Online Talent Draws New Battle Lines

Mar 26, 2007  •  Post A Comment

Online video is ditching its viral training wheels, and the power struggle is on between creators and distributors.

A new phase in the development of online video has erupted in the last month, as rising stars snagged ad deals and shifted allegiances to new sites and such major TV players as Michael Eisner and Steven Bochco lent their heft to Web production.

Both entertainment stalwarts and budding talents are edging away from the homegrown, viral-video fare that defined the early days of the YouTube generation. Instead, this crop of creators and backers is tilting toward professionally styled content and traditional business strategies.

The result is a fresh round of competition among online video sites as they jockey to become the frontrunner in talent and the tools that lure it.

In recent weeks the landscape has shifted. Creators of two prominent online series, “The Show With Ze Frank” and “Ask a Ninja,” said they’ll be moving from Revver to Blip.TV and Federated Media Publishing, respectively. “Ask a Ninja” projects to reach seven figures in ad dollars with the new partnership, said Kent Nichols, one of the creators. As part of the jump to Blip, online star Ze Frank snared Dewar’s as an advertiser.

As for the stalwarts, Mr. Bochco launched his “Cafe Confidential” video confessional project last week on Metacafe, with American Apparel as the sponsor. In early April, Mr. Eisner will premiere on his new site vuguru.com the series “Prom Queen,” with ELLEgirl, Fiji Water, POM Wonderful and Teleflora.com attached as advertisers. In addition, NBC plans to produce an online series for Break.com, and the site expects to land advertisers by the time the show launches next quarter.

“It clearly suggests there is money to be made,” Mr. Bochco said.

The moves also presage a shift in power from distributors to creators. While online-video CEOs say rising stars are not defecting to other sites, the auteurs contend that sites are vying for talent.

The increasing friction between creator and distributor harkens to talent-studio battles that are all too familiar in the film and TV business. Whether online video talent or sites will wind up holding the cards is anyone’s guess, but for now, online video destinations such as Revver, Blip and Veoh must grapple with how to stand out in an increasingly commoditized world.

“The only way to differentiate yourself as a site is in the talent you have,” Mr. Nichols said. “Just like anything else in showbiz, it’s an economy built on recognition and stars and track records.”

Investors also want the video sites to make good on their promises, and content is the final piece of the pie to make the online video business tick, said Jordan Levin, the former CEO of The WB who’s now a founding partner with Generate, a new-media online production shop and talent management firm. “Demand is shifting to the content creators and the content itself. It’s becoming a more competitive marketplace.”

But video-hosting sites insist they aren’t vying for talent and that exclusivity is not possible in this business. “It’s not that [creators] are switching platforms and choosing one individual platform. They want to be everywhere,” said Veoh Networks CEO Dmitry Shapiro.

He points out that Veoh is home to more than 16,000 individual broadcasters, and about 90 percent of those host their videos on other sites, too. Veoh even syndicates video to Google, YouTube and MySpace and lets users who download the Veoh player watch video from about 60,000 Web sites.

The real competition between online video sites is about the features each offers, Mr. Shapiro said.

Ze Frank said that’s why he switched to Blip.TV for the final run of his show that ended last week. “I like their technology better. They have collections, playlists,” he said. He will host the archives of his show on Blip.TV, using the playlist functions to guide new viewers into the series. Blip.TV also allow him to syndicate a “best of” collection to iTunes.

Online creators are attracted to sites that have more mature technology, said Mike Hudack, CEO of Blip.TV. “We are seeing personalities [with] staying power, like Amanda Congdon, like Ze Frank, take ownership of their content and fund their brand without having to go through a studio system,” he said.

Creators should be careful about what they sign because the ad potential is unknown, said John Battelle, chairman of Federated Media Publishing, which connects independent Web sites with marketers. “Anyone who tells them how much money they think they can get, unless that check is cleared, I wouldn’t count on it,” he said.

Revver CEO Steven Starr said he expects to see microstudios crop up and commission online shows. But advertising will drive most projects, because an essential difference between TV and online is that sites aren’t studios – most won’t pay upfront, in the near term, for shows.

Even so, Break.com CEO Keith Richman is not convinced that the talent is running the show. “My belief is that there are 1 billion people creating content nowadays, so there will always be a fresh source of talent,” Mr. Richman said. “It’s not clear yet that viewers will follow online talent between sites.”