Prime time online

Jim Moloshok just launched the multimillion-dollar Entertaindom portal. Can he create the successor to network TV?

Published December 6, 1999 5:00PM (EST)

Jim Moloshok sits comfortably astride what may be the Web's next big thing -- or what could be the latest in its history of costly entertainment bombs. Entertaindom, Time Warner's multimillion-dollar entertainment hub launched last week, is the culmination of two years' hard work by the 50-year-old president of Warner Bros. Online and a crew of 100.

Moloshok's easy-going manner and affable story-telling ways evidence no fear of failure; instead, he conveys a contagious excitement about the project at hand. Moloshok wants to be the first to use the Web to give prime-time TV a run for its money. So, in addition to the usual entertainment portal fare -- a jukebox, movie clips and news from Entertainment Weekly -- he has commissioned original animated "Webisodes" for Entertaindom. Probably the edgiest of the original content is The God & Devil Show, an animated talk show hosted by that eponymous couple, created by Mondo Media. It features caricatures of celebrities -- starting with Keith Richards; after an interview, fans can send the celeb to heaven or hell; they can also listen to the Devil's answering machine message or ask God a question. The site also streams shorts of cartoon classics like "Marvin the Martian" and full-length original Looney Tunes cartoons that have been digitized.

Of course, creating original entertainment for the Web is a concept that's had more than one high-profile failure (both MSN and America Online pulled the plug on their attempts at original programming several years ago), but Moloshok believes he's the guy to make it work. These days a number of competitors, including Macromedia's Rob Burgess, are singing the same tune. But Moloshok's got a track record in the entertainment world; he started as a camera operator in high school and worked his way up to television director and then studio executive. If he succeeds with the latest venture, it will be because his marketing chops are as strong as his creative ones.

The movie bug caught Moloshok early -- he produced and directed his first short film when he was 15. After several stints in television production, he moved to the marketing side. In an industry noted for job-hopping, he stayed in one place and let his employer grow up around him; and when TV distributor Telepictures, where he worked in marketing, merged with Lorimar, he became vice president of marketing -- then stuck around until Warner Bros. acquired Lorimar in 1989.

The kind of guy who always has a computer stashed in the corner of the bedroom, Moloshok persuaded Warner Bros. to let him promote some of its shows online. As senior vice-president of marketing, he helped launch the Warner Bros. Studio Store online, the official "Friends" fan community, and "The People's Court" site, which was the first TV show Web site to stream live episodes. To combat content piracy and the unauthorized use online of studio assets, he helped create AcmeCity, a community site that lets fans decorate their personal home pages with images of their favorite WB characters and personalities; it boasts 750,000 registered users.

Despite his gee-whiz attitude toward the Web, Moloshok is careful to back up techno tricks with a solid business plan. Banner ads on AcmeCity sell for as much as $65 per thousand impressions, while the industry average lurks down around $10.

Still a geek and fan himself, Moloshok eats in his own restaurant, as the saying goes. "I work here, then go home and surf the Internet."

Original entertainment on the Web has been many people's dream since the Web began. But it has failed over and over. What makes you think it will work this time?

People who are coming on now are buying computers because they see it not as an information retrieval device but as an entertaining experience. A lot of analysts say, "This is what's always worked, therefore something else won't work." No one said, "We need a music video" [yet look at the success of MTV]. It may be that the "experts" don't recognize that there's already a marketplace.

Most of the content on Entertaindom requires plug-ins -- not only the fairly ubiquitous Flash but the Digital Projector from Brilliant Digital Entertainment and the Player by Pulse. Consumer confusion and distrust of plug-ins from little-known companies has killed other creative Web plays, for example, VRML. Why do you think users will be willing to do the downloads this time?

Even the Pulse Player is only 240K; a 56K modem can download that in a minute to a minute and a half. Brilliant's Projector is only 100k, a third the size of Real Networks' smallest player. Besides, I think the fear is going away, just like the fear of credit card [payments online] is going away. People already love "Superman" or "Loony Tunes." To watch "Superman" in 3D you have to make an effort. There are enough people who are loyal to [such shows] who will do it.

What are the stakes for you with Entertaindom? Does Time Warner look at this as R&D, or do you have traffic and revenue goals you need to meet?

Anytime anybody sets up a business on the Internet, a little percentage of it has to be R&D. However, from day one, Entertaindom was set up as a business on the Web. We have a large collection of advertisers, we already have 25 or 30 percent of our first year's ad inventory sold, signed and collectible. That's a nice nut to start with. The decision to greenlight the project was based on it being a good business for Time Warner.

The launch of Entertaindom has been put off several times; the most recent delay had to do with Time Warner's decision to move Entertaindom out of the Warner Bros. Online purview directly into its aegis. How did that change things?

[Time Warner, Inc. chairman and CEO] Gerry Levin asked me, "What if you had access to the whole world of Time Warner?" So we stopped, retooled using other programming and content that became available to us, and spent the next couple of months building the infrastructure that would allow us to auto-publish Entertainment Weekly into Entertaindom.

Time Warner had a spectacular failure with its early Web play, Pathfinder. Has it learned from its mistakes? Does it get the Web now?

There are few comparisons you can make between Pathfinder and us. For one thing, Pathfinder was Time, Inc., not Time Warner. Also, Pathfinder had great brands but from a marketing standpoint they weren't using their strongest asset, People magazine. In marketing Entertaindom, we have brands people will come for.

You had been your own little fiefdom within Warner Bros. Has Richard Bressler, chairman and CEO of Time Warner Digital Media, been more hands-on?

The whole team, Bressler and Levin and Rob Marcus, [vice president of mergers and acquisitions), and Michael Pepe, [president and CEO of Time Digital Media], have been very involved. They've helped us by putting us in contact with the right people at a very high level, which we could never have done when we were just a division of Warner Bros. They haven't been telling us what the content should be.

How did Time Warner feel about some of the edgier content, like "Ask God"?

They're very supportive of the creative process. They have never ever asked us to change one bit of content, because they know we're not putting things on for shock value but because it's different, breakthrough and creative.

You've said you want to create a studio system on the Web. How would that work?

Entertaindom gives us new brands and assets -- it creates a new funnel into the Time Warner distribution system. On the Web, we can create brand new franchises that we can then bring up through the distribution chain, turning them into animated TV shows or movies, or making licensing deals.

What's your creative budget for next year?

Millions, in the seven figures. The budget is for programming that is being acquired, produced internally and produced with third-party producers. Of course, we also are spending significantly for advertising and promotion, and technology and development of new technologies, many of which have not yet premiered.

What kind of deals do you make with content providers?

Deals with content providers range from creating a concept ourselves and hiring them to produce it, to somebody who has a very creative idea coming to us and us financing it. Everybody wants to produce for us -- independent producers, Hollywood directors and producers, agencies that represent some of the biggest stars. People don't expect to be paid the same as they are in Hollywood. They understand that where we are now is like television in the 1940s and '50s. The smart creative people realize there is going to be a big marketplace down the line.

Warner Bros. rival, Walt Disney Company, has not done well with its portal, Go Network. What mistakes of theirs will you avoid?

I can't point to their mistakes, but to what we're doing differently. Disney was a hugely successful company, then when they acquired ABC, they had some problems. Then they expanded elsewhere, expanded even more with the Web. It's important for companies to focus on their core competencies. With Entertaindom, we're not trying to be everything to everybody, not trying to be stock quotes, sports scores and whatever else comes along, we're just focusing on what we know best, entertaining the mainstream.

What are your favorite things about Entertaindom?

Everyone always talks about how to use the Internet to place the correct ads in front of the consumer. We're using the same personalization techniques to create a better experience for the consumer. If we find out, either through a cookie or site registration, what someone's interests are, we've designed our infrastructure so we can percolate content up. We're able to go in and custom publish the site for them.

You've accomplished a lot in the past two years. What's next?

Building Entertaindom into the largest, most successful site that we can. We're not here because we're executives who have been hired to run a division, we're here because we love the medium. When I was in high school, I used to watch old movies about the early days of radio and television and I always felt sad that I couldn't have been a pioneer of the era of entertainment. Now, we have the opportunity of doing that in the online community, creating what could be the NBC or CBS or ABC of the future.

By Susan Kuchinskas

Susan Kuchinskas is senior reporter for Adweek IQ and a correspondent for Reuters Advertising and Marketing Desk.

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