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Shockwave to trim biz ties, cut staff

Firm to focus on interactive gaming, not original content

After spending millions to ink major talent deals for original entertainment programming and seeing little in return, Netcaster Shockwave.com said Tuesday that it is refocusing its efforts away from Hollywood celebs and more toward interactive gaming.

To cut costs, the company has laid off about 20 employees in its Los Angeles and San Francisco offices, including some in creative production and administration. Shockwave has a total of 170 employees.

Production staffers affected by the layoffs will finish work on projects in the pipeline for Tim Burton, James L. Brooks, Matt Stone & Trey Parker, David Lynch, Chris Kattan, Jim Belushi, Ben Stein and Harland Williams, among others, before leaving their posts beginning in October. Some will be kept on until that time as independent contractors.

The move comes after former Pixar Animation Studios chief financial officer Lawrence Levy joined Shockwave as CEO in June (Daily Variety, June 14).

Levy balked at the company’s spending to land top talent and has decided to button down operations as Shockwave nears an IPO, slowing the pace of future celebrity contracts and focusing more attention on online games, for which Shockwave is best known on the Web. Most, if not all, of the celeb-driven projects already in the works are still expected to be launched and showcased on the Shockwave site, which gets 6 million visitors per month.

H’wood ties wither

Tenpercenteries — especially the William Morris Agency, which represents most of the site’s talent — will no longer be able to rely on Shockwave as a big spender for Web content created by their clients.

Under former CEO and now chairman Rob Burgess, Shockwave spent more than any other Netcaster for original programming.

In a run of spending that began last December, “South Park” creators Parker and Stone landed $2 million in a combo of cash and stock to create 39 animated shorts and Williams received $75,000. Brooks’ animated project is costing Shockwave $12,000 per minute of video. None of the company’s celeb-produced projects has bowed online, with some even said to be too crude to ever air alongside games that attract younger Netizens.

Execs from Shockwave declined to comment officially, but sources at the Netco said, “The new management team is looking at the business from the top to the bottom. We expected to see some change. Interactive games will be given more emphasis; it’s the most visited area of the site. That’s been the goal of the company for a while. We want to fully embrace the medium.”

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