Last week, Sony announced the transformation of its struggling online video site Grouper to a mini-studio dubbed Crackle. In addition to the more regular fare of professionally produced and user-submitted video, the site’s latest incarnation hopes to differentiate itself by attracting top online talent through contests that award winners with cash prizes and access to various professional media outlets.

Crackle’s founder and co-president, Josh Felser, celebrated the site’s apparent advantages among the competition by noting, “We’re the only internet company that’s actually integrated into a studio. We are very focused on liberating the next-generation creator-writer from YouTube; we offer funding, syndication, promotion and a pathway to Hollywood despite cynicism.”

I guess Felser forgot about MySpace.

A month after the social network relaunched MySpace TV and the MySpace Minisode Network, the “place for friends” announced its latest thrust in the push to establish itself as a top video destination. MySpace will team up with its old pal and owner Fox, and new buddy the Producers Guild of America for The Storyteller Challenge.

Beginning September 4, wishful producers will be able to submit original five to seven-minute pilots to a dedicated MySpace page in hopes of being one of two winners to receive $25,000 and a shot at a development deal with Fox. Executives from the network, members of the PGA, and user rankings will determine the winners, to be announced January of next year.

CEO of MySpace, Chris DeWolfe explains, “The Storyteller Challenge gives aspiring producers the potential opportunity to cut through Hollywood’s red-tape and get an audience with top brass in the television business, all while cutting their teeth with the MySpace community.”

Huh. Sounds familiar. And it will probably sound even more familiar soon. There’s an abundance of untapped talent lost in Hollywood’s bureaucracy of limited access, and if video sharing sites with online contests prove to be an effective means of discovering new stars, expect the other major studios – Disney, Paramount, MGM, NBC Universal, and Time Warner – to follow suit.

As Nick Gonzalez of TechCrunch remarks on the deal, “It’s a good time to be a film student.”
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