The working concept was peace, love and ancillaries. But one year after Woodstock ’94, the mud-soaked media event is still a large red blot on the books of Polygram, the company that produced the weekend songfest for $40 million.

The original 1969 Woodstock Festival – which also lost money – defined a generation. Woodstock ’94, on the other hand, may end up as the defining example of what can go wrong with attempts at multimedia synergy.

Box office for the concert itself was never expected to recoup costs, especially after tickets sold slowly. Instead, profits were supposed to come from the concert’s pay-per-view telecast and, down the line, from the sale of records, merchandise – and movie tickets. But the PPV buy rate and the record sales didn’t live up to expectations, the movie is not even finished, and Woodstock ’94 backpacks and T-shirts are not exactly in high demand.

But long after the last dazed and confused concert-goer had trundled home, important ancillary Woodstock components – including an ambitious documentary of the event directed by two-time Academy awardwinning director Barbara Kopple – are on hold.

“Look at the first Woodstock, it was the film that defined it,” says John Roberts, who along with his partners in Woodstock Ventures, Michael Lang and Joel Rosenman, produced the original festival and were intimately involved in the Silver Anniversary edition as well. “It came out within a year of the event with the double album, and both were hits.”

The Woodstock II double compact disc, despite a roster of platinum-selling acts, has performed below expectations, moving more than 400,000 units stateside and 300,000 internationally. And its release was not accompanied by a film.

Lost footage

“I’m still confident the film will come out, but it’s a shame it’s taken longer than we originally expected,” says Kopple, who says Polygram has recommitted to the $3 million film and that with some luck it could be released next year.

“I can’t understand why (Polygram) wouldn’t want the documentary to come out,” says Kopple. “It really tells the story about the generation whose festival this was and how it all came to be. It puts a very human face on the whole thing, including this giant corporation that tried to make it work.”

Repeated calls to Polygram went unanswered.

Perhaps most embarrassing for Polygram, the festival’s chief beneficiary was media rival Viacom’s MTV Networks, which drew huge audiences for its on-site telecasts but did not produce the event. About the only bright spot is that the concert boosted the careers of some new musical acts.

Clear hindsight

With the clarity of hindsight, sources say Polygram made several mistakes with Woodstock ’94, some of which can be traced to a lack of commitment from Polygram’s corporate parent, Philips. The Anglo-Dutch conglomerate became increasing wary of its association with an event that screamed “drugs, sex and rock ‘n’ roll” and caused Polygram to behave “like it was half pregnant,” according to a Polygram insider.

As a result, according to sources, tickets didn’t go on sale until too late – after college students had gone home for the summer. Another strategic error was granting MTV the right to broadcast virtually nonstop from the concert, which cut into the PPV subscriptions.

John Scher, then the president of Polygram Diversified Ventures, saw Woodstock ’94 as a way to demonstrate how all the components of his parent company’s media empire could be integrated under the banner of a watershed mega-event that Generation-Xers could call their own.

Scher, whose days as a rock ‘n’ roll promoter and manager go back to the ’60s, saw the ’94 concert as a gateway to the new media future. Twenty-five years after the original musicfest, Woodstock would be reborn as the quintessential corporate mating dance, bringing together such youth-obsessed behemoths as Pepsi Cola and Apple Computers, with an A-list of media titans, including Telecommunications Inc. and News Corp. through their joint pay-per-view venture Viewer’s Choice – not to mention the lovechild of the Viacom empire, MTV.

Woodstock ’94 was, as Scher insists, an artistic success that helped propel the careers of such Polygram-distributed acts as Melissa Etheridge, the Cranberries, Blues Traveler and Sheryl Crow.

“It took artists who weren’t headline acts and turned them into headliners,” says Scher. “It showed that a new generation of kids could come together and once again, despite the mud and rain, have a great time. Even naysayers… after it was all over changed their tune and called it an artistic and cultural success.”

But to the corporate powersthat-be who bankrolled the event, that was hardly enough to justify their labor intensive, multimillion dollar gamble. Polygram insiders say the company is still $8 million-$10 million shy of recouping its $40 million-plus investment.

Scher says he has no regrets. But he is back working as an independent under his Metro politan Theatrical Entertainment banner, after splitting with Polygram last winter. The breakup occurred when it became clear the company that took a 40% stake in his venture didn’t share his passion for mega-events, such as Woodstock, and the bluechip Broadway musicals, such as “Jelly’s Last Jam,” that he produced during his four-year relationship with Polygram.

Scher called his divorce from the company “amicable.” But according to many others involved with Woodstock ’94, the three days of mud could have made Polygram a lot of money.

“(Polygram president/CEO) Alain Levy took a lot from his bosses in Holland for getting the company involved with Woodstock,” says Roberts.

“That meant all sorts of delays that hurt us badly. For example, we wanted to sell tickets before kids went home from college, but there was this sixweek period starting in May when people at Polygram were shuffling their feet about whether we would go forward or not, and we lost valuable time.”

In the end, the promoters sold about 200,000 three-day tickets for $135 – 50,000 short of the breakeven number. And more than 100,000 revelers enjoyed Mudstock II for free after security broke down on the second day of the event.

There were other key strategic errors. Those involved with the pay-per-view effort, Request TV and Viewer’s Choice, were disappointed that Woodstock ’94 delivered an estimated 1% buyrate, which translates into an estimated $12.5 million gross – of which about $5.5 million went to Polygram.

“It could have easily been twice the amount we brought in,” says a source involved with the pay-per-view effort. “What happened is Polygram gave MTV too much leeway in what they could show, and that caused people to think they could see all they needed to see for free.”

While MTV was limited to telecasting one song per group per set live, it also ran continuous reports from the site, turning Woodstock ’94 into a signature event for the network. In addition, it served as a launch for MTV’s homeshopping effort, “The Goods,” which sold more than $1 million worth of Woodstock tchotchkes.

But even though Polygram got a cut of what was sold, it pales in comparison to the revenues its deal with MTV for Woodstock may have cost them.

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