The politics of Hollywood — National Banana, Film Department redux

This video-content sector is getting silly, not just because it’s overcrowded.

Last week, we wrote about National Banana, a somewhat mediocre Santa Monica-based video site, where Hollywood producer Jerry Zucker, creator of Airplane! and Naked Gun, is leading the company’s production. The company received $1 million from a Silicon Valley venture firm, U.S. Venture Partners.

We’ve since been informed of another connection. Turns out, Steve Krausz, who led the investment, is Zucker’s brother in law (Krausz’ sister is Zucker’s wife.) We contacted Krausz about the unusual relationship, but he said he’d passed the investment by his firm’s limited partners for approval.

We plan to talk with Krausz more next week when he gets back from travel, but here’s what he said in response to our inquiry about the relationship thing:

The goal of the company is to create great professional comedic content for the web and other new media distribution vehicles. Jerry’s involvement is as a terrific creative resource who sees the promise of the new media allowing a mass distribution vehicle for professional content. He carries the title of Chief Creative Officer. He is very excited, but I assure you the business of the company will be the responsibility of a broad, experienced management team that will be built like any other VC backed company.

We would like to keep our precise business strategy a bit quiet for now, as you can see from the beta launch site which is more about trialing a bit of content then “final form and function”. So far we are getting excellent feedback on the early content and we expect more professional creative talent to participate in National Banana in the future.

National Banana CEO is Anthony Bettencourt, who formerly worked at US Venture Partners. He declined to comment.

Of course, none of this should be a surprise. Where can VCs turn to invest, if not to the people they know best? It happens all the time. Sequoia’s Mark Kvamme listened to his son when making the investment in Will Ferrell’s Funny or Die (scroll down), a competitor of National Banana.

And this fusion of tech investors and Hollywood is bringing all sorts of people together. Yesterday, we wrote about the bizarre relationships at a new Hollywood company called Film Department. A screenwriter with a script about Mideast politics says it got cut because of Mideast politics within the company’s board. The company, on the other hand, says the script was not seriously considered in the first place — and was cut because it was simply no good (more from the company, soon). Sequoia’s Michael Goguen , by the way, is also an investor in Film Department, although not on the board.

Should we change our name to Hollywood Reporter?