Diller said that a “band of about 25” people within College Humor, of which IAC acquired a controlling stake in 2006, has been making ten videos a week that are gaining popularity on the Web. CollegeHumor.com had more than 6 million unique monthly users and over 80.6 million monthly page views in May, according to Nielsen. Talent from a company called CityLights will complete the troupe.

Diller compared the group’s videos to those of the early film industry, recalling pioneers like Cecil B. DeMille and saying they have the same spirit as “one reels” with a “digital sensibility.”

Diller said the films are being made for between $5,000 and $10,000 and that the members of the group can each serve in multiple roles: actor, writer, director producer. That might sound amateurish but Diller asserted, “I’ve been around programming a while. I ought to know what a decent level of production is.”

He called the venture “a new way of doing things, which in addition to being dirt cheap, is great stuff, great video, really well produced, crackingly funny.” While the new production company has its roots in comedy, it will create programming of of all genres.