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Pop goes the business plan

DreamWorks, Imagine fumbled to launch venture

Hollywood may now be a dot-com player, but it’s stumbling along the way.

Consider Disney’s about-face with its Go.com portal strategy.

Or the high-profile exit of execs from Warner Bros.’ Entertaindom.com due to parent company politics.

Of course there was also the embarassing shuttering of Digital Entertainment Network, the much-hyped youth-skewing Netcaster, now defunct and bankrupt. Its Hollywood-loving and industry-born toppers were apparently more interested in fame, fortune and fancy parties than distributing Internet programming that would appeal to its Gen-Y audience and generate revenues.

So it really isn’t that surprising that despite the big names of Jeffrey Katzenberg, Steven Spielberg, Ron Howard and Brian Grazer, as well as $50 million from Microsoft co-founder Paul Allen backing comedy site Pop.com, the Netcaster has had a tough time getting off the ground.

Unveiled last October, the much hyped venture originally expected to feature original programming created in-house and live events toplined by A-list stars, will now finally bow 11 months later in September, with content coming from actor Steve Martin, Eddie Murphy, Matthew McConaughey and Drew Barrymore, as well as complete unknowns that have submitted their own works.

The delays are being attributed to inexperience.

Although well-respected, Pop CEO Kenneth Wong, a former Walt Disney Imagineering exec, has little to no Internet experience. Internal indecisions and frustrations among management, the lack of time available from its high-profile backers at DreamWorks and Imagine, a lack of major talent deals, as well as the ongoing search for a major dot-com partner or merger, haven’t helped.

Promised content on the site created by Spielberg or Howard may never happen. The helmers are busy prdoucing their features like “AI,” “Minority Report,” “How the Grinch Stole Christmas” and later “Big Fish” and when it comes to choosing between a big picture that could gross hundreds of millions of dollars or producing a short film for the Web, the duo will likely choose the silver screen.

With so many dot coms launching and raking in millions in advertising with sometimes less than entertaining content, both DEN and Pop’s Hollywood players believed bowing a new venture on the Web would be easy.

With inexperience comes fear. Industryites say that while Pop has spent $10 million on its venture, the company’s biggest stumbling block has been its too cautious approach to making its site perfect before the big bow.

“For awhile, it was easy to launch an Internet company and make a billion dollars,” says one high-level Internet executive. “People went into it thinking, ‘no big deal — we’ll just do this thing.’ ”

“Pop is a great example of ‘all we have to do is leverage our names and make a billion dollars.’ That is clearly not the world we live in anymore. If we had Jeffrey Katzenberg, Ron Howard and Steven Spielberg, we could do a lot with them. Pop needs a strategy that understands how to extract great things from these guys.”

DEN’s management has now departed its lavish warehouses in Santa Monica and moved back to former positions. The remaining millions worth of computer equipment and Ford cars have been auctioned off.

Imagine’s Brian Grazer and DreamWorks’ Jeffrey Katzenberg have openly admitted that what they’re trying to launch is harder than they or Pop’s other execs ever imagined.

Other Hollywood players that have helped launch their own entertainment dot coms have learned the same lessons along the way.

“This is no less hard because it happens to be the Internet,” says Joe DiNunzio, CEO of Z.com. “There were probably some people drawn to this for a quick hit. I don’t think that those people are going to last. It’s about building up a business and carving out your niche and your brand. That takes years and not days. If you’re not fully committed, get out.”

“At the end of the day, it’s not about technology,” Icebox.com Steve Stanford says. “It’s ultimately going to be about the product. The industry does a pretty good job at finding and developing talent and those are the core skills that us entertainment guys bring to the table. People who understand Internet business models aren’t going to build great entertainment companies and people who understand the entertainment industry aren’t going to create the best dot coms.

“There’s really no magic to what we’re doing. What’s differentiated us from the beginning is that we focus on talent and great storytellers and we’ve put together a great team that knows what they’re doing.”

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