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Percenteries look hard for next point-and-click geniuses

Hollywood’s talent pool is about to get a little crowded.

The recent and certainly ongoing explosion of entertainment dot-coms or technology plays has created a new batch of clients besides the usual stars and scribes for Hollywood’s major tenpercentaries to choose from.

In just a mere two years, Creative Artists Agency, the William Morris Agency and Endeavor have established themselves as the powerhouse agencies of Web representation, aggressively building up and sending out their armies of agents to sign everyone from giants such as British Telecom, which is seeking programming for European Web users, to aspiring filmmakers to shoot pics that later appear on Netcasters such as iFilm.com or AtomFilms.com.

A host of agents — Dan Adler (CAA); Lewis Henderson, Xavier Kochhar and Lisa Shotland (William Morris); Garrett Chau and Reza Izad (United Talent Agency); and Lon Rosen (Endeavor) — are now directing the dot-com representation charge.

Similarly, on the management front, Michael Ovitz’s investment and consultancy venture Lynx Technology Group, has adopted its own collection of clients, as have management production outfits including Bender-Spink and Pure Entertainment, among others.

But in a town that’s built on megarevenue, these upstart divisions are hardly profit centers.

They’re all hoping that will change. Despite an air of uncertainty surrounding the new digital economy, new entertainment creators focusing on Web distribution for their content or technologies are also looking to be handled with care. They need to be introduced to Hollywood’s decision makers, and discoveries are being made.

Take Tom Fulp.

At 22 years old, the Philadelphia native is as un-Hollywood as it gets. Yet as the guru behind Netcaster Newgrounds.com, Fulp recently grabbed the attention of every major Hollywood-backed dot com — from MediaTrip.com to Z.com — as a potential acquisition.

The reason: Fulp understands the Web, being one of few Netcasters to generate profits from advertising and attract 1.2 million unique visitors per month to his Website — a destination for fiercely funny celebrity-trashing games and short films. And that’s without advertising nor outside investors.

Fulp also sees Hollywood’s desperation and inexperience.

After a week’s worth of meetings in Los Angeles, Fulp decided not to sell. Instead, Fulp plans to continue carrying on business as usual. But not without a little help from William Morris’s new media department and Bender-Spink. William Morris is handling strategic investments and deals to expand the company’s revenues while Bender-Spink is handling the syndication of Newgrounds’ content to other Web sites.

“William Morris and Bender-Spink have helped me realize that I’m actually doing what a lot of companies are trying to do but are struggling to accomplish,” Fulp says. “I felt out of the loop, but I left feeling I’m not so far behind everyone else.”

Web Hunt

Similarly, CAA has adopted newcomers Jeremy Hunt, 26, and Bruce Branit, 32, the duo who in July, posted their first pic, the f/x-heavy “405 The Movie” on the Web at their own site and on iFilm.com.

Pic, which focuses on a jetliner that lands on a Jeep Cherokee driving on Los Angeles’ always busy 405 freeway, has already attracted over 1 million downloads since its bow. The filmmakers spent three months creating the short on their home computers with f/x software they already owned, a digital video camera and virtually no budget.

Until recently, Hunt and Branit spent their days working as f/x artists at Digital Muse, creating visuals for “The X-Files” and “Star Trek: Voyager.” They spent nights working on “405.” An agent with CAA’s new media division viewed the pic online. A week later, a deal from the tenpercentary was on the table.

How times have changed.

Once often ignored, it’s the Internet divisions at the agencies that are now in the spotlight, giving its toppers more respect and kudos for remaining patient all these years, many of them struggling through the disappointing CD-ROM years. CAA has now built up a team of 20 agents and boasts an in-house New Media Lab; William Morris boasts a staff of nine; Lynx Technology Group has 12.

“The agency has committed resources to the area for close to a decade,” says Dan Adler, head of new media for CAA. “Only recently was the space considered mature enough to a point where a bigger commitment was warranted.”

Fulp and “405’s” Hunt and Branit tend to be Cinderella-like exceptions for tenpercentaries. The big money and power is tied to the corporations with a new technology or strategy for changing the entertainment biz.

After CAA took on iPIX, a technology that enables Web users to tour sets or interact with films via interactive photographs, the company has inked deals with Pop.com and has been adopted by studio Web sites for pics such as Paramount’s “Sleepy Hollow” and Warner Bros.’ “The Perfect Storm.”

After Endeavor signed Netcaster SightSound.com, the company inked film distribution deals with Miramax and Artisan Entertainment. The agency is now looking to open up NASA’s archives of space footage to film and television productions via a new endeavor called Dreamtime Holdings, which has access to NASA footage and will install Webcams on the space shuttle’s future flights.

It’s the management firms that opt to go with the content creator, the Webisode writer, the Flash animator or Website designer. That’s not to say that the agencies don’t negotiate dot com deals for talent. William Morris inked lucrative Web-production deals with Shockwave.com for in-house clients including “South Park” creators Matt Stone and Trey Parker, David Lynch, Tim Burton and Harland Williams.

Big decisions

Tenpercentaries have enough to handle with their already-signed stable of clients. It’s deciding which outside company or client to take on among that is becoming tough.

“When we choose a company, we ask what they’re trying to do, synergistic with what we’re trying to do?” says Chau. “Can it service UTA’s clients?” For example, the agency took on Yourmobile because it could help promote the music of its clients by offering up cell phone ring tones that sound like an artists’ track.

Says William Henderson, head of new media for the William Morris Agency: “It really depends upon who’s involved in the company, which means management. Today, management means it’s backed by solid investors. When you first look and you see someone experienced in the industry, that obviously means a lot. But who has invested in the venture is just as important.”

The price for techheads: Agencies receive retainers, as well as a percentage of deals or equity plays, among other forms of revenues, depending on the company.

The sudden interest by tenpercentaries in dot coms and their tech counterparts is creating a competitive marketplace, some say, with agencies duking it out for the same companies. But that might just be the perception. Everyone’s playing nice, others stress.

“There’s only been a couple of times in the last year where there was a company that we wanted to represent that one of the other companies was also in the running for,” Henderson says.

Despite the newly-opened door into the biz for every aspiring Hollywood wannabe, not all of the industry’s agencies or managers are welcoming tech-savvy newcomers with open arms.

Although ICM’s Jeff Berg has emerged as a player within the dot-com community, his agency has no set division in place.

But the holdouts eventually come around.

Once quiet on the Internet front, UTA has formed a New Ventures department — affectionately called Area 51 — with eight staffers, co-headed by Garrett Chau, to handle all things new media.

“We’re as active as any of the other agencies,” Chau says. “We just haven’t spent the last year and a half being as loud about what we do as our counterparts.”

And aggressive they are. Staffers recently repped rapper Eminem’s roughly $2 million deal with New York-based hip-hop entertainment and e-commerce site Hookt.com to create 26 Webisodes of an animated “Slim Shady Show” and host the singer’s official site, SlimShadyWorld.com. Eminem, who retains complete creative control of the project, is Hookt’s first major celeb deal to date. Company recently closed a $12 million round of financing.

UTA also handled the deal between “Lil’ Pimp” creators Peter Gilstrap and Mark Brooks and Joe Roth’s Revolution Studios to cross over the animated Webisodic series from MediaTrip.com to the big screen, the first serialized animated Web project to make the leap to features as an animated feature. UTA also helped write the business plan for and launch Magic Johnson’s Urbanmagic.com.

“It’s about leveraging a person’s brand identity into other areas outside of film or television,” Chau says. It also consults individual companies trying to grow a non-Hollywood business with direct applications to the entertainment world.

“We’re not trying to be venture capitalists, we’re not trying to be incubators,” Chau says. “We’re not seeking to do anything more than build a company that represents its clients in the best way possible.”

Despite all their attempts, however, one prospective client continues to allude attempts for representation — the Netcasters.

AtomFilms, iFilm and Icebox, among the rest of the pack, still are up for grabs. Digital Entertainment Network was never repped by a tenpercentary.

But the Netcasters aren’t seeking representation.

“That would be like saying that NBC or Fox has an agent that represents them,” says Mika Salmi, chairman and CEO of Seattle-based AtomFilms. “It doesn’t seem like a good move to have one firm represent us.”

Kevin Wendle, CEO of Hollywood’ iFilm agrees: “I have no doubt that there are really talented agents out there, but I feel it’s important that we remain neutral. In the long run, it doesn’t make sense to align with one agency and anger another agency.

“There are a lot of companies who are trying to be make inroads in the entertainment space that are managed by people who aren’t affiliated with the entertainment industry, so they need all the help they can get. But our company is made up by people in the industry. We really don’t need that extra effort.”

The tenpercentaries still feel they’ve got a lot to offer.

“The Netcasters want to keep their independence, but they need help at the same time,” says one high-level new media agent. “Someone needs to help them land the big deals.”

The alternative: If they’re not repping them, agencies are starting Netcasters.

Z.com was founded by Brad Grey’s Basic Entertainment and 3 Arts Entertainment, together with Internet incubator Idealab (eToys), Jerry Bruckheimer and Maverick Records exec Guy Oseary to offer up content from Bruckheimer, Chris Rock, Oliver Stone, Ellen DeGeneres and the Red Hot Chili, among others.

While agents may be frustrated by the stubbornness of Netcasters, an even bigger thorn is emerging for dot coms, namely the same agencies trying to help them.

Reps from AMG, for example, swooped in to represent writers and program creators for Romp.com, demanding $5,000 per episode, rather than the usual $1,000 fee the site was paying. Romp declined and hired new writers.

In May, UrbanEntertainment.com sold the film rights to its animated “Undercover Brother” Web series by John Ridley to Universal for $2 million, with Imagine Entertainment interested in developing the project.

The deal “South Park’s” Stone and Parker inked with Shockwave.com for 48 Webisodes and complete creative control of the series was valued at around $2 million. William Morris negotiated that pact.

“We have definitely raised the bar,” says one rep. “We have raised prices for our clients. But we realize the effect it’s having on companies, as well. We don’t want to put these companies out of business.”

Whether successes are coming now or later, Hollywood’s agents and managers say they’re in the Web space and the tech race for good.

“The people who run (UTA) understand that change is inevitable,” Chau says. “If you don’t embrace change, change can leave you behind. It’s not about how much money you throw at something, but how serious you take something and the patience and wisdom to say that we’re in it for the long haul.”

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