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[PROFILE] Kenneth Wong - CEO, Internet (State of Online Media)

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  • madchinaman
    http://www.digitalproducer.com/aHTM/Articles/12_13_99/kenneth_wong_nam ed_ceo_of_pop_dot_com.htm Wong comes to POP.com having recently left his post as
    Message 1 of 1 , Jan 2, 2003
      http://www.digitalproducer.com/aHTM/Articles/12_13_99/kenneth_wong_nam
      ed_ceo_of_pop_dot_com.htm
      Wong comes to POP.com having recently left his post as president of
      Walt Disney Imagineering, the research and development arm
      responsible for the creation of resorts, theme parks and regional
      entertainment venues. He first joined Disney in 1991 as a senior vice
      president for the Disney Development Company, where he was
      responsible for west coast growth initiatives, including the multi-
      billion dollar expansion of the Disneyland Resort.

      In 1995, he was promoted to executive vice president and general
      manager of Walt Disney Imagineering. The following year, when the
      Development Company merged with Imagineering, Wong was promoted to
      president. During his tenure, Wong oversaw the largest slate of
      projects in Imagineering's 44-year history, including Disney's Animal
      Kingdom, Tokyo DisneySea, Time Square Studios, Disney's California
      Adventure and the two Disney cruise ships, to name only a few. He
      also spearheaded Imagineering's diversification into new businesses,
      such as Disney Quest and Hong Kong Disneyland, in addition to
      increasing its commitment to technology R & D.

      In making the announcement, Jeffrey Katzenberg said, "Ken is a
      visionary executive whose far-reaching accomplishments have already
      left an indelible mark on the world of entertainment. He was the
      architect of unprecedented growth at Imagineering, and we are excited
      to work with him to build POP.com into a successful enterprise in the
      exploding internet marketplace."

      Brian Grazer said, "We wanted to attract a proven executive whose
      experience would complement our own roots in film and television. Ken
      brings tremendous experience, knowledge and imagination to the table,
      and he shares our vision for POP.com to be an innovative and
      completely unique entertainment outlet. We are looking forward to
      collaborating with him in the development of this exciting new
      venture."


      ============

      Pressures Facing Kenneth Wong
      http://www.timburtoncollective.com/article120.shtml
      Pressures from within also helped bring down Pop--a catalog of
      cluelessness that would make a classic how-not-to business book.

      Kenneth Wong, who had no Internet experience but oversaw cruise-ship
      attractions and theme-park rides as Imagineering head for Disney, was
      put in charge of the site by Katzenberg. Other executives were
      plucked from the world of multimillion-dollar budgets and told to
      produce shorts for $10,000.

      Personal favors were rife: one staff member says Steve Martin got a
      budget-busting $100,000 for projects, including Gwyneth and Me, a
      comedy short about his attempts to have a baby with Gwyneth Paltrow,
      because the moguls didn't want to jeopardize their relations with him.


      TINSELTOWN TITANS CAUGHT IN A WEB
      By Chris Taylor (with Jeffrey Ressner)
      From Time, 09.18.2000
      http://www.timburtoncollective.com/article120.shtml

      The last hours of Pop.com were laced with irony worthy of a movie by
      Steven Spielberg and Ron Howard--who, as it happens, were co-founders
      of the ill-fated website. Every Friday afternoon for the past few
      months, Pop's 85 employees had gathered in their Glendale, Calif.,
      warehouse to sip beers and slap backs for the films they already had
      in the can: shorts starring Rene Russo, Steve Martin, Claudia
      Schiffer. Last Friday, just two weeks before the planned launch, they
      were chugging beers to drown their sorrows and being eyed by security
      guards to make sure they didn't steal the computers as they left the
      premises for the last time.

      Conspicuously absent from the bitter end were Pop's architects:
      Spielberg, Howard, DreamWorks pals Jeffrey Katzenberg and David
      Geffen and Howard's partner Brian Grazer. Pulling the plug and
      skipping the farewell party were among the few things in Pop's short
      and troubled history that found all five in agreement. "Thank God
      I've got another occupation," says Grazer. "I love going from foxhole
      to foxhole in movies and television, but the Internet space is
      Vietnam."

      Indeed, the more Hollywood and cyberspace engage each other, the more
      body bags come back. Shockwave.com, an entertainment site that forged
      pricey pacts with Tim Burton, David Lynch and the two creators
      of "South Park," laid off 20 last week from its staff of 170. A
      copyright lawsuit filed by the movie and recording industries has
      scared investors away from the Michael Ovitz-backed content-search
      engine Scour, which laid off 52 of its 70 employees two weeks ago.
      The Digital Entertainment Network imploded in May, and even the
      critically lauded short-films site Atom Films is in need of another
      round of financing.

      What's going wrong? Part of the problem is that the audience just
      isn't there yet. Even brief online movies require hefty broadband
      connections such as a cable modem or a DSL. Most of us are still
      chugging along on 56-K modems, and would rather watch TV than wait
      half an hour for a jerky postage stamp-size short to load. So until
      broadband goes mainstream, online entertainment networks have the
      near impossible task of building a brand in a near vacuum while
      burning as little cash as possible. "It's like 'Survivor'," says
      Kevin Wendle, co-founder and CEO of independent-filmmaker site
      iFilm.com. "It's tough being able to hang in there for the long haul."

      If anyone was going to be the Richard Hatch of this cyber-movie
      island, you'd expect it to be the DreamWorks-Howard ticket. But Pop
      fizzled as if it didn't have the will to live: the site issued only
      three press releases in its brief life and delayed the launch so
      often it became an industry joke. Out of the $50 million purse
      promised them by Microsoft co-founder Paul Allen, it spent a paltry
      $7 million--barely a long liquid lunch by Silicon Valley standards.

      Pressures from within also helped bring down Pop--a catalog of
      cluelessness that would make a classic how-not-to business book.
      Kenneth Wong, who had no Internet experience but oversaw cruise-ship
      attractions and theme-park rides as Imagineering head for Disney, was
      put in charge of the site by Katzenberg. Other executives were
      plucked from the world of multimillion-dollar budgets and told to
      produce shorts for $10,000. Personal favors were rife: one staff
      member says Steve Martin got a budget-busting $100,000 for projects,
      including Gwyneth and Me, a comedy short about his attempts to have a
      baby with Gwyneth Paltrow, because the moguls didn't want to
      jeopardize their relations with him.

      Spielberg, it seems, gave up much earlier than Howard. Even his
      suggestions were halfhearted: one was an animated short called From
      Hair to Eternity about a man who seeks an unblocked view of a movie
      (Jurassic Park it ain't); the other was to place a webcam on the set
      of his film A.I. and broadcast live images of the crew on lunch
      breaks. None of the principals could decide on Pop's overall style,
      or even which ideas to pursue, "We'd go through the slate of projects
      and Steven would like this, Ron would like this, Jeffrey liked this,
      and Brian liked this," says a harried executive.

      Keenly aware of the critical roasting they would get, the fathers of
      Pop decided to bail out before drowning in red ink. Says
      Katzenberg: "Everyone in this space is blindfolded and trying to pin
      the tail on the donkey." The final ignominy came when indie start-ups
      iFilm and Atom Films negotiated to buy Pop, but no deal materialized.
      And so Pop was laid to rest, its tombstone a warning to all those in
      Tinseltown who would jump on the Internet without first understanding
      it. If Spielberg and Howard own the story rights to Pop's internal
      wranglings, however, they might yet have a winner.


      =======

      Kenneth Wong at Pop.Com
      http://www.businessweek.com/2000/00_39/b3700102.htm
      What Burst Pop.com's Bubble?
      The star-crossed Web site was tripped up by Hollywood egos and a Wall
      Street cooldown

      It was billed as the hottest film festival of the new media era.
      Gathering at Hollywood's Chateau Marmont Hotel, a favorite hangout
      for rockers and actors, dot-com executives chatted up celebrities-
      turned-Netrepreneurs Melanie Griffith and Ben Affleck. The highlight
      of the Yahoo! Internet Life Online film festival last March was
      supposed to be Leaving Las Vegas director Mike Figgis' new all-
      digital film Time Code. But the biggest crowds jostled near where
      five-month-old POP.com was serving up mixed drinks and the chance to
      slip a business card to the site's backers, among them Dreamworks SKG
      partner Jeffrey Katzenberg and director Ron Howard.

      When it was announced last October, POP.com was supposed to be a
      blockbuster in the making. Bankrolled by billionaire Paul G. Allen,
      its partners included two of Hollywood's hottest film companies--
      Howard's Imagine Entertainment and Dreamworks, which brought with it
      not only Katzenberg but also legendary director Steven Spielberg and
      record mogul David Geffen. Almost immediately, word went out that
      Spielberg and Howard were hitting the keyboards and that A-list
      talent like Eddie Murphy and Steve Martin would follow. But POP.com
      was a show that never opened, quietly acknowledging on Sept. 4 that
      it was delaying its launch ''indefinitely'' and that it would lay off
      most of its 70-odd staffers.

      TOO WIRED. POP.com's implosion, rumored for months, only validated
      the latest industry buzz that Hollywood-style sites were fighting an
      uphill battle. At its simplest, the problem boiled down to
      infrastructure: Too few folks are sufficiently wired to get superfast
      broadband connections to watch Hollywood's Internet fare, and
      therefore too few people are willing to pay anything for it. It could
      take five years before that changes, and even then only a few Net
      startups are likely to survive against entrenched TV and film
      companies. Just days after POP.com began its downsizing, San
      Francisco-based Shockwave.com, which had spent heavily to sign up the
      likes of director Tim Burton, was laying off 20 of its 170 employees
      and saying it would focus more on interactive games. ''The issue is
      whether there is a market there for one site, much less two or
      three,'' says Frank Biondi, former Universal Studio Inc. chairman
      whose Waterview Partners venture capital firm has invested in several
      entertainment sites.

      When POP.com started up, its backers figured if anyone could make it
      online, they could. Quickly taking the company public was the Holy
      Grail from the beginning, according to those close to the backers.
      The site, they say, started with Howard's partner, Brian Grazer. A
      spikey-haired 49-year-old onetime talent agent and today a hot
      dealmaker and film producer, Grazer found a receptive audience for
      his Internet plans at Dreamworks, which last year was looking to
      merge its six-year-old studio with Ron Howard's Imagine. Katzenberg
      quickly bought in after Grazer pitched him several ideas about how
      short films could be linked on the Internet with e-commerce, games,
      and chat rooms. In one scenario, recalls Katzenberg, users of the
      site would see their futures played out for them in different clips,
      based on what they asked a gypsy fortune teller.

      ONLY THE BEST. If the medium was new, POP's execution looked
      decidedly old school. While other sites found cheap or even free
      shorts to run, Dreamworks hired a dozen production executives,
      including some from Dreamworks and Imagine, to work from a converted
      warehouse not far from Dreamworks' sprawling campus in Glendale. To
      run the site, Katzenberg brought in Kenneth Wong, who headed theme
      park development for Walt Disney Co.'s Imagineering unit. Dan
      Sullivan, a Grazer assistant, was given a key role in working with
      the production folks.

      At the outset, POP promised shorts from none other than Spielberg and
      Howard. But neither happened quickly, much less on Internet time.
      Spielberg was in the planning stages of two films. Howard, who
      envisioned a series of shorts based on the dreams of actors and
      directors, was putting the final touches on How the Grinch Stole
      Christmas, a Jim Carrey film Universal will release this November.
      That meant neither could spend much time on POP.com. Production teams
      would be assigned to Spielberg, who often met with them during breaks
      at the Dreamworks office. Insiders say ideas from the two directors
      often went through many rewrites, and that Spielberg's first project
      was two weeks from filming when the site was pulled. Howard got
      five ''dream'' shorts from Hollywood pals, including one from Drew
      Barrymore.

      Meanwhile, POP.com wasn't getting many of its other Tinseltown
      friends to submit ideas, say insiders. Steve Martin offered up two
      shorts, but Eddie Murphy balked at several ideas given to him by
      Grazer. Others wanted to start their own sites. By early this year,
      Dreamworks was putting out the word to Hollywood talent agents that
      it would be accepting outside material. In March, it also started a
      joint venture with New York attorney John Sloss to find short films
      from aspiring filmmakers.

      By then, POP.com's economics had worsened. Wall Street's aversion to
      dot-coms dashed any hopes for an IPO. POP.com had aimed to use the
      promise of a public offering to buy up other players. Late last year,
      it made overtures to several content sites, including AtomFilms,
      hoping to build a library with the company's collection of 1,400
      shorts. Now, with its promised launch approaching, POP.com's Wong
      projected it would burn through $2.25 million a month once it was up
      and running. After having already spent $7.2 million of Paul Allen's,
      Katzenberg was loathe to spend more money from the billionaire, also
      a major Dreamworks investor. ''There was just no market out there,
      and Paul Allen has just been too good to us,'' says Katzenberg. ''Who
      knows, with IPO currency, it might have been different.''

      PLOT TWIST. As September approached, POP.com was no longer aiming for
      shareholders--just a buyer. In mid-July, they again approached
      AtomFilms, says AtomFilm CEO Mika Salmi. He says assets included 60
      shorts that were either prepared or planned, many still on
      storyboards, the old-fashioned method by which Hollywood studios
      first plot out story lines for animated films. ''There was some great
      content there,'' says Salmi, ''but there is a lot of great content
      out there that you can buy for a lot cheaper.'' Moreover, says Salmi,
      there were few distribution deals in place, a key demand by
      AtomFilms, which has agreements to show its shorts on everything from
      airlines to shopping malls, as well as online.

      POP thought it had found a way out in late August, when it looked as
      if the site would be merged with IFILM, a Hollywood business-to-
      business site that had been buying up smaller sites that provide such
      services as tracking development of scripts and TV shows. IFILM
      Chairman Skip Paul, who had headed the Sega Gameworks video arcade
      chain in which Dreamworks had a stake, first broached the deal. It
      seemed a sure thing, especially since Paul Allen was an investor in
      both sites. But the deal fell apart when POP insisted on a large
      minority stake in the company, and IFILM wanted a five-year agreement
      for the exclusive services of Spielberg, Howard, and other POP
      creative executives. Allen declined to comment.

      POP backers are still unsure what they will do with the 60 shorts but
      defend their decision to pull out. ''I don't see anyone in this space
      declaring victory,'' says Wong. ''Just having a launch party doesn't
      mean you have a market.'' As for parties, the only one POP.com is
      having these days is the teary Sept. 8 farewell gathering at which
      Wong showed the site's oeuvre to those departing. It was a long way
      from the bash at the chateau.

      By Ronald Grover in Los Angeles

      ===========

      Kenneth Wong at Pop.Com/CountingDown.Com
      http://zdnet.com.com/2100-11-523588.html?legacy=zdnn
      DreamWorks' Pop.com scales back plans

      By Bruce Orwall
      The Wall Street Journal Online
      September 4, 2000, 5:00 PM PT



      The high-profile Web entertainment venture Pop.com plans to pull back
      significantly on its near-term ambitions following the collapse of
      merger negotiations with Ifilm Corp.
      Pop.com is the joint venture that partners DreamWorks SKG, Imagine
      Entertainment and Paul Allen hoped to launch on the Web last spring
      with a mix of animated and live-action short films. But Pop's
      founders -- including Steven Spielberg and Jeffrey Katzenberg of
      DreamWorks, and Imagine's Ron Howard and Brian Grazer -- have
      struggled to find a viable business model for their site, which still
      hasn't launched.

      Last week, Pop.com was in advanced discussions to be acquired by
      Ifilm Corp., which operates a film portal and directory on the Web.
      But those talks were terminated on Friday. Katzenberg said the Pop
      partners decided the deal with Ifilm was ultimately "too limiting,"
      and they didn't want to lose control over their future on the
      Internet. Ifilm declined to comment, but sent an e-mail to employees
      confirming the end of the negotiations.




      Instead, Katzenberg and Howard said Pop plans to operate for the time
      being as a small workshop or lab that creates original Web
      programming. It isn't clear where that programming will be Webcast,
      but one strong possibility is Countingdown.com, a small movie fan
      site that Pop.com purchased earlier this year.

      Countingdown.com this summer featured a successful promotion with
      DreamWorks in which several minutes of the studio's film "Chicken
      Run" were available for viewing on the site. In any case, it appears
      the grandiose Pop.com Web site the firms labored to create for more
      than a year may never be launched in the way that was originally
      intended.

      Scaling back will have serious consequences for Pop's operations.
      Katzenberg said the site has spent $7 million so far, but plans to
      spend only about $1 million a year in the future. That will mean
      cutting the company's roster of about 70 employees back to perhaps a
      dozen. Kenneth Wong, the former head of Walt Disney Co.'s (dis)

      Imagineering unit who is Pop's chief executive, said he hasn't
      decided whether he will stay with the venture.

      For Pop's founders, the move to dramatically scale back would mark
      the end of a humbling yearlong odyssey that has proved how difficult
      it is for even the biggest names in traditional entertainment to make
      sense of the Web. Howard said the development of the entertainment
      Web site had been a "tricky, sometimes frustrating" process for Pop,
      as it has for many others trying to figure out the Web entertainment
      arena. He said the Pop partners "still have a lot of enthusiasm for
      the future of the medium," but want to be much more low-profile in
      their efforts as they wait for technology to make entertainment on
      the Internet a more rewarding experience for the user.

      Howard said Pop will wind up "in a lot of ways back where we
      started." When DreamWorks and Imagine began talking about a Web
      venture, he said, the idea was simply for the experienced moviemakers
      to have a platform for experimenting with the emerging medium.

      But when the dotcom IPO craze exploded, he said, it grew into a much
      bigger proposition with larger financial implications. When Pop was
      announced to the public last fall, it talked about using the Web to
      develop new characters or talent for movies or television.

      But things changed again for Pop when the public-offering market for
      Web start-ups collapsed and Pop was unable to settle on an
      operational approach that could be supported by the poor economics of
      the fledgling Internet-entertainment arena. Future financial
      transactions involving Pop remain a possibility, Howard said, but
      now "our goal is to be lean enough and simple enough that we can
      respond to any opportunity that may come along."


      ==============

      Hollywood's Funk
      Are the recent content blowups in digital Hollywood signs of a
      debacle? Not exactly, but they prove this business is a long way from
      payoff.
      By Robert La Franco
      From November 2000 issue
      http://www.redherring.com/mag/issue85/mag-funk-85.html

      Lots of dumb money floats around Hollywood: rich kids, Japanese
      electronics giants, and lately liquor and sewage handlers all looking
      for borrowed glamour or faster growth. But this year the dumbest
      money of the year award may belong to Paul Allen, the Microsoft
      cofounder who pledged $50 million of his $40 billion net worth to
      Pop.com , the now failed internet venture backed by filmmaker
      superstars Steven Spielberg and Ron Howard.
      Although Mr. Allen smartly held back $35 million of that investment
      to see some results, he has been throwing even greater sums at all
      sorts of ventures like cable TV systems, basketball teams, and the
      DreamWorks SKG movie studio that was a partner in Pop. He holds out
      the promise of a "wired world" as the way it will all pay off. In
      this worldview, the TV becomes a PC, the PC a TV, and both are united
      in one great mediafest through the interconnection of cable lines,
      fiber phone lines, and satellites. Suddenly, the 500-channel cable TV
      universe that TCI chairman John Malone dreamed up seven years ago has
      given way to the "3 million-channel universe," as one cable TV
      executive put it at an industry trade show in May.


      In that universe, the story goes, the new billion-dollar businesses
      will be companies like Icebox , Mondo Media , and Shockwave , all
      venture-funded operations formed in the glory days of the dot-com
      stock market. They'll soar as the new alternatives to big media's
      stranglehold on entertainment. But last month, just a week after the
      computers and office supplies of the Digital Entertainment Network
      were auctioned off in a bankruptcy fire sale, Pop shut down its
      operations. Mr. Allen tried to sell the company to another
      destination site he's invested in, iFilm . That same week, Shockwave,
      the destination site being spun off from Web animation software king
      Macromedia , fired 20 percent of its staff in a "refocusing." Not
      long after, Pseudo.com closed its doors.

      The message left in the dust: while the Internet will no doubt launch
      the careers of more than a handful of anonymous creators, the folks
      bringing them to an audience are on far shakier ground. Hollywood
      economics benefit talent, not the people who finance their creative
      whims. "The truth is that in this business, the creators always
      profit," says one talent agent operating in the new media
      space. "It's the distributors that have all the problems."

      Take Brian Grazer, a partner in Pop along with Mr. Spielberg and Mr.
      Howard. Mr. Grazer and Mr. Howard co-own Imagine Entertainment and
      are one of the most proven creative teams in town. For every movie
      they package, Mr. Grazer gets $3 million to produce and Mr. Howard $7
      million to direct in addition to sharing 7.5 percent of the gross
      receipts. Those fees scale up to 25 percent once the box office tally
      rises above $100 million. Universal Studios , the company that takes
      all the financial risk for Imagine's pictures, lost $160 million on
      $3.5 billion in revenue in the fiscal year ended in June. And that
      was a modest improvement over the previous year. It's no wonder that
      when Imagine was floated as a public company in the '80s, it quickly
      delisted and retreated to the cash-bearing arms of Universal.

      "These new companies want to mimic the vast amortization machines
      that movie studios have built up over the last 70 years," says Ravin
      Agrawal, a venture capitalist at the Los Angeles-based EastWest
      VentureGroup (see "The Players"). Mr. Agrawal, whose bosses are
      former TV and movie producers Merv and Gary Adelson, has seen many of
      these companies come through his door. "But the studios have
      established scale, leverage, and intricately defined relationships
      with the others in the value chain. It's completely immature and
      naïve to think you can do that now."


      THIRTY-ONE FLAVORS OF THE MONTH
      Each of these companies is hoping to crack the new-media
      entertainment code and muscle a brand name into the space between big
      studios' online paralysis and their eventual determination to
      dominate the online entertainment market. Some, like Icebox, are
      seeking to become Internet channels of their own, pumping shows over
      IP rather than television's MPEG video stream. Others, like Mondo
      Media, want to become the suppliers that the supposedly program-
      hungry broadband Web will turn to for content.

      As businesses, though, there is no denying that the new media models
      are, like all entertainment products, a lottery. In many cases it is
      a lottery played with other people's money. Take Mondo Media,
      a "Webisode" syndicator based in San Francisco; WildBrain , an
      offline animation studio that now has an Internet destination;
      DistantCorners , a science-fiction Web site; Shockwave; Ionic
      WorldWide Studios, a Web company with plans to create its own cable
      channel; and Z.com , an Idealab company backed by top Hollywood
      talent manager Brad Grey. As a group these companies have raised
      around $250 million.

      What for? Gambling on content. Wildbrain is a TV and feature film
      animation company doing work-for-hire business for studios and ad
      agencies. It is a profitable business, says CEO Jeff Ulin, but the
      return on investment is tragically dull. The $26.5 million Wildbrain
      raised will fund original production, an investment in computer
      graphics equipment and, of course, a Web site.

      There are others who are taking a more bootstrap approach. Eric
      Eisner and Bruce Forman formed TheRomp.com earlier this year when the
      two were fresh out of business school (see Annals of media, May).
      Their leased office space in Hollywood is crammed with pretty,
      pierced young men and women, more than a few twiddling with half-
      naked bikini babes on their computer screens, a centerpiece of
      TheRomp.com's lineup. TheRomp is crude and rude, with entertainment
      like Celebrity Piñata and a series that features talking, fornicating
      animals. The pair won't confirm, but TheRomp reportedly has about $7
      million committed to it, with half of that spent already. But when
      your father is worth $700 million -- as Mr. Eisner's father, Michael,
      is -- money is not exactly an issue.

      "I think you're more likely to see companies formed around an
      individual creator who bootstraps a business that generates a few
      hundred thousand a year, maybe a million," says Mr. Agrawal. "The
      expectation that these companies will produce $100 million in cash is
      ludicrous."

      And they certainly won't produce it anytime soon. After the
      advertising model most were based on proved to be faulty due to their
      limited reach and advertisers' reluctance to invest in banner ads,
      the sites began touting the virtues of sponsorship revenue, which
      they argue is fetching five times the rate that banner ads do
      today. "We are helping advertisers reclaim what they've lost in TV,"
      says Gary Levine, president of Icebox Entertainment. "A direct
      connection to the viewer."

      Icebox is led by Steve Stanford, a former talent agent, and has close
      to 100 television writers and former TV executives -- including Mr.
      Levine -- connected to it. Still, Icebox has a tough sell. One idea
      is to turn Icebox's Mr. Wong character into a pitch man. Mr. Wong is
      a scandalously racist cartoon about a hunchbacked, yellow-skinned,
      buck-toothed Asian houseboy working for an arrogant, abusive
      socialite. To do that, offers Mr. Levine, the camera can pan "off
      set" at the end of an episode, where the sniveling houseboy can be
      straightened out, his buck teeth removed and voice made confident and
      articulate as he begins to sell products to his fans.

      Of course, Icebox has no independent sponsors attached to its
      programs just yet, except for Showtime Networks, which has licensed
      episodes of another Icebox program, Starship Regulars, for the
      network. In fact, few of the Webisodes have sponsors. Maybe there's
      just too much edge. A recent Icebox episode featured Ann Heche and
      Ellen Degeneres, Hollywood's most famous lesbian couple, waving a
      rubber dildo around the animation scene, blaming their recent breakup
      on the absence of the "real thing." Big money sponsors are not likely
      to jump on that one. It can't be forgotten what happened when
      marketing managers from Ford Motor saw an early episode of DEN's Frat
      Ratz that they had paid to sponsor. In the episode, the characters
      smoked pot from a bong, and the suits at Ford balked. Big advertisers
      (who made up 21 percent of online ad spending in 1999) like to
      portray themselves as cool to young consumers, but they hate being
      linked to the material that is a staple of these sites.


      MORTGAGING THE FUTURE
      Though its founders hunted for venture capital funding a year ago,
      MediaTrip.com is surviving today thanks to former Walt Disney Studio
      chairman Joe Roth. Mr. Roth owns most of MediaTrip and, as the
      controlling interest, has guaranteed it a presence on $200 million's
      worth of marketing that his six-month-old movie studio, Revolution
      Studios, plans to spend. Revolution and MediaTrip will also share
      content; MediaTrip will develop interactive programming for
      Revolution, and the studio will have right of first refusal for any
      product MediaTrip develops. Mr. Harrison looks beyond even the
      sponsorship and syndication revenue models; he sees interactive
      games, merchandising, and Web versions of Revolution products
      generating the fat returns. This is exactly what the studios have
      suggested their Web efforts would do. But with the exception of a few
      successful game efforts from Sony , developer of the PlayStation,
      none has taken hold. The model makes more sense, but it will take
      quite a while before any of it is actually a business.

      Until then, for MediaTrip at least, it's a good thing Mr. Roth's
      studio is in control. According to the market research firm Jupiter
      Communications, 71 percent of the $3.5 billion spent on advertising
      on the Web in 1999 went to just the top 15 sites. That's not very
      good distribution when you consider that a handful of TV broadcast
      companies split $33 billion in ad dollars last year. There is an
      infinite supply of ad space on the Internet, and very little of it is
      proving valuable. Look at MP3.com , the free music site. Although a
      legal attack from Universal Music Group aims to punish the company
      for committing copyright infringement, it's still one of the most
      popular sites on the Web. In June, MP3.com pulled in 5 million users
      who stuck around for 20 minutes, according to research firm PC Data.
      Based on the company's financial documents, that came to $1.06 per
      user and $.04 per page view.

      The current content leaders don't even come close to those numbers.
      Shockwave, by far the leading content draw on the Web, with 8 million
      unique viewers spending 35 minutes on the site in July, won't discuss
      its finances except to say that its ad rates are no better than any
      of the other content sites vying for the limited pool of dollars. In
      fact, in September, Shockwave backed off the Webisode destination
      business to focus on interactive games instead. WireBreak
      Entertainment was founded by Paramount Studios former digital media
      head, David Wertheimer. It pulled a respectable 640,000 viewers in
      July, but it seems even the veterans of the business are feeling
      their way around. In May Mr. Wertheimer canned the original plans to
      be a destination site, choosing instead to syndicate WireBreak's
      shows to other sites.

      Others are pursuing off-line expansion. Mr. Eisner and Mr. Forman
      have successfully created an edgy brand for young men on the Web;
      they are now trying to create a record label, with its first CD spun
      off from an animated show they're posting on their site. And of
      course Icebox launched itself with the bold prediction that it would
      become the HBO of tomorrow. Don't be surprised if Icebox soon
      declares that the real juicy business is in syndication, the model
      most in favor right now. The argument is that by syndicating the
      shows to multiple Web sites, the badly needed reach can be
      attained. "If I can get 3.5 million to 4.5 million unique viewers,"
      says Z.com CEO Joe DiNunzio, "then I can get to a profitable model."


      THERE'S NO BUSINESS IN SHOW BUSINESS
      "This is not a mature business by any means, so there's a huge risk
      with being first," says Lewis Henderson, a new-media agent at the
      William Morris Agency, who last spring struck Shockwave deals for
      clients like director Tim Burton and South Park creators Matt Stone
      and Trey Parker. "But you have to be fair; it took ESPN 11 to 12
      years before it became profitable."

      True, but ESPN was formed 30 years after television was first
      commercialized. It was a time when companies like Lorimar Television,
      the independent TV studio cofounded by EastWest's Mr. Adelson, were
      sold at huge profits. But when Lorimar was sold to Warner Bros. in
      1989 for $1.1 billion, its value was in the vast library of
      television hits it had produced and its commitments from distributors
      to air its new programs. None of the Web companies moving at Internet
      speed have any of that to offer (see "The Naturals?").

      But today there are many valiant efforts. Take AtomFilms , which as
      the leading distributor of short films (for decades a nonprofitable
      gateway for aspiring feature filmmakers), has gained an audience of
      short-film fans and movie buffs. In July, 1.7 million spent ten
      minutes on its site, according to PC Data, making it one of the
      highest-trafficked content sites. In movie history, short films have
      been used to kill time before the real action. As an entryway into
      the film business for directors, it is a necessary and money-losing
      first step. AtomFilms, though not profitable, will generate between
      $10 million and $20 million this year, company executives say. And
      although $1 million of that comes from a distribution deal with
      Blockbuster.com , most of that revenue is derived from the
      distribution of short films to TV networks, airlines, and other
      offline outlets, not the Web.

      AtomFilms' most popular feature, Frog in a Blender, was created by
      animator Joe Shields. According to Matt Hulett, AtomFilms' chief
      marketing and online officer, the Frog series has generated some 30
      million downloads over the past year. Yet ad revenue from the
      downloads, Mr. Hulett admits, was only around $300,000. And while
      AtomFilms executives talk of a 55 percent gross margin, that's before
      its profit split with talent, which in many cases is 50/50. Rumors
      are circulating that AtomFilms is a ripe takeover target for a studio
      like Paramount Pictures, which is already using AtomFilms' 1.8
      million registered users for market research on TV programs Paramount
      has in development, or a Web portal like Yahoo , which carries some
      AtomFilms shorts.

      Yet despite setbacks and low revenue, the remaining dot-com
      impresarios are flush with success. Earlier this year, a short film
      that premiered on MediaTrip, George Lucas in Love, sold 50,000 units
      at retail outlets on and offline. A few months later, Mr. Roth picked
      up MediaTrip's first breakout character, Lil' Pimp, to develop as a
      Revolution feature film. Mondo Media licensed its animation series
      Thugs on Film to BBC America . A few weeks earlier, Urban
      Entertainment sold the film rights to one of its online programs,
      Undercover Brother, to Universal Studios.

      But Urban Entertainment may soon be learning a very valuable
      Hollywood lesson. CEO Michael Jenkinson launched his company as a
      portal for buyers and sellers of African-American film titles. He
      found out that most buyers would watch the online version for a few
      seconds and then call the office to have a videotape sent over. Mr.
      Jenkinson quickly discovered that facilitating the sales of other
      people's content was a sucker's game; owning content is the key to
      riches in Hollywood.

      Undercover Brother was written by Three Kings screenwriter John
      Ridley, who developed the character for Urban Entertainment as a
      50/50 partnership, taking no financial risk and sharing in whatever
      revenue the show generates online. Universal bought the rights to the
      film with a promise to pay Mr. Ridley $2 million upon delivery of the
      script and a production fee of less than $1 million to Urban
      Entertainment. But should the movie get made, Urban Entertainment is
      merely a net profit participant in the film; not a very promising
      deal. Remember when columnist Art Buchwald fought Paramount Studios
      in the late '80s to get his share of net profits from the film Coming
      to America? The film brought Paramount $125 million in revenue, but
      after paying expenses, the studio claimed a loss of nearly $20
      million.

      And the stakes at the table are likely to get bigger. Already the
      studios are plotting ways to control the Internet rights of their
      writers. Meanwhile, the Writers Guild of America is planning a strike
      against the major media companies next spring. And site operators are
      complaining loudly about the pricey talent deals. For example,
      Shockwave in some cases guaranteed up to $500,000 upfront for fees
      and production expenses in its talent deals. That prices Z.com out of
      the market, even though it had committed 20 percent of its equity to
      talent. If such money can be promised at this nascent stage of the
      business, what happens when the studios begin posting their libraries
      online, or moving into original Web content in earnest?

      Ask Kenneth Wong, CEO of the now gutted Pop.com. "The motto in this
      business is go fast, drive hard, be bold, and throw caution to the
      wind, looking for a business when there is not really a business," he
      says. "I am an optimist and I want to believe that some of these
      companies will break out. The odds are slim, but I'm still hopeful.
      That's what makes it fun."

      ===========

      Kenneth Wong Named Chairman and CEO of POP.com
      http://www.digitalproducer.com/aHTM/Articles/12_13_99/kenneth_wong_nam
      ed_ceo_of_pop_dot_com.htm

      LOS ANGELES, December 13, 1999-- Kenneth P. Wong has been named
      Chairman and CEO of POP.com, the recently announced internet
      entertainment company formed by Imagine Entertainment, DreamWorks SKG
      and Vulcan Ventures, Inc., the investment organization of Paul G.
      Allen, it was announced by principals Brian Grazer and Jeffrey
      Katzenberg.

      Wong comes to POP.com having recently left his post as president of
      Walt Disney Imagineering, the research and development arm
      responsible for the creation of resorts, theme parks and regional
      entertainment venues. He first joined Disney in 1991 as a senior vice
      president for the Disney Development Company, where he was
      responsible for west coast growth initiatives, including the multi-
      billion dollar expansion of the Disneyland Resort.

      In 1995, he was promoted to executive vice president and general
      manager of Walt Disney Imagineering. The following year, when the
      Development Company merged with Imagineering, Wong was promoted to
      president. During his tenure, Wong oversaw the largest slate of
      projects in Imagineering's 44-year history, including Disney's Animal
      Kingdom, Tokyo DisneySea, Time Square Studios, Disney's California
      Adventure and the two Disney cruise ships, to name only a few. He
      also spearheaded Imagineering's diversification into new businesses,
      such as Disney Quest and Hong Kong Disneyland, in addition to
      increasing its commitment to technology R & D.

      In making the announcement, Jeffrey Katzenberg said, "Ken is a
      visionary executive whose far-reaching accomplishments have already
      left an indelible mark on the world of entertainment. He was the
      architect of unprecedented growth at Imagineering, and we are excited
      to work with him to build POP.com into a successful enterprise in the
      exploding internet marketplace."

      Brian Grazer said, "We wanted to attract a proven executive whose
      experience would complement our own roots in film and television. Ken
      brings tremendous experience, knowledge and imagination to the table,
      and he shares our vision for POP.com to be an innovative and
      completely unique entertainment outlet. We are looking forward to
      collaborating with him in the development of this exciting new
      venture."

      Kenneth Wong stated, "I am thrilled to join POP.com at its inception,
      which offers the kind of entrepreneurial challenge I enjoy, while
      combining my career-long interests in entertainment and technology in
      a groundbreaking new medium. To team with this extraordinary
      partnership-beginning with Jeffrey Katzenberg, whom I have known for
      years, as well as such industry leaders as Brian Grazer, Ron Howard,
      Steven Spielberg, David Geffen and Paul Allen-is truly a dream shot.
      I look forward to working with them to create a company that unites
      the strengths of our past experiences and relationships, while
      reaching out to new and emerging talent. Together, we can build a
      culture based on creative innovation and a total commitment to
      quality."

      Launching in Spring 2000, POP.com is an independent digital
      entertainment company created to produce and broadcast original
      internet-only programming. The content will include live action and
      animation, video on demand and live web events, and non-linear
      interactive features and games.

      DreamWorks SKG was formed in October 1994 by its three principal
      partners- Steven Spielberg, Jeffrey Katzenberg and David Geffen-to
      produce live-action motion pictures, animated feature films, network,
      syndicated and cable television programming, home video
      entertainment, records, books, toys, consumer products and
      interactive entertainment.

      Imagine Entertainment is a film and television production company
      formed in 1986 by producer Brian Grazer and director Ron Howard.
      Together Mr. Grazer and Mr. Howard have produced films such
      as "Splash," "Parenthood," "Backdraft," "Apollo 13," "Ransom," "The
      Nutty Professor" and "Liar, Liar," and television shows such
      as "Felicity," "Sports Night," "The PJ's" and the Emmy Award-winning
      miniseries "From the Earth to the Moon."
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