Pop.com, the high-profile but long-delayed Netcaster from DreamWorks and Imagine Entertainment, has fizzled before ever hitting the Web. The much-ballyhooed startup backed by some of Hollywood’s top creatives is about to be absorbed by Netcaster and online film business venture iFilm.com.
A deal, which will more likely be structured as a merger rather than an acquisition, is expected to close within the next two days.
Spearheading the talks on consolidating the two companies is Microsoft co-founder and billionaire Paul Allen, whose Vulcan Ventures has invested millions in both iFilm and Pop.com.
Allen earmarked $50 million alone to start Pop.com, which was to broadcast original comedy programming on the Web. But he has apparently become frustrated over the site’s delay in launching. The Netcaster has already spent over $10 million of Vulcan’s money to develop its site and secure content deals.
Pop’s handover to iFilm would provide a graceful exit for a venture that has been stumbling for nearly a year.
The startup has been disadvantaged by lack of Web experience on the part of senior management, the difficulty of securing major talent deals, and lack of attention from its principals.
DreamWorks toppers Steven Spielberg and Jeffrey Katzenberg and Imagine toppers Ron Howard and Brian Grazer have simply been too busy with film projects — “A.I.,” “How the Grinch Stole Christmas” and “Minority Report,” among them — and with running their companies to get directly involved with Pop.com.
Frustrations at the startup have been mounting, with execs recently admitting that the venture was harder than they had anticipated. Reverberation within the dot-com biz could be significant; if Spielberg and company couldn’t create a successful Netcaster, who can?
Discussions between iFilm and Pop have been taking place for weeks. Pop apparently also held talks with other potential buyers including AtomFilms and Z.com.
The future of Pop’s assets and its 90 employees working in Glendale, which include CEO Kenneth Wong, are still being hammered out. Layoffs are likely because of overlapping positions.
If the deal with iFilm falls through, Pop apparently has two other deals waiting in the wings — with either French conglom Vivendi or with Creative Planet.
If the deal with iFilm goes through, Pop, as a branded destination, may never see the light of day, other than as a channel on iFilm. So far Pop has lined up a slate of programming including short films and Webisodic series from Steve Martin, Eddie Murphy and Mondo Media.
Pop’s own recently acquired dot-coms, including Countingdown and UndergroundFilm, would also likely become part of the pact and be folded into iFilm.
That Pop ends up in iFilm’s arms would not be that surprising: Besides the Allen connection, iFilm chairman Skip Paul is friendly with the DreamWorks trio. Paul is chairman of GameWorks, the location-based entertainment venture founded by DreamWorks, Universal and Sega.
After making a splashy announcement last October, Pop has yet to reveal more than a business card on the Web.
Staffers had spoken of a launch date of Sept. 18, but a merger with iFilm all but cancels out such a launch date. No plans for a launch party had been made, and deals for content had been frozen for some time.
“If we conclude a transaction, this is about a partnership,” iFilm CEO Kevin Wendle told Daily Variety. “How we divide up the companies isn’t really important. What’s important is great partners. We’d be honored to be in business with Steven Spielberg, Ron Howard and Jeffrey Katzenberg.
“This brings together some old relationships. We have many friends at Imagine and DreamWorks. It makes sense for us to be talking. It makes sense for everyone.”