$5 Million to Lonelygirl15 creators: What it means

People who invest in digital media and Internet video content have one belief: that creatives are gonna find a way to produce really compelling content that attracts big audiences much more cheaply than the studios. When you've attracted a big audience, advertising dollars will follow.

That has been the thinking behind Vuguru, 60Frames, MyDamnChannel, FunnyOrDie, and now, EQAL, a micro-studio formed by the guys behind the lonelygirl15 series and KateModern.

EQAL just raised $5 million from Spark Capital in Boston; Marc Andreessen, co-founder of Netscape; and Ron Conway, one of the original investors behind Google. Here's the Wall Street Journal coverage ... the NewTeeVee story .... and TechCrunch.

From Rebecca Buckman's piece in the Journal:

Todd Dagres, a partner at Spark Capital, the Boston-based firm that led EQAL's round of financing, said the studio understands that "the Web is not TV, and you can't advertise like you do on TV."

Instead, EQAL, formerly known as LG15 Studios and led by Chief Executive Miles Beckett and President Greg Goodfried, plans to weave advertising into the content of their shows, Mr. Dagres said, and also to interact with its community of viewers.

Original Content for the Web: The Big Questions

I had a conversation earlier this week with a very well-known TV writer who is working to develop a new video series for the Web. And I've gotten e-mails from a number of producers (and publicists) this month plugging new episodic projects.

I think we're seeing the emergence of professional content online that will challenge user-generated content -- something I started talking about late last year. This doesn't mean user-gen video is going to disappear, or that we won't see user-generated viral clips continue to circulate -- just that the professionals are now serious about trying to reach viewers, build long-term relationships, and make money on the Web.

Earlier this month, Brett Weinstein of UTA announced 60Frames Entertainment. You've also got Michael Eisner's Vuguru and Next New Networks, founded by Herb Scannell of MTV. Plus:

- Ryan Bilsborrow-Koo and Zachary Lieberman just launched an "urban western" called "The West Side."

- Nerve Video has a sexy new series called "Tight Shots."

- AmericaFree.TV is doing a series called "Custody."

- Nickelodeon debuts its first original Web series, "Nick Cannon's Star Camp," on July 22nd at www.turbonick.com. There are five 15-minute episodes, culminating in a televised finale on August 26th.

Some of the big questions that haven't yet been answered:

- How much advertising will viewers tolerate? How "interruptive" will it be (IE, will it be small logos in the corner of the frame, or 15-second commercials that run before, during, and after the video)?

- How much can you spend on production and still expect to earn a profit? Will a new aesthetic emerge?

- We know that good writing will be important. But how important will recognizable stars be?

- How will creators make their stuff "appointment viewing"? It's one thing to get a viewer to subscribe to a stream of videos by e-mail, or some form of RSS, but actually keeping them engaged and getting them to watch is a tougher challenge.

If you compared the development of professional Web video to television, we'd still be pre-Uncle Miltie.

Some history:

In 1948, NBC moved Milton Berle's "Texaco Star Theater" from radio to television. By 1949, Berle had become television's first big-name star, and was credited with causing the sale of television sets to double that year.

While there have been lots of original shows created for the Web, we don't yet know who the Texacos will be (the sponsors for this new kind of content) or the Uncle Milties. I don't think we've hit an inflection point yet for professional video content online.

But it could be close.

60Frames Entertainment: Model for a New Kind of Studio? Plus, Disney movies on Xbox

- Ad Age reports that Brent Weinstein, head of United Talent Agency's digital division, is starting a new venture in partnership with Spot Runner, an online advertising firm. It'll be called 60Frames Entertainment, and has an initial bankroll of $3.5 million, according to the WSJ.

The idea is to fund professionally-produced short-form comedic content for the Web. Spot Runner will sell ads around the content. This is similar to what Barry Diller has been up to, Michael Eisner's Vuguru, or the Atom Films Studio.

All these experiments, it seems to me, are essential to figuring out how a next-gen TV "network" or movie "studio" will work: how it will identify and fund cool content, support creatives, structure the costs of production, market the finished product, and spin it off from the Web into other media. One important milestone that probably isn't more than a year away: a Web series that attracts a big enough audience to get a movie greenlit. We've already seen an animated cell phone series spawn a TV show, after all.

Here's the official press release.

- About 35 Disney movies, including 'Aladdin' and 'Armageddon,' are now available on the MSFT Xbox. WSJ story...LA Times. The Times notes that there had previously been 192 movies from Warner Bros., Paramount, Lions Gate, and New Line, and 179 TV shows available on Xbox. From the story:

Xbox Live's users can rent high-definition versions of new release movies for $6, or $4 for standard definition. Older movies are $4.50 for high definition, $3 for standard.

Once downloaded, consumers have 14 days to begin watching the films before they are erased from the console's hard disk drive.

ShoWest opens in Vegas ... Eisner dips into Web content production ... What's happening at ClickStar?

- Gregg Kilday of the Hollywood Reporter is blogging from ShoWest in Las Vegas, the annual conclave that brings together theater owners, studio execs, and lots of vendors. The Reporter also has a few ShoWest stories: Dolby's new 3-D system will compete with the system made by Real D. (Here's Dolby's press release.) A satellite services company called Microspace will be beaming the feature 'Disturbia' to ShoWest for a Tuesday screening. And finally, NATO head John Fithian admits he was wrong about the revenue potential of digital 3-D:

"I'm willing to accept the fact that I was wrong because I did not believe that 3-D would be as big of a catalyst as it is now," John Fithian, president of the National Association of Theatre Owners, said in The Hollywood Reporter's ShoWest roundtable. "3-D is becoming a much bigger value add than I originally thought. 'Chicken Little' and 'Nightmare Before Christmas' blew the socks off all our members. When you can take a product that's been around for a while and bring it out and make $9 million, that's impressive."

- Michael Eisner is launching a digital content development studio called Vuguru, according to The Wall Street Journal. (The LA Times also has coverage. From the Journal's piece:

"Vuguru's goal is to be the leader in producing high-quality, story-driven content for the Internet that up until now could only be found in movie theaters or on television," Tornante said. [Tornante is Eisner's private investment company.]

"In the past few years, the development of exciting and innovative digital media platforms and technologies has outpaced the creation of truly great content," Mr. Eisner said. "Vuguru will produce and showcase original and third party content in all genres and formats to meet the new demands of the evolving media landscape."

Here's a look at their first project, Prom Queen, which will consist of 80 episodes, each 90 seconds long. It'll show up on Veoh ( a video site Eisner has invested in ), as well as YouTube and other sites. Pretty cool experiment, but one question: how will Vuguru place advertising on the clips it posts to YouTube?

- ClickStar, the site that is a joint venture of Intel and Morgan Freeman's production company, Revelations Entertainment, has split with its interim CEO, James Ackerman, according to Variety. Lori McCreary, Freeman's co-producer at Revelations, will take over as CEO. (ClickStar's original CEO, Nizar Alibhoy, left last January.) Ben Fritz of Variety writes about the next Internet feature ClickStar will release:

Company hopes to get a second boost from "Lonely Hearts," an indie pic that will be available for download at ClickStar on April 27, two weeks after it hits theaters. True-crime story, which Roadside Attractions and Samuel Goldwyn Films are releasing, is written and directed by Todd Robinson and stars John Travolta and Salma Hayek.