David Von Ancken is very, very pleased.
"I could jump up and down all day telling you how happy I am," he says. Von Ancken is the winner of an online film contest sponsored by Universal Pictures and Hypnotic.com, an Internet company that develops the work of "emerging" artists.
Since winning the contest in January, the 36-year-old former PricewaterhouseCoopers consultant has been quite busy working with Hypnotic and Universal on the $1 million movie deal he received from the two companies.
"We believe young filmmakers, if given the right guidance and opportunity, can make a film that people want to see and we believe we can make money with it," says Gene Klein, Hypnotics vice president of content.
Hypnotic is among a handful of Web sites dedicated to incubating film talent — with the belief that the next Steven Spielberg could be living somewhere in rural Alabama, miles away from Los Angeles or New York, the entertainment industrys traditional centers of power. Von Ancken, however, does live in New York.
Each of these companies functions differently, but they all face similar challenges. Selling movie projects is a rough business, even for executives who have clout and Hollywood know-how. Finding films good enough to pitch — and good enough to sell advertising against on a destination site — isnt an easy game, either.
And then theres the foul-weather front, full of twisters, which seems to be picking off a new Internet content site each day. At least one breeding ground for new talent has already been destroyed. AntEye launched last April and was gone by the end of the year. The companys chief executive, Matti Leshem, a former USA Networks executive, had grand plans of finding talent and giving them "the best deal in Hollywood" — a 50 percent cut of the sale. He was in search of music videos, TV pilots or movies to stream on his site and further develop for potential offline distribution.
Although its site is still operational, AntEye closed shop in December, another victim of capital markets that have grown less speculative. "Media businesses generally take a long time to build, and eight months isnt a long enough time to prove any concept," Leshem says. He still believes in the model, pointing to a "first-look" deal he signed with Home Box Office, and today he spends some of his time shopping around promising content he discovered on the site.
Pop.com didnt have any time to prove its concept, either. The company founded by Hollywood heavyweights, including directors Ron Howard and Steven Spielberg, closed last year before it ever launched. Execs were mum throughout the planning stages, but the site reportedly was going to feature original programming by an all-star lineup as well as works from unknown artists.
Those failures dont necessarily mean the concept is broken. Jeremy Bernard, Hypnotics founder and chief executive, has always believed in the model of nurturing talent. But he could only pursue it once he received the kind of hefty financial backing — of an undisclosed amount — that he got from Universal. In October 2000, Bernard transformed his site, reelshort.com, from a showcase for short films into the new media studio that Hypnotic is today. Hypnotics revenue sources include licensing short films domestically and abroad, advertising and sponsorship.
Bernards pitch to Universal went something like this: By taking a stake, youll get a platform for discovering and incubating talent, a place to experiment with digital distribution and a new marketing venue. For example, the upcoming Universal movie American Pie II received fabulous publicity when thousands of users competed to be one of two extras in the movie through a Hypnotic-sponsored contest.
Universal still finds talent the way it always has — through agents and producers — but Hypnotics Klein says the studio now can find filmmakers who dont fit the traditional Hollywood mold. "We give Universal access to people who are working off the beaten path in their directing style and writing style, and thats what they need us for," he says.
Miramax Films is also looking to the Net to find talent. The studio has launched an online contest, similar to Hypnotics, in conjunction with HBO, producer Chris Moore and actors Ben Affleck and Matt Damon. Miramax will give the winner of "Project Greenlight" a $1 million production budget and has guaranteed to distribute the film in theaters in early 2002. The top 10 works out of 10,000 entries are now being considered, and the winner will be announced in March.
Fresh Talent, Low Overhead
Nibblebox is another incubator armed with big-name backers and high aspirations about what could be seen as the Internets version of televisions Star Search. The company was founded by a powerful trio of college buddies: Director Doug Liman, David Bartis, formerly the head of NBC Studios, and Elizabeth Hamburg, president of Upstart Ventures, an incubator and investment firm for new media and technology companies.
"Its easy for us to recognize something outside of Hollywood that may have potential," says Bartis, who is Nibbleboxs co-CEO. The company has signed a television deal, he says, though he wouldnt disclose with whom or for what.
Nibblebox finds its talent almost exclusively at colleges, which it views as hotbeds of creativity: Think wired dorm rooms and free time. Company executives visit schools regularly and also help college radio stations get online. Nibblebox also sells ads against content created for the site and aims to syndicate shows. The young filmmakers arent compensated with much cash, Bartis acknowledges, but he says they get valuable industry contacts and free use of equipment.
"You cant try to compete with Hollywood pay scales to get someone to create content," Bartis says. "Were focused on an extremely low-cost production model; you cant justify anything other than that."
Bartis and his team work with promising creators, hoping that one day their work will be strong enough to pitch for a film or television series. When projects near that point, Nibblebox brings in mentors, who will get a percentage of the profits if the show is bought, as will the creator. Nibblebox retains the rights to the content, however.
For Nibblebox contributor and recent film-school graduate Amy Winfrey, the advantage of working with the site is clear. "The other alternative is to go to work and be animating someone elses stuff, and its great to do my own animation and story," she says.
The "get discovered on the Net" approach is also providing opportunities to amateur musicians. MusicBlitz, an online music label, has helped two of its bands get their songs played on the WB show Felicity. One of the bands also had a song featured in the movie Our Lips are Sealed. CEO Kevin Nakao says the company derives 80 percent of its revenue from licensing the works of more than 100 established artists like Aimee Mann and The Presidents of the United States of America. The rest comes from licensing works from unknown talent. The company leverages its big-name talent to sign deals for lesser-known artists.
"If youve got a model thats 100 percent unknown talent, thats usually risky," Nakao says. "Unsigned artists take a lot more work, so 80 percent of our business model is based on proven commodities."
Tonos, a music site headed by former MTV Networks executive Matt Farber, receives finders fees for bringing songwriters or musicians to people looking for talent. That revenue stream, though, hardly compares in scale to others. Tonos also sells software that enables musicians to create music online together.
The payoff from these Internet breeding grounds someday could be substantial, but so far such sites have made relatively few deals with offline media companies. Amateurs might have found hope in a recent deal between Showtime Networks and Icebox, although the struggling animated entertainment site last week said it might have to shut down due to lack of funding. The cable network had announced plans to license Starship Regulars, an animated comedy series produces by Icebox.
Showtime is closely following the Web entertainment sector, and undoubtedly other traditional media properties are, too.
"Every week Ive got a meeting and we review the most interesting stuff weve found [on the Web]," says Peter Keramidas, Showtimes senior vice president of programming and new media content. "A good idea can be found anywhere, and I look at [the Web] as another potential source for groundbreaking talent."