News Bytes: November 12

Media Vets Launch Digital Entertainment-Focused Agility Studios; Gets Funding
via paidContent.org

A new digital studio called Agility Studios, started by three online vets, has launched today. The company, based in Los Angeles, has been founded by Scott Ehrlich, former VP of media at RealNetworks, who will serve as the company's CEO; Larry Tanz, till recently the president and CEO of LivePlanet, will now be the president and COO; and Keith Quinn, recently SVP of production & development for LivePlanet, who will oversee programming and production as the company's chief creative officer.

The company has also received funding from Colorado-based Mantucket Capital, which usually invests as a PE firm or provides distressed capital. The amount was not disclosed, but is in the "several millions", Ehrlich told me. The reason he went outside the traditional VC route was because he believes creative development requires a different kind of capital from VC money, with a longer term horizon.

The studio will work with content creators to provide infrastructure services that include business and creative development, financing, distribution, sponsorship and advertising sales, operations, business affairs and back office support. The programs or shows its develops would be distributed through various partnerships online, and then look at other platforms like mobile and TV. No clients have been announced, but Ehrlich tells me they will announce some in the next few weeks. To help achieve its goals, the company has also hired other execs from the entertainment industry: Shannon Pruitt (formerly of Fremantle and Mark Burnett Productions) as SVP of Integrated sales & sponsorships, Zev Suissa (formerly of DigWorks), as VP of production & development and Jason Turner (formerly of Fremantle) as VP of distribution & sales. Some more details in the release.

Of course the competition in the space is heavy, with all kinds of digital studios from startups (Deca, NextNew, 60Frames, Vuguru, Break and others) to bigger media companies incubating their own projects (Disney, NBC and others). Then there is the consumer adoption factor for original shows online, a nut no one has been able to crack from a business model perspective yet.

Ehrlich hopes his connection and his team, the long term money, and lessons learned from the first-gen digital studios, give them a better chance of figuring out the business, well, long term. It will focus on being a B2B company and also won't get into the distribution game itself (via its own video portal, for example), something Ehrlich thinks has tripped up some of the other companies in the space who try to do everything along the value chain.

Meanwhile, this new company begs a question: what is happening with LivePlanet, the once hyped digital studio founded by Matt Damon, Ben Affleck, and Chris Moore? The two senior execs above have joined Agility; the others listed here on LP's website have left as well. It still has a bunch of projects going on. I have been hearing rumors about the company's potential sale for a while, but Tanz wouldn't comment on it when I asked. More when I find out....

Gartner Sees $1.5B for Web Studio Video by 2012
via NewTeeVee

Gartner put out a report this week on so-called “protail” video content, estimating that worldwide advertising revenue for “the segment between professionally produced content and user-generated content” would exceed $1.5 billion in 2012, up from $75 million in 2008.

Some thoughts:

· The definition of “protail” content doesn’t really satisfy me. According to the release it includes Dr. Horrible’s Sing-Along Blog, which I very much consider to be “professionally produced.” Further detail on the definition includes “higher-quality production and content produced in a more consistent or episodic manner…how-to, scripted sitcoms, scripted dramas, new forms of reality programming, niche news and lifestyle content (travel, food/cooking).” That means just about anything that isn’t personal sharing, viral vids, or ripped versions of TV shows, right? Gartner clarifies that “digital studios can create four-minute protail episodes for between $2,000 and $5,000″ — but then that doesn’t apply to Dr. Horrible, whose costs totaled six figures.

· $75 million is NOT a lot of money. Beyond the general economic malaise, no wonder so many folks are laying off people and cutting back plans. But…yay! $1.5 billion sounds very nice, thank you.
· Gartner’s Allen Weiner REALLY feels there’s a hole in the market for “‘clean, well-lit places” for this protail content. His proposed alternative to big sites like YouTube and Yahoo Video would help connect advertisers to content, and make it easier for consumers to find good content. This idea seems a bit shaky — it’s not like video portals out there such as Crackle, Veoh and Metacafe aren’t doing their best to figure out whatever needs they can address. And meanwhile Revver, probably the closest thing to what he’s talking about, seems to be down again this morning.

· One interesting, but somewhat unsatisfying, tidbit: Gartner was able to extract an exact number of views for Dr. Horrible, something we haven’t had much luck with. According to the report, “A one-week run on advertiser-supported Hulu.com netted more than 1.1 million streams.” Was that the first week, though?

Thumbplay Trims Headcount To Prepare For Prolonged Economic Downturn
via mocoNews.net

Thumbplay, a New York-based mobile entertainment company, said today it is trimming its workforce for what they are expecting to be a prolonged economic downturn. Thumbplay wouldn't specify how many employees would be let go, but confirmed it was much lower than the 25 percent reported by Silicon Alley Insider. A spokesperson said the total number of employees is under 100 employees.

In an emailed statement, CEO Are Traasdahl said: "Today, we informed members of our team about reductions in our staff. While difficult, these personnel decisions recognize the realities of the economy. This is preparation for what all indicators show will be a prolonged economic downturn. Thumbplay, like every responsible company out there right now, is preparing against future risk."

Trassdahl said 2008 is on track to be a strong year, with revenues expected to grow by more than 50 percent. Even by conservative estimates, he said next year will also deliver growth. The company is in a difficult position in the mobile content industry, where it is forced to either market directly to consumers, which can be costly, or to partner with carriers and share revenues. In March, the company announced it raised $18 million in venture capital. Thumbplay also has a number of high-profile partnerships, including deals with Cellular South, Comcast (NSDQ: CMCSA), MTV, AOL (NYSE: TWX), MSN, and has relationships with the four major record labels.

MySpace Launches PrimeTime App
via NewTeeVee

Social network MySpace launched its new Primetime application today, which lets users watch full-length content from their user homepages and profile pages.

To use the new Primetime feature, users must first download the free app, but once it’s running they will have access to premium content from Hulu, Warner Bros., Sony as well as MySpace originals like Roommates. The player offers sharing through links and embeds, as well as a thumbnail links to related content and a searchable directory of additional content.

MySpace says this new PrimeTime has the potential to monetize more than 150 million pages with video content, and mathematically that is possible. The company arrived at this figure based on comScore numbers saying the site reaches 76 million people a month and assuming each of those people installed the app on both their home page and profile page. Voila! You’ve got 152 million. Of course, that’s dependent on all users installing the app in both places.

In addition to the new app, MySpace redesigned the Primetime home on the site with a more pronounced player and easier searching for content across TV shows, movies, originals and channels.

While Hulu is a joint venture between FOX and NBC, the premium content company isn’t exclusively aligning with the FOX-owned MySpace social network. Hulu is also part of Facebook Connect and was supposed to launch that aspect of its service back in August.