Alloy parallel breaks down, perhaps, in that Alloy amasses its young auds through a portfolio of brands akin to an MTV Networks as opposed to one centralized hub like a broadcaster.

Alloy needed Generate’s production capabilities to keep up with the massive scale its achieved online through websites including Teen.com, Gurl.com and AlloyTV.com. The company routinely finishes ahead of big brands from MTV to Yahoo in ComScore Media Metrix’s youth/community category.

“This just gives us infrastructure to support more growth,” said Alloy CEO Matt Diamond.

Purchase is Alloy Digital’s biggest since acquiring YouTube sensation Smosh, the third largest channel on YouTube, in 2010. Diamond indicated more acquisitions are likely on the horizon.

Generate, in turn, brings solid relationships with advertisers who have a comfort level with their competency in branded entertainment but want more reach online.

“Scale seems to be very critical to get people comfortable with increasing their spend in this space and make our business work as a larger enterprise,” Levin said.

Generate got its start in 2006 as one of the first companies dedicated to creating content online. Though it scored minor successes with webisode series like “Pink,” Generate realized quickly that it could not subsist on that content alone. Levin diversified its business into other areas including talent management; on the Web production side, it began focusing on branded entertainment, where the bills were more easily paid.

That Generate ended up as a key component of a bigger operation doens’t entirely represent a detour from its original business plan. One of its earliest backers, Velocity Interactive Partners, invested in Generate along with a portfolio of other firms active in other aspects of digital content with an eye toward eventually combining them all into one media company.

Many of the firms that came up with Generate are no longer in existence, including 60Frames.

Alloy itself was acquired by a group of investors led by Strauss Zelnick’s ZelnickMedia in 2010.

Levin and key Generate execs — including Peter Aronson, Dave Rath, Kara Welker and Jared Hoffman — will stay on with Alloy.