Personality strife, high valuation kill deal, sources say
HOLLYWOOD — Pop.com’s bubble burst on Friday with the failure of merger negotiations with online film portal iFilm.
In an e-mail sent out to iFilm’s staff, CEO Kevin Wendle revealed that discussions with Pop.com “have ended and have not resulted in a transaction. The companies will continue to enjoy many overlapping shareholding and personal relationships.”
An iFilm spokeswoman said the company had no official comment on the dissolution of the negotiations.
Calls to Pop.com — the fledgling Netcaster from DreamWorks and Imagine Entertainment — were not returned, and a DreamWorks spokeswoman declined to comment.
The next move is uncertain for the troubled Pop.com. The list of suitors rumored to be circling the company is a who’s-who of big money Netcos. Those named as potential knights in shining armor range from the mammoth America Online and Vivendi to fellow Netcasters like AtomFilms and Z.com.
Why deal failed
Sources close to the negotiations said the deal fell through due to a combination of behind-the-scenes personality conflicts between the players and Pop’s insistence on putting a high valuation on the Netco — a tough sell, since a pure Internet content player has never turned a profit.
A tentative launch date of Sept. 18 was originally floated by Pop.com staffers, although the Netco’s home page shows no indication of progress. The same logo asking for film submissions and a list of press releases have been the only signs of life from the Web site for almost a year.
The continuing machinations over control of Pop.com reflect a stunning fall; just six months ago, the Web site held a meet-and-greet party at the Yahoo! Internet Life Film Festival. DreamWorks topper Jeffrey Katzenberg appeared with Imagine Entertainment toppers Ron Howard and Brian Grazer on the second floor of a cabana at the Chateau Marmont, attracting an adoring overflow techie crowd in the courtyard below in a scene evoking “Evita.”
Pop.com was backed by Microsoft co-founder Paul Allen’s Vulcan Ventures, which coughed up $50 million to launch the Netco. This money was bookmarked to acquire and create comedic shorts — a “pop” of entertainment.
First film to be acquired by Pop.com was “The Dancing Cow,” a slickly produced 20-minute pic by Taz Goldstein and Robert Moniot that focused on a filmmaker whose work is mistaken for another helmer’s by a top-level studio exec.
Amid the exec shuffle and other overt problems with Pop.com, some filmmakers who were once thrilled with the possibility of working with the likes of Steven Spielberg were soon looking for ways to distance themselves from the site.
Some grew tired of waiting for the site to launch, expecting the Netco to bow at Internet speed and not at the slower pace usually associated with development at the studio.
In addition, Pop.com paid for films in stock options, a plan that grew less savory as rumors of trouble at the site abounded and the climate for Netcos on the stock market became stormy.
Others were expecting mentoring from the top talent behind the Web site — and then were disappointed when the execs seemed not to know who they were.
The wags at iFilmPro, iFilm’s industry insider Web site, met the latest twist in the Pop.com saga with aplomb.
“The deal is off so shut the hell up, people,” posted one Netizen.