Michael Eisner at NATPEToday at NATPE in Las Vegas, legendary Hollywood creative and entertainment business leader Michael Eisner, CEO of The Tornante Company and its digital entertainment studio Vuguru, shared his thoughts about originally produced content for the Web.

First off, Eisner is the first to admit that he doesn’t know how the industry is going to play out. “I don’t know if it will be evolutionary or revolutionary…but it can’t not happen” (the growth in content made for the Internet), said Eisner. He added that a “death march” has been going on for other media” (i.e., Cable, TV). They are in trouble because there is a more efficient way to share content around the world with the Internet.

Regardless of the distribution strategy (TV, Cable, DVD) – it’s still about making great, high quality content. He added that when his job was on the line a few times over the years, that “it wasn’t a new technology that saved his ass—it was a show.”

Advertising & Cost Controls

Eisner stated that as far as he can see right now, there is no set model for what works and what doesn’t for producing and distributing made-for-Web series. The industry just has to keep developing new ways of doing deals to attract advertisers, talent, and audiences. For example, they have sold Prom Queen by territory across 45 countries, offer product placements in shows, and also include embedded ads.

Speaking of advertisers, he cited that online ad spots for FOX’s The Simpsons command higher rates than for its broadcast spots ($30 CPM vs. $60 CPM). He also noted that no one thought that the “Brought to you by…” 3-second sponsor spot, or the 15 and 30 second ad breaks in a 7 minute episode would work. Neither have been met with significant negative viewer concerns. So apparently they do. It’s all about experimenting to see what sticks.

Controlling production costs is also critical. He maintains that other digital studios have gone out of business because they spent too much on making the content and couldn’t recoup their costs fast enough. Vuguru made one of their shows running at 150 minutes for $250k. He also mentioned the Hollywood Guilds (e.g. SAG, WGA) as playing an important role in helping this young industry get off the ground, citing flexibility for independent pay negotiations with talent on productions that cost less than $25k per minute.

Vuguru’s Latest Series: The Booth

Vuguru, producers of the hit Prom Queen web series franchise, Foreign Body, Back on Topps, and the upcoming original series The Booth, plans to produce 10 to 30 shows per year. The launch date for Booth has not been set yet, but the trailer, which screened at NATPE, was compelling. “For Vuguru, we are concentrating on the first window only—the Internet.”

Top photo courtesy of NATPE.

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