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Showbiz online success stories

Four players make name on 'Net

Variety looks at four established Internet players, either based in L.A. or with L.A. offices, that have pioneered new ways of bringing entertainment to the Internet.


Their name says exactly what they hope to create on the Web. Shockwave.com, Macromedia Inc.’s L.A.-based entertainment site, is 2 months old and ready to lure cartoon viewers to the ‘Net in the same way the company’s Shockwave technology has caught on with Website developers.

The site requires that visitors use Macromedia’s Shockwave and Flash plug-ins in order to have interactive and multimedia experiences, but promises to be much more than a showcase for Macromedia technologies. Indeed, Shockwave.com plans to evolve into a major player on the Web to source entertainment talent, according to Stefanie Henning, VP of content acquisition and head of the new L.A. office.

“We are an online entertainment network. I’m comfortable using the term network. … We are another outlet for entertainment. I am solidifying deals with music (companies), film and TV to develop original content for us,” Henning says.

Just as many other entertainment sites, including Pop.com, already have announced, Shockwave is working with “short bursts of entertainment.” While for some this means film shorts, for Shockwave it means customizable greeting cards, cartoons and puzzles that can be edited and saved using Macromedia technologies.

Shockwave also has deals with Comedy Central, Hasbro Interactive and Warner Bros. For instance, “South Park” characters and shorts of “Dr. Katz, Professional Therapist” (both on Comedy Central) can be seen on the site.

Henning says she envisions the site being a place for actors, writers and artists to create two minutes of entertainment to showcase new characters and plots that she says networks and producers will want to keep up with for ideas either for TV or film.

“Content is making tremendous leaps. Networks are using the Web as a resource to develop shows and film,” she says.. While she didn’t specifically mention any exclusive deals with stars to use the site, Henning says she would welcome such pacts.


WhatsHotNow.com might as well be called PopCulturetoGo. The 3-year-old Marina del Rey, Calif.-based startup is quickly becoming the site online to find, buy and impact pop culture.

Not only does WHN sell every type of toy, game, stuffed animal and book for and about characters from “Star Wars,” “Austin Powers” and “The Blair Witch Project,” they also manage the e-stores for Comedy Central, MTV, Fox Broadcasting, Jim Henson Prods. and Stan Lee Media.

But that’s not all. WHN also manages the online stores for stars including singer Alanis Morissette and boxer Evander Holyfield, and they ventured into sports entertainment with e-stores for the National Football League and the National Thoroughbred Racing Assn.

The term manage, however, isn’t completely accurate. WHN is an end-to-end solution. They create the e-store Web site and a seamless link to the WHN server, as well as storing all the merchandise, shipping packages (which is free for customers) and handling customer service for all their clients.

“We have over 100 customer service reps who work three shifts, 24 hours a day. … Last December, we had 12 client stores, today there are over,” says Marc A. Von Arx, WHN exec vice president and general counsel.

The startup is growing so quickly that it shot up from 15 full-time employees in December to 80 full-time employees this month. While Von Arx walked through the enormous warehouse pointing out the thousands of toys and tchochtkes, he added that they will soon open several more warehouses, including one in Europe.

According to Von Arx, the venture’s quick start is due to a combination of founder Rob Fried’s background in the business as a successful film producer and the relationship visitors have with the site.

“We have a ‘hot list’ which is an index of popular culture. (Visitors to the site) can nominate favorite trends and ideas and we have a hot money affinity program,” Arx says, emphasizing that WHN visitors influence content on the site.


It’s hard to categorize L.A.-based Zentropy. The 4-year-old agency has transformed itself from a traditional Web design firm to an e-business consultation, design and incubator company.

“It’s nothing short of a miracle that we’re the last large, independent (agency) left (that formed) in Los Angeles in 1995 like BoxTop and Digital Revolution,” says Steven Voci, Zentropy exec vice president.

CEO and founder Ryan Magnussen agrees with Voci and says he receives at least six calls a week from suitors wanting to buy the company — but Magnussen has other plans.

How has Zentropy thrived? Through redefinition and keeping up with e-business solutions, according to Magnussen. While the agency began as a Web site design firm in 1995, working with clients MGM, Fox, Paramount and others, it has evolved to offer complete e-commerce and marketing solutions for its clients who are in all industries such as Brooks Brothers, General Motors and Southern California Edison.

“The first industrial revolution was about infrastructure, the Coca-Cola’s of the world. … The second industrial revolution is not about content, but context,” Magnussen says.

With this philosophy, he helps his clients build “compelling e-businesses.” This consultation doesn’t end with the design and maintenance of a site, it crosses over into marketing and advertising strategy.

While Zentropy won’t warehouse goods or handle shipping and customer service for e-biz shops, they will consult their clients about who to hire for these services, Voci says.

And the transformation doesn’t end there; Zentropy is also embarking on an incubator program for Digital Coast startups.

“There are two companies that we are looking at (for the incubator program) right now. Phase one is about flushing out the success and viability of the e-business model. … We will provide the facility and build and maintain the Web site,” explains Magnussen, who adds that introductions to key venture capitalists also will be made.

Zentropy will work with startups for a percentage of equity or gross revenue over a period of time.


Prior to its public stock offering, Artistsdirect is hoping for stellar returns on Wall Street.

The Encino, Calif.-based company creates official online artist stores selling merchandise and music for a variety of performers, including the Beastie Boys, Beck, Korn and Tom Petty. The venture features 30 artist-owned sites, or “channels,” and has signed agreements to launch channels with 37 additional acts, according to the company S1 filing.

The music network also has a music search engine, titled the Ultimate Band List, and iMusic, an online community where fans exchange music interests and commentary. Artistdirect differs from many other sites, however, with their talent agency as well as Kneeling Elephant record label.

While co-founder and prexy Stephen Rennie can’t speak openly during the pre-IPO period, he did say he is very excited. And who wouldn’t be? According to the Securities & Exchange Commission filing, the estimated offering amount is $86.25 million.

“Our objective is to be the leading provider of music entertainment, information, community and electronic commerce on the Internet,” the executives wrote in their S1 statement.

Competition is very tight from a variety of sites such as MTVi, L.A.-based Launch Media, MP3.com, and traditional commerce ventures like Amazon.com and CDnow. And many are now working together, such as Columbia House and CDnow, and Universal Music Group and BMG Entertainment.

So how will Artistdirect compete? According to their filing, the Encino company says it will aggressively continue to sign well-known artists. The background of the founders should help — CEO and co-founder Marc P. Geiger was the senior VP of marketing, A&R and new media, American Recordings Inc. and also worked as a talent agent for Regency Artists, which later was acquired by the William Morris Agency. It doesn’t hurt that Geiger also co-founded the Lollapalooza concert tour.

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