It's the new, new clichi: business big shot leaves corporate post, then resurfaces in a funky warehouse full of 28-year-olds where he runs -- Yes! -- another new-media start-up company. Ad legend Jay Chiat, 67, who founded the Chiat/Day agency, left advertising three years ago and then, by his account, spent a lot of pleasant time on the golf course; now he's running an Internet start-up company called Screaming Media.
Chiat, who brought us the Energizer Bunny and the Apple Computer ads that turned Super Bowl Sunday into a showcase for spectacular ads, is often called a visionary. He has a long-standing interest in technology and futuristic ideas; one of his most notorious moves was creating a virtual office -- which did away with assigned desks and seating -- for his Los Angeles ad team. (The experiment had decidedly mixed results.
Screaming Media is but one of many new-media companies moving into Manhattan's suddenly hip West Chelsea neighborhood. The 30,000-square-foot office Chiat and Screaming Media took over earlier this week has lots of brightly-colored curved walls, banana-yellow phones, refrigerators full of Lactaid milk and lots and lots of "screamers" in their 20s. ("We're not called employees here. We're screamers," says Chiat's assistant. )
Chiat talked to Salon Media's Susan Lehman about Screaming Media, new media, old media and more.
You told the New York Daily News, "The most amazing discovery was fire. The Internet was right up there." What did you have in mind?
You will agree fire did have some impact; certainly in some of the better restaurants, it does. The Internet is going to have the same level of impact.
What sort of specific impact, do you imagine?
Fire has impacted every part of our lives -- without fire, there would be no shopping, right? -- that's how the Internet will intrude on our lives, particularly our kids' lives. It will affect their education, the way they think about movies, food, the way they shop and the way the stuff they buy is delivered, everything. Fire is not as ubiquitous as the Internet will be.
Why is this company called Screaming Media?
The Interactive Connection -- its original name -- sounded very generic and boring. We sat around and put up "Yahoo" at the top of the chalkboard and said, "OK, that's the best name on the Internet. How close can we come?"
Then you have the problem of what's not taken. This was as close as we could come. We do stream information. We couldn't get any of the "stream"-dot-coms. Plus our name has a little more action in it.
After you left advertising, you invested in a number of new-media companies. Why did you decide to run this one?
This is the only one that asked me.
What does Screaming Media do?
We filter, syndicate and distribute content to corporate Web sites. We do it on a custom, real-time basis. We build very sophisticated filters. It makes the Web site fresher, more relevant. Anyone who has a Web site up, you'd think they'd have to use our product.
You've said you expect Screaming Media's revenue to jump from $5 million this year to as much as $50 million next year. Will the increase come solely from the syndication and distribution efforts?
Yeah. Our technology is very scalable. Our software can accommodate enormous numbers of clients. It's a marvelous opportunity. We'll keep developing products.
How do you make money?
We have a subscriber model. You, as a Web site, will say, I want content; we'll ask how many stories a day do you think you need to keep your Web site fresh. You'll say, I need so many stories a day, so many a month; that translates to x amount for a subscription.
What does a subscription cost?
The rough cost for about 250 stories a month is $1,300. It's a nice business.
How, as they say in your business, do you get "providers" to give up "content"?
We negotiate a contract with a magazine or media empire or whatever it is. We say, "We'll distribute your content, on an exclusive basis, and for every Web site that uses it, you'll get paid." We distribute 20 to 25 percent of all we collect to the content providers.
Your business model isn't based on an advertising model, though your competitors' are. Why is that?
There are a couple reasons. One is that that's the way we started and we thought there would be more value and less confusion if the business model was just based on delivering news that's of value to Web sites. I think the jury is still out on whether the advertising model is going to last. It's the case of the medium itself: As rates go down, are banner ads as effective as they were when it was more of a novelty? ... I can't say the advertising model is obsolete yet but it doesn't make a lot of sense in the long range.
Why do you think no one has figured out a way to make traditional ads work on the Web?
It's the same problem we originally had with television. We had the new technicians doing it first, you didn't have the artists. That's where we are now. We're just beginning to get the artists. Once they get ahold of it, and grasp it and understand how to use it, it will get better.
I can't say I've really surveyed it; I just haven't seen anything that's really provocative or exciting in terms of Web design or Web advertising. There's some interesting off-line advertising trying to drive you to Web sites.
Why do you think so many of the dot-com ads are incomprehensible? Why would anyone think lack of clarity is a good thing when selling Web-related services?
So many of the dot-com companies are incomprehensible. The company hires an agency, the agency hasn't the vaguest idea what the Internet is about. You look at an ad, it's trying to establish brand recognition -- it's got 30 seconds. It's hard to build a brand, competitively, and tell people what you do as well. Some have worked pretty well. From what I understand monster.com and hotjobs were almost out of business when they ran the Super Bowl ads.
I see that Screaming Media has reserved ad time during the Super Bowl -- a showcase since you introduced the Apple ads during the 1984 Super Bowl -- for spectacular ads. How will yours stand out?
I don't know whether we'll we use the [ad time]. If we can do something [new] we'll use it; if not we won't. I didn't realize what a can of worms I was opening up. If we do this spot, its going to be the most critically viewed spot ever -- it will be a nightmare. I'm a little concerned about that taking the eye off the mission of the advertising in terms of the critical fanfare. That doesn't seem fair, does it? In a couple weeks we'll see where we are.
As a communicator, is it a problem for you that Web metaphors -- "harvesting," "streaming," "stickiness" -- are obscure and difficult for lay users to comprehend?
Yeah. I think writers are working on that now. One of the guys here came up with this: What we do here is "commercify content."
I said, "What do we do?"
He said, "We turn content into commerce, that's commercifying."
Research we've done seems to indicate that people who are on the Net like the idea that they don't have to leave what they are reading to go buy something. If they are reading a book review and want to get the book, they prefer to just click and buy it right there without having to leave the Web site.
We set up a beta site, a test site, with movie, music and book reviews. If you're reading them and you want to buy a book or a ticket for a movie that's reviewed on the site, you can do that without leaving our site.
If we're right, and you can mix commerce and content in a way that doesn't offend people, we'll do it. We'll attempt to contract with content providers interested in commercial opportunities and we'll deliver text with commerce in it. Barnesandnoble.com, Moviefon.com and Bigstar.com are our partners in the test.
There's an assumption that there is an advertising influence on everything that appears on the Web. Do you think that's right?
No more than television. If you really think about it, when watching television, you have product placement all the time. I was watching the Channel 2 morning show with Bryant Gumbel, there's a lot of advertising on that show. I mean it's a nightmare. Watch any talk show, its all a P.R. play. Charlie Rose is the ultimate ad.
Getting back to your role as a visionary. Who on the Web do you think will have the most money at the end of the day? Portals, content providers, e-tailers?
I think the backbone people, the Ciscos, the people who are delivering what you need to make the Net work. I think they'll probably make the most money. I think the portals have a potential problem because I think that as people become more savvy with the Internet, they kind of realize how many things am I really interested in and why do I need this broader portal and why don't I just go to financial.com or golf.com or crocheting.com and get what turns me on there? So I think they have to figure out how to get into that. I think the numbers game is going to level off and attrition will set in. That's my take.
Seen any great ads since you left the advertising business?
I like the Gap ad, the khaki one. I liked that. I kind of like the audaciousness of the gerbil ad. I don't think I remember who did that -- Outpost, right? I don't even know what Outpost does. So its kind of like, Wow that was great, but they didn't have the budget to make any great impact, so that one didn't work. Advertising ought to work by telling you what it is you want to tell, you should understand what you want us to do, what you want us to think, where you want us to shop. Those ads didn't do that. But the Gap ad did.