September 2, 2008
Easy to Make a Show, but Not a Profit, Online Web TV Lacks Clear Formula for Success
By Brian Stelter
When the Writers Guild of America strike stopped television production last autumn and winter, Hollywood writers and producers rushed to create new scripted series for the Web, often called webisodes for lack of a more artful term. The strategy seemed simple: Make money by going straight to the Internet.Months later, they are realizing that producing Web content may be easy but profiting from it is hard. A small number of writers, producers and actors are making a living with webisodes, but they are still a long way from establishing the form alongside television and feature films. The newfound industry lacks clear business models and standardized formats.
And so far, it also lacks audiences. If average media consumers have heard of webisodes at all, it is probably in the context of "Quarterlife," a Web series that leaped to TV and flopped spectacularly in the ratings in February, or "Prom Queen," an online drama backed by Michael Eisner, the former chief of Walt Disney.
Even the medium's first hit, "Lonelygirl15," struggled to retain an audience. The "Lonelygirl" videos made their debut on YouTube in the summer of 2006. Initially, they reached millions of Internet surfers, introducing the concept of professionally produced webisodes to the public. But the videos kept coming well after the buzz faded. On Aug. 1, when the series ended with a 12-episode finale, hardly anyone noticed.
The lack of attention and advertising dollars may be an ominous sign for big media companies looking to offset lost television revenue by entering the Web video business. Nonetheless, more companies are dabbling in digital entertainment, hoping that professional Web video will stand out in a sea of user-generated content.
"Squeegees," a 10-episode series by Stage 9, a digital subsidiary of ABC, about a merry band of high-rise window washers, illustrates the challenge. The show made its premiere in April on five Web sites.
On the most prominent site, YouTube, the second episode showed 312,000 views as of Sunday, helped by prominent links on YouTube's home page in April. By the fifth episode, the view count had dropped to 3,000.
For big media companies, the revenue raised by Web shows is "not the kind of money they are used to," Herb Scannell, a former president of Nickelodeon, said.
Scannell now runs Next New Networks, a collection of niche Web video series. It is perhaps best known for Barely Political, an online channel starring Obama Girl, a flirty young woman with a professed crush on the presidential candidate. Obama Girl videos now draw at least a million views each, making them an attractive buy for niche advertisers. Still, "we're not seeing seven-figure deals yet," Scannell said. "It's still an emerging market."
The one thing the industry does not lack is enthusiasm, whether from writers, producers or actors. Webisodes are usually inexpensive to produce, costing a few thousand dollars for an episode. They are usually short, similar in length to a segment of a TV situation comedy. And they are usually distributed widely, from video-sharing sites like YouTube to social networking sites like Bebo.
Strike.TV, a site inspired by the writers' labor actions, will soon start to unveil shows by dozens of Hollywood writers. Rosario Dawson, one of the first prominent actresses to migrate to the medium, is starring in a new Web series bankrolled by NBC. And Warner Brothers is introducing an online video site, complete with a half-dozen original Web shows, at TheWB.com.
Some companies, independent of the major studios, are also casting themselves as digital studios with ambitious plans for Web production.
60Frames, which finances and distributes Web shows, has plans for 50 original series in the next year and has lined up Hollywood names, including the filmmakers Joel and Ethan Coen, the comedian David Spade and the "Oz" creator Tom Fontana.
"There's never been an easier moment to get content to an audience," said Brent Weinstein, chief executive of 60Frames. "Everybody is trying to figure out how to turn that into a business."
Perhaps the best-known webisode to come from the strike was written by Joss Whedon, the TV producer who created "Buffy the Vampire Slayer." Whedon's 45-minute musical, "Dr. Horrible's Sing- Along Blog," made its debut in July and quickly rose to No. 1 on iTunes.
Whedon explained the genesis of "Dr. Horrible" on the show's Web site, writing: "The idea was to make it on the fly, on the cheap - but to make it. To turn out a really thrilling, professionalish piece of entertainment specifically for the Internet. To show how much could be done with very little. To show the world there is another way."
"Another way" worked well for Whedon, who benefited from already having a fan base. Miles Beckett and Greg Goodfried, the co- creators of "Lonelygirl15," think they can recreate their 2006 success. Backed by $5 million in venture capital financing, the men have founded EQAL, a digital studios vying to develop the next Web hit.
Most commercial webisodes rely on video advertising before, during or after the episode or on product placement and brand integration within the show.
"Ask a Ninja," an irregularly scheduled series of comedic videos starring an anonymous ninja, now attracts $100,000 a month in advertising, licensing and merchandising; it is represented by the ad network Federated Media. "In the Motherhood," a Web show created by a marketing company, recorded an average of three million views an episode last spring, exceeding the expectations of its sponsors, Suave and Sprint.
The shows have turned a profit by tapping niches. "If your Web show has 35,000 people watching it, but all of those people are valuable to a certain advertiser, you can make good money from that show," said Dina Kaplan, a co-founder of the video site Blip.tv.
To get to the point where viewers are choosing between network television and YouTube, the industry needs better distribution models, more professional backing and financing, and third-party measurement of traffic.
The medium is missing something like a TV Guide for Web video - that magazine's owners and others are scrambling to become the industry standard. As a result, advertisers "sometimes have trouble navigating" the market, Scannell said.
Similarly, the industry needs a reliable third-party arbiter of traffic analytics, something akin to Nielsen's ratings service for television.
Then there is the living room problem. "We need the TVs in the living rooms to be integrated with the Internet," said Ron Richards, director of marketing and product management for Revision3, which calls itself a "television network for the Internet generation."
Perhaps most important, people in the industry say, Web shows need promotional support. New TV shows benefit from multimillion- dollar marketing campaigns; webisodes do not.
While the idea that webisodes should become more like television is anathema to some producers, Beckett says the medium needs a more established set of formats. "On television, there are a handful of defined formats," he said, citing half-hour situation comedies and one-hour dramas as examples. "I think formats will help codify what we are actually producing."
In time, webisodes may start to look more like TV - and TV may look more like the Web, as well. Some executives think Web video will act as a petri dish for television projects. With the barriers to entry so low online, a breakout hit webisode may be only a matter of time.
Originally published by The New York Times Media Group.
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