revision3.jpgJay Adelson and Kevin Rose, the co-founders of the news ranking site Digg, have started yet another company. Called Revision3, it is an Internet video production house that will exploit the trend toward TV viewing via mobile phone and podcasting.

Digg chief executive Jay Adelson will be interim chief executive of the new company, he told VentureBeat in a briefing last week.

It is the outgrowth of Internet video activities they’ve been developing on the side. They’ve just raised $1 million in financing, led by a $250,000 commitment from Greylock Partners, which also backed Digg and some other popular sites like Facebook. Other investors include Marc Andreessen, co-founder of Netscape, and Michael Tanne, of tag search engine Wink, Don Hutchison, of Goodmail/Excite@Home, Mike Maples, a podcasting expert, and Ron Conway.

We’ll point to the NYT story this morning as a good overview. It is worth reading, and we won’t try to replicate all of its reporting here. The NYT broke the embargo of tomorrow (at least that is what we were told), but since the NYT has run something, we are too:

Here is the full cheat-sheet. The company launches tomorrow.

In brief, Revision3 builds on a number of popular programs their team have already produced, such as geek show “Diggnation” and cooking show “Ctrl-Alt-Chicken” in an attempt to grab market share in a fast-growing area of niche TV online. They say hundreds of millions of people are ready to tap into such content; this is another “long-tail” play, an overused term, but you get the picture. Revision3 wants to profit by being early. It is called Revison3 because it is ushering in the third era in video evolution, Adelson says. The first was cable TV programming, catering to the general interest. The second was PC-based Internet video, but it had no business model, he argues.

The main audience of “Diggnation” is Digg users, which number more than half a million members, according to Adelson. Each edition is downloaded about 250,000 times, and is one of the most popular shows in the Apple iTune directory. Meanwhile, the expansion of Revision3 beyond technology matches Digg’s own effort to appeal to users outside of technology, which has had limited success so far.

Revision3 continues the experience Rose had at cable TV channel TechTV. TechTV was acquired last year by Comcast, and Adelson says the service has been somewhat neglected. He emphasizes Revision3 will produce the shows itself, and will not be an aggregator like YouTube or Podshow. It’ll have its own network, cameras, editors, producers — all designed for the iPod video generation. With syndication technology like RSS gaining ground, people can download these shows easily, whether via iTunes, TiVo or a Palm phone with Verizon, Adelson said.

The revenue model will be advertising, he said — focused on product placement, for example interrupting a show to say that it is sponsored by say, GoDaddy. He said numerous advertisers have called, wanting to advertise at Revison3’s early shows (which now number ten – see list here), but things have been so busy he hasn’t been able to sign them up. The company could be profitable immediately, but will go into the red first, he said. “The capital requirements are so low that we’re already profitable going into this round,” he said. “The intent is to go non-profitable as soon as possible, because we want to scale the business.”

Does Adelson really have the stamina to be CEO of two fast-moving companies? “Its crazy, I admit it,” he told us. But he’ll do it until he breaks, and will be looking for a CEO to take his place when the time is right. “It’s passion of mine,” he said, pointing to his life-long career in the TV industry.

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