Who wants to be a millionaire? Pretty much everyone at the iHollywood Forum on venture capital held Thursday evening in Santa Monica.
Venture capitalists Frank Biondi Jr., Frank Creer and Paul Nadel warned an audience of 500 people that those with dreams of striking it rich with their very own Internet startup need to move beyond ideas based purely on providing original content online.
“What we’re interested in are the technologies that enable people to see the content,” said Nadel, president of East/West Capital Associates. “We’re not in the hit-driven investment business. I don’t think anyone wants to watch a bad short film on their computer just because they can.”
Animation to interactive
Nadel’s company has invested in technologies ranging from San Francisco-based Pulse Entertainment, which provides 3-D animation tools for the Internet, to Veon, a San Francisco company that is working on ways to create interactive video feeds.
Biondi noted that traditional content-providers like movie studios are historically a bad investment, and that’s there no reason to believe that financing pure content plays on the Internet will have any different result.
“There’s a premise that running a studio is a great business,” Biondi said. “It’s not. Making new movies is, in effect, a loss leader. The libraries are what make money.”
In the Icebox
One content play that is getting a lot of attention is Icebox.com, an on-line animation site scheduled for a soft launch some time this month. Talent signed on to Icebox.com includes Glen Morgan and Jim Wong, co-executive producers of the X-Files, Larry David, co-creator of Seinfeld and Steve Tompkins, creator of the PJs.
“A pure content idea is not enough to get funded,” Stanford said, noting that his company is about to close a second round of financing. “We tell investors that besides the business-to-consumer element of providing animation, we’re also a business-to-business company in that the projects we develop could eventually move on to movies or television. That’s what they like to hear.”