AniBoom is producing 20 animated short web series and will begin launching them to the public in July. Founded in 2006, the company has begun to see signs of competition from major media players who are taking notice of the market’s potential.

Last month, News Corp’s Fox said it would launch an incubation venture for new animation talent, while reality show producer Mark Burnett signed a deal with the Liquid Generation site to develop cartoon comedies for television.

Several other media conglomerates and entrepreneurs have also tapped into the Internet’s vast community of creators to try and identify the next great director of traditional feature films, or TV shows.

On Thursday, Viacom’s MTV Entertainment relaunched its AtomFilms division as Atom.com, describing it as an "online community of creators and viewers" and a source for new comedy programming across media outlets.

"The competition in a way is a good indication for that there is a market there," Shinar said. "The challenge right now for us is to take the assets we have gained and take the community of animators into the next phase."

Since its creation, aniBoom has built partnerships with video sites such as Google’s YouTube, Veoh Networks and Metacafe, as well as mobile entertainment deals with companies like MobiTV in the United States and Italy’s Buongiorno.

In March, it ran a contest with pioneering rock band Radiohead to create a video clip for its "In Rainbows" album, receiving more than 900 entries.

Shinar estimates that about half of aniBoom’s 4,000 participating animators are professionals who have made it their career, with many of the remainder working on the art form on a part-time basis.

The company has seen modest revenue from shared advertising income on featured clips across the Internet, but Shinar is betting on a bigger model for distributing entertainment if the site can launch a major animation hit.

(Editing by Tim Dobbyn)