June 30, 2008
Google Backs a New Show on the Web ON ADVERTISING
By Brooks Barnes
Google, which has largely stayed away from producing its own content, is experimenting with a new method for distributing original material on the Web, and some Hollywood film financiers are betting millions that the company will succeed.
The innovative part involves the distribution plan. MacFarlane cut a deal with Google under which the company will syndicate the program using its AdSense advertising system to thousands of Web sites that are gathering places for MacFarlane's target audience, typically young men. Instead of placing a static ad on a Web page, Google will place a "Cavalcade" video clip.
Advertising will be incorporated into the clips in varying ways. In some cases, there will be "preroll" ads, which ask viewers to sit through a TV-style commercial before getting to the video. Some advertisers may opt for a banner to be placed at the bottom of the video clip or a simple "brought to you by" note at the beginning.
MacFarlane, who will receive a percentage of the ad revenue, has created a stable of new characters to star in the animated series, which will be served up in 50 two-minute episodes.
For a more substantial fee, MacFarlane has been working with advertisers to animate original commercials that will run with "Cavalcade." Although they would not reveal any of the advertisers, both Google and MacFarlane said several deals were among the largest in the history of AdSense, which made its debut in 2003.
Google until now has only dabbled with distributing original content. In May, it announced a deal with The Washington Post to distribute real estate listings from the newspaper's Web site in a similar manner.
But the partnership with MacFarlane marks a bigger step into the distribution business, one that, if successful, could send shock waves through the entertainment business. "Cavalcade" is not only from a high-profile Hollywood talent, but also carries a multimillion-dollar production price tag, which is by far the largest amount spent on original Internet content to date.
"We feel that we have re-created the mass media," said Kim Malone Scott, director of sales and operations for AdSense.
Until now, budgets for original Web video programs have generally peaked in the low six figures, because creators have not been able to figure out a business model that allows for higher spending. Either advertisers have not wanted to pay, or it has been too difficult to attract a large enough audience to support the cost of television- or movie-quality work.
But Media Rights Capital, a boutique production company that invests about $400 million a year in movies, television and Internet episodes, thinks it has figured out a sustainable business model with the Google Content Network. Every time someone clicks on one of the syndicated videos, the associated advertiser pays a fee, with shares going to MacFarlane, Media Rights, Google and the Web site that generated the click.
"We believe the revenue could be formidable," said Karl Austen, a lawyer who worked on the deal. "What is exciting is that this is a way to monetize the Internet immediately. Instead of creating a Web site and hoping Seth's fans find it, we are going to push the content to where people are already at."
Media Rights sells the advertising inventory. Asif Satchu, the company's co-chief executive, would not reveal how much advertisers were being asked to pay, except to say that it is "significantly higher" than if they were placing the same ad with AdSense.
Endeavor, a Hollywood talent agency, helped shepherd MacFarlane through the negotiations, which got started during a recent gap in the animator's contract with 20th Century Fox. MacFarlane said he wanted to take a stab at an original Internet program because he was feeling constrained by the "taste police" - the Federal Communication Commission.
Sitting in his office wearing jeans and a white T-shirt, MacFarlane described feeling stifled as a comedian by a crackdown in recent years on what the FCC saw as unsuitable language and stories on American television. MacFarlane said he believed that the public's appetite for raunchy humor and coarse language was only expanding and that television networks like Fox were having a harder time, in part because they had to tread carefully.
Each "Cavalcade" installment is different, a typical one titled "Mad Cow Disease." The clip, which is 38 seconds long, opens with a news anchor reporting on an outbreak of the disease in a dry fashion, detailing the debilitating effects of eating tainted beef. The clip cuts to a bull and a cow seated in a tidy kitchen with giant steaks on their plates.
MacFarlane, 34, has more at stake than just adding some more money to his already sizable fortune. (His new contract with Fox, signed this spring, is valued at nine figures.) Part of the goal is to use the venture as a testing ground for new material and a way to ignite attention. At the very least, "Cavalcade" will become a DVD, but the hope is that part of the series will register with audiences and perhaps lead to television or even animated movie projects.
Indeed, in a watch-what-you-want, when-you-want world, the standard processes of rolling out new television programs is breaking down. Even a decade ago, putting a new show on a network schedule would ensure wide exposure; people would either respond or they wouldn't. Today, with dwindling television ratings, creators like MacFarlane have to find new ways of introducing new material.
Nobody knows how content can catch fire in unexpected ways more than MacFarlane. In 2002, "Family Guy" was canceled for poor ratings after running for three seasons. But the irreverent series continued to make new fans through DVD sales.
In 2005, the network reversed itself, citing strong DVD sales, and "Family Guy" has gone on to be one of the biggest comedy hits on American television.
Originally published by The New York Times Media Group.
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