By all rights, webcasting should be an industry whose signal has faded. Investors should be changing the channel.
Consider the evidence: Pop.com, the streaming-media site backed by DreamWorks and Steven Spielberg's Imagine Entertainment, snapped and crackled -- losing $10 million and giving 70 employees the pink slip -- before it even debuted. The ambitious Pseudo.com, $35 million later, isn't even a pseudo network. Microsoft-backed Digital Entertainment Network is now off the air. And Shockwave.com, a pioneer in the genre, is bowing out to focus on interactive games.
So why is upstart streaming-media site Icebox.com so red-hot?
The Los Angeles company's original Web 'toons have had more than 5.6 million "show viewings" since its launch this summer, drawing attention not only from Silicon Valley but from a more valuable source of money -- Hollywood. Showtime Television has just snapped up the rights to develop Icebox's "Starship Regulars" into a prime-time animated series; and Artisan Entertainment is looking to turn Icebox's most popular program, "Mr. Wong," into a direct-to-video movie. And as the firm debuts three new shows as part of its first "fall season," it's in talks with several studios and networks to sell television rights to three additional programs, as well as to develop a "first look" deal for its properties.
To put it simply, Icebox isn't so much a webcaster as it is a ministudio -- so it's no wonder that its founders have elite Hollywood roots.
"We're an incubator," says co-founder and CEO Steve Stanford, referring to Icebox's potential well of TV and film properties. (Stanford is a former executive at top talent agency International Creative Management, while fellow founders John Collier, Howard Gordon and Rob LeZebnik are executive producers for "King of the Hill," "The X-Files" and "The Simpsons," respectively.)
The company's goal is to deliver "audience-ready" programs to networks and studios, thus eliminating the expensive costs of development. Think of it as a Kozmo.com for Hollywood development execs. It's a clever move, yoking its business strategy to offline revenue. (The private company, which raised $15 million in financing, wouldn't disclose how much revenue it has drawn since launching in June.)
And top writers have come on board because Icebox offers them unfettered creative freedom to produce the kinds of shows they want to make, even if the results sometimes stretch the boundaries of taste.
"Mr. Wong," for instance, features the comic travails of a pastel yellow, hunchbacked, thickly accented Chinese manservant. The show, created by "South Park" writers Pam Brady and Kyle McCulloch, has been denounced by several Asian-American groups as racist. One recent episode had a drunken Mr. Wong urinating on the grave of Elvis Presley.
"T ... t ... take that, Elvis Ps ... Ps ... Prezzz-rey," he moans.
In a recent guerrilla-marketing campaign, Icebox littered college campuses with fake Chinese menus for Mrwongskitchen.com. At the Web site, viewers see Mr. Wong dropping his trousers and screeching, "Suck my litchi nuts, you American bitches!" The company has even plastered posters with Mr. Wong flipping the bird near New York's Chinatown.
"We certainly don't encourage our writers to do things that are lowbrow," Stanford says, but the lewd, crude frat-boy fare is aimed squarely at the 18-to-35 demographic the company aims for.
This fall, Icebox will unveil a show about a flamboyant fowl named "Queer Duck," who pals around with his boyfriend, "Openly Gator."
"It's no different from "Will and Grace," Stanford insists.
By serving as a testing ground for shows with potential to become television hits, Icebox may have discovered a solution to the biggest Web quandary -- how to stay financially afloat.
After all, Stanford says, hit show "Seinfeld" is a $2 billion property. That isn't dot-com vapor money, whose worth is tied up in the wild imaginations and speculations of investors. It's cold, hard Hollywood cash.
Hollywood has shown an interest in Icebox because, each season, the networks lose millions to find the next "Seinfeld." As Stanford points out, of some 100 shows that are commissioned each year, only a few dozen will actually be shot for pilots, and even fewer will actually get broadcast. NBC and Fox are each debuting six shows this fall, CBS has seven new offerings and even "not quite a network" WB is rolling out four shows -- all with the hope that at least one show will be successful enough to return next year.
Meanwhile, producing an online cartoon -- with no need for sets, actors, trailers or catering -- is clearly a more economical proposition, and perhaps a more creative one. As Americans spend more time in front of computer screens, the potential online audience is becoming quite large. Icebox is taking particular aim at the college crowd and office slackers in their 20s and 30s -- folks who tend to have fast Web connections.
Avoiding the bloated, cash-eating operations style of its predecessors, of course, is essential. So while a company like Shockwave.com dished out millions to lure names like director Tim Burton and "South Park" creators Trey Parker and Matt Stone, Icebox doesn't pay its creative recruits a cent. Rather, it pays in stock and shares 50 percent of profits from "offline exploitation," which includes revenues from film, TV and merchandising deals.
As Stanford puts it, "We're trying to align the incentives of the creatives to the incentives of the deal."
Indeed, even with dot-com cash (which isn't so easy to come by these days), Icebox can't match Hollywood's prices for writers. "They all make a ton of money already," Stanford says. "They do incredibly well in television and film. OK, let's say we could pay them $100,000 for a project. I mean, they could go skiing on that. You know? That's a weekend of skiing."