After Drought, Hope for Shows Made for Web
By BRIAN STELTER
Published: August 8, 2010 - New York Times
LOS ANGELES — When Illeana Douglas, long active in independent film, wanted to make a show about a Hollywood actress who becomes a cog in a blue-collar wheel, she turned to the Web and to an unusual ally, Ikea.
She persuaded Ikea, the Swedish furniture maker, to be the sole sponsor of her Web video show, “Easy to Assemble,” in which she plays an employee. The most recent episodes, from October through February, drew more than 1.5 million views each month. At home late last month, getting ready for an awards festival where her show would be honored, Ms. Douglas was dressed in a yellow Ikea jumpsuit, mimicking her character.
“The brand is a co-worker in the story line,” she said, adding that Ikea does not actually make jumpsuits, so she made one herself.
After a protracted drought, money is trickling back into the professional Web video industry. So-called branded entertainment deals like the one by Ikea are becoming more common, helping to nourish new programming. And venture capital firms are also paying new attention to the industry. My Damn Channel, which distributes “Easy to Assemble,” will announce a $4.4 million infusion of financing on Monday, joining companies like Blip.tv and Machinima in raising money this year.
The promise of Web video has risen and fallen over the last few years. What makes the current round of interest more compelling is the realization in the industry that Web video will not supplant television viewing anytime soon, just complement it. That partly explains why the companies have stopped labeling themselves “TV on the Internet.”
“We realized we were putting a burden on Web-original programming by trying to make it like TV,” said Lance Podell, the Next New Networks chief executive, who now calls his company a provider of “Web original programming.”
Its most popular content includes “The Key of Awesome,” an Internet-oriented musical comedy show, and “Indy Mogul,” a network of shows about do-it-yourself filmmaking.
The Web video industry flies under the radar, but together, the major players rack up hundreds of millions of video views each month. As people spend more time online, producers are betting that video viewing times will keep growing in tandem.
According to the measurement firm comScore, 86 percent of Internet users in the United States now watch at least one online video a month. Some of those shows originate on traditional TV, something that Hulu specializes in; others originate online, and that portion is growing.
“There’s an inevitability to Web video that makes it exciting,” said Rob Barnett, the chief executive of My Damn Channel, which features original comedy and music shows.
Reaffirming its belief in made-for-the-Web programming, YouTube last month announced $5 million in grants for online producers. The grants will seed new content for YouTube, a unit of Google, which has largely failed to persuade big television networks and studios to place TV episodes and films on the site. Encouraging more professional Web video is another way for YouTube to expand its inventory for advertisers.
Despite the evidence that viewers are eager to watch more on the Web, the recession was an ugly reality check for purveyors of such programming, and many start-ups were closed. At My Damn Channel, Mr. Barnett hunkered down, trimmed staff and took solace in the fact that he was seeing repeat business from his existing advertisers like Southern Comfort and HBO, even though he was struggling to add new ones. Now, he says, venture capital will allow him to hire more advertising sales staff, add business development workers and broaden the types of shows he creates.
“I often think of my daily business life as a guy running a cable network in the early 1980s,” at the dawn of that medium, Mr. Barnett said. “There is, no matter how you slice it, a timeline for any new industry to grow.”
Web video companies say that advertisers are starting to make million-dollar commitments — hardly a threat to established television networks, but a big improvement for sites that started out making $5,000 at a time. Commercials in front of professionally produced entertainment videos can command $15 to $35 per thousand views, while banner ads alongside the videos can run $5 to $15 per thousand views.
“All of the distributors we talk to have a shortage of premium video inventory, which seems to indicate that that market has really picked up,” said Larry Tanz, the chief executive of the independent studio Vuguru, which is backed by Michael Eisner.
The ad revenue is important, but companies like My Damn Channel say they make more money from the branded entertainment deals, which incorporate advertisers into the story lines.
Ms. Douglas would not disclose the amount that Ikea had paid for the two-year-old “Easy to Assemble,” though she said the budget had increased for season two and again for season three, which is in production now.
Like most Web shows, her series is produced on a shoestring relative to television or film; her bungalow off Sunset Boulevard still doubles as her production office, and she recalled wincing at the $400 price tag of a portable toilet for one of the on-location scenes last year.
Nonetheless, the cast and crew members are now part of unions, and the show has attracted an impressive slate of guest stars, including Jeff Goldblum and Patricia Heaton. Some people “want to do this because they’re not having fun at their television jobs,” she said, nursing a cup of tea in her kitchen, where a white MacBook was plugged in. (Yes, she also owns a desk from Ikea.)
Ms. Douglas, who views Web video as a new outlet for artists like herself, said Ikea gave her great autonomy, asking her only to keep the content family-friendly. This summer, she is recruiting a second sponsor, shooting a third season of the show and planning a tour. She would still like to see “Easy to Assemble” end up on television, but she is satisfied that she has built a franchise on her own, online.
“Nobody doubts anymore that this is the best way to make entertainment,” she said.
A version of this article appeared in print on August 9, 2010, on page B1 of the New York edition.
