Pacts with Rogers Communications for funding

Michael Eisner has grand plans for his made-for-Internet production business.

Eisner’s Tornante Co. has cut a deal with Canadian media conglom Rogers Communications to help fund the production of as many as 30 Web skeins a year through his Vuguru production shingle.

The deal with Rogers calls for Vuguru to become a standalone entity, with Rogers taking a minority interest in the company and controlling Canuck distribution rights to Vuguru productions.

Eisner will serve as chairman of Vuguru, which will assemble its own board of directors. The plan is to recruit a CEO and expand the creative staff beyond the handful of execs who have worked with Eisner on the 3-year-old production venture. Vuguru will maintain its offices alongside Tornante in Beverly Hills.

“We’re going to put the foot to the metal. We’re trying to show that high-quality content with a promotable hook can get an audience on the Web,” Eisner told Daily Variety. “If you can get an audience, you can get advertisers. I think the big upside in the entertainment business in the future is probably not the movie business or other existing businesses. I think it’s going to be story-driven content delivered through the Internet.”

Vuguru has produced several Web skeins since the shingle was formed in late 2006, notably the serial suspenser “Prom Queen” and sports comedy “Back on Topps,” starring Jason and Randy Sklar. (Tornante bought the Topps baseball card and bubble gum company in 2007.)

Eisner said Rogers execs approached him about becoming an investor in Vuguru. He hadn’t been shopping for a partner, but he’d gotten to know Rogers’ senior management team after the company acquired Canuck rights to “Prom Queen” as well as “Glenn Martin, DDS,” the stop-motion animation series that Tornante produces for Nickelodeon.

A number of high-profile Internet production ventures, some with deep showbiz pockets, have folded or dramatically scaled back operations in the past year, including 60Frames, Mania TV, Disney’s Stage 9 and Turner Broadcasting’s SuperDeluxe. Among the notable ventures that are still investing in the realm are Will Ferrell’s FunnyorDie, Sony’s Crackle, MTV’s Atom and Reveille through its partnership with MSN.

Eisner said Vuguru intended to ramp up production long before the deal with Rogers came to fruition. Vuguru has been able to keep its shows from running deficits because it keeps a tight rein on budgets. And it has been successful in recruiting sponsors and licensing its shows in foreign and ancillary markets. A tuner adaptation of “Prom Queen” is also in the works, while “Back on Topps” is being developed as a TV series by Comedy Central.

Eisner said the company will focus squarely on scripted series running 120-200 minutes in total. Among the projects in the works is “The Booth at the End,” which he described as “In Treatment” meets “The Twilight Zone,” and “Pretty Tough,” revolving around the lives of young femme athletes. Vuguru productions are generally budgeted at $3,000-$6,000 per minute, though costs vary depending on the talent involved and the source material, among other factors.

But even as the company expands its scope, another major factor in keeping costs down is to be selective, he said.

“You only put things in development that you’re sure you’re going to make,” Eisner said. “The first time we talked about ‘Prom Queen,’ I knew we were going to make it. The biggest waste of money in this business is script and talent abandonment.”

Vuguru has taken a number of different routes in the distribution of its Web product. “Prom Queen” got a promo boost in 2007 through its partnership with MySpace, which had a 12-hour exclusive window for each seg. “Back on Topps” has its home base on FoxSports.com but is widely distribbed on other Internet vid sites.

The ability to experiment with distribution strategies was one of Rogers’ motives for getting into business with Vuguru, Eisner said.

Rogers has a wide footprint in the Canuck media landscape, from cable TV systems to local broadcast stations to Internet and telephony services.

Whatever the distrib scenario, his experience has taught Eisner that the key is to promote the shows through social networks and other online media and make it easy for viewers to find the episodes on advertiser-friendly video sites.

Eisner, who ended his 21-year tenure as Disney CEO in 2005, said his approach with Vuguru was shaped by his experience in finding creative solutions to fiscal constraints when he worked at ABC and Paramount in the 1960s and ’70s.

“Everybody said we couldn’t get anyone to do movies for under $10 million, but that’s what got us things like ‘Footloose’ and ‘Saturday Night Fever,’ ” he said. “I’m always more interested in doing things that are uniquely challenging and that nobody thinks will work.”

Filed Under:

Follow @Variety on Twitter for breaking news, reviews and more