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Such onetime high-profile visionaries as Thomas Middlehoff, Jean-Marie Messier and Robert Pittman have lately departed their firms in droves, leaving corporate spectators to wonder whether broadband is broken. Messier's vision of seamless media convergence may still have life at Vivendi-Universal, however.
Vivendi subsidiary MP4.com is taking a retro route to the future, featuring Web-based short films and animations -- better suited to Internet downloads and streaming than full-length feature films, and first introduced to the Web by pioneers like Mika Salmi, founder of AtomFilms, in 1999.
"We want MP4.com to do for digital video what MP3.com (which Vivendi-Universal acquired in 2001) has done for digital music," Natasha Rabe, general manager of MP4.com, told the E-Commerce Times. "MP4.com will be a destination, community and hosting service for amateur video hobbyists, independent filmmakers and animators, as well as a promotional platform."
In the Beginning, the End Was Near
Some 125 small firms with venture funding and advertising-based business plans, such as AtomFilms, Hypnotic and Cinemanow, once dominated Internet-based film and animation distribution, but the dot-com doldrums claimed all but about 10. High-profile startups -- including New York-based Pseudo and Los Angeles-based DEN (Digital Entertainment Network) -- suffered painful public flameouts that stifled investor enthusiasm.
"In the beginning, everyone wanted to host animation and other content," animator Dave Redl told the E-Commerce Times. "Everyone fancied themselves the next Cartoon Network."
The Great Broadband Stall
Broadband promised inexpensive, plentiful and easy-to-acquire content from independent artists and struggling auteurs shown free of charge to viewers with broadband connections and supported by advertising. Broadband content, however, failed to deliver because only a small minority of the U.S. population -- about 5 percent, according to estimates -- had access to DSL, cable modem or T1 connections. That percentage has changed little in the past five years.
According to American University communications professor and Center for Social Media director Patricia Aufderheide, there is a stall in broadband delivery in the United States. As a result, she told the E-Commerce Times, "broadband certainly does not, in its present configuration, look like a replacement for other mass media." Aufderheide also has served on the jury for the Sundance Film Festival and is the author of "Communications Policy and Public Interest: The Telecommunications Act of 1996."
Hi-Fi, Lo-Fi, QuickTime, Flash
Capital-intensive technical requirements -- encoding, streaming and hosting video files -- rapidly consumed the sparse advertising revenues generated by early entrants into broadband entertainment. Vivendi-Universal faces similar hurdles, but with a well-funded infrastructure. "MP4.com encodes, and accepts encoded files, in hi-fi and lo-fi [formats, such] as Windows Media 7.1 and QuickTime. We also serve Macromedia Flash 5 files," Rabe explained.
Such firms as BMW and Skyy Vodka place products in short Internet films -- a burgeoning new advertising format Rabe wants to tap. "We hope to be able to connect independent artists with cutting-edge brands as content and advertising coexist and even merge," she explained.
Next New Advertising Thing
Product placement represents a natural evolution of Internet-based advertising, according to streaming media expert Tony Greenberg, CEO of RampRate Technology Advisors. "Hits-based advertising models, such as online short films, will migrate toward sponsored, branded, ad-based content -- possibly in the form of heavy product placements," Greenberg told the E-Commerce Times.
MP4.com also may have a key advantage that its predecessors in the online entertainment business lacked -- profitable offline content to promote.
"Usually, studios or TV channels will have exclusive content on their Web sites for the sole purpose of promoting their TV shows and movies," said film director Chris Mancini, whose first online film, "Skins," was nominated for multiple Pixie Awards -- the online version of the Oscars. "Sites like AtomFilms and Hypnotic are distributors and sell short films and advertising, but that revenue is not enough to fund a large company," he told the E-Commerce Times.
Versatile and Beautiful, If Not Profitable
Today, small firms that provide online entertainment do so for exposure, marketing and reasons other than direct profitability.
"The Internet has opened doors for me that I never imagined opening in the first place," animator Stan Holden told the E-Commerce Times. "For instance, I have a Hollywood agent on the verge of selling the script for my online animation, to be produced as a full feature."
"Right now, there is no real method of making good money for animation online," animator Redl explained. "Most do it for fun or for hope of being 'discovered' by more traditional entertainment outlets."
Fear of Digital Delivery
Although Warner Brothers recently entered the video-on-demand business, "in general, incumbents with working theatrical outlets are not being driven to consider alternatives," Aufderheide explained. "Creators often fear digital delivery, and large media corporations are concerned about piracy."
All of this may make Vivendi-Universal's MP4.com the sole optimist among big media players in the realm of the small digital screen.
"The beauty of the Internet is that it has introduced a realm of new
choices," MP4.com's Rabe noted. "We are not constrained by the
same dynamics that ultimately produced half-hour and one-hour
programming."
