Onlines plot while TV plods

Dot-coms wrestle with present, look to future

In this story: Present and future Competing, planning RELATED STORIES, SITES

By Dennis Michael
CNN Showbiz Today Correspondent

LOS ANGELES (CNN) -- How quickly things can change in the dot-com world!

In August 1999, the Digital Entertainment Network was going full-tilt. At each cubicle at its Santa Monica offices, DEN employees readied for an anticipated flood of viewers by producing music shows, dance and club coverage, generation Y travel programs even Web soap operas and science fiction.

These programs were not fodder for TV networks or syndication or even cable; they were Web programming, and their time had come, said Eddie Sotto, DEN's executive vice president of creative affairs.

"DEN is really the answer to what network television should become in the next century," Sotto said. "It's really a 21st century network of niche programming."

Or, it would have been, had it survived into the 21st century. DEN's offices are empty now; the bright, street-smart hip-hop graffiti decor no doubt painted over. The Digital Entertainment Network exists now only as an example of the hubris of the Web-driven boom of the late '90s.

Another victim of dot.com woes is Pseudo.com

Inside.com analyst Greg Lindsay offers this epitaph: "The Digital Entertainment Network was a victim of their own hype, essentially. They predicated their future success on the idea that generation Y would be the be-all, end-all market; that instead of watching television, they'd watch entertainment on the Internet. Well, no one watched."

Hardly anyone could. The gap between today's computer realities and tomorrow's cyber hopes is a perilous chasm.

The vast majority of the Web-enabled today are still sipping their data at a plodding 56K dial-up speed. Broadband connections like DSL and cable modems are still the exception rather than the rule, and without them streaming Web video is but a jerky little frame the size of a matchbox -- something exciting in theory but unwatchable in practice. It's no way to compete with, let alone replace, the established television empire.

"People don't watch TV because they find the experience of watching TV itself really neat," says Lindsay of Inside.com. "They hear about a show, and they watch it. You have to give that kind of awareness to an Internet show and you have to make it simpler for people to watch, too. …"

DEN wasn't the only dot-com to learn this lesson the hard way. Pseudo.com had expensive skyboxes at both the Republican and Democratic National Conventions, Webcasting the proceedings in a way they promised would revolutionize electronic political journalism. Today, it's gone.

Pop.com was partially funded by DreamWorks SKG, promising a new kind of entertainment on the Web. Pop.com fizzled before it launched.

One high-profile online entertainment project that never got off the ground was pop.com, a venture with backers such as Steven Spielberg

Pixelon.com promised streaming video to rival TV. Its creditors are seeking to break it up in court and retrieve what they can. APB Online tried to be the Web's answer to Court TV, only to end up in court itself, filing for chapter 11 bankruptcy.

Tomorrow didn't come in time for them.

"You can't write into the business model, 'We're going to wait five years until everyone has a broadband connection,'" says Lindsay. "Well, good luck in trying to survive those five years in this market."

Some dot-coms wanting to cash in on streaming video have realized they must compete with the TV networks in a different way to survive until tomorrow finally gets here.

MediaTrip.com, for example, is attempting to play to the Internet's strong suit: interactivity.

"Rather than just saying, 'Hey, here's a show, lets put it on for 10 minutes,' we're thinking about how do we put up video material and animated material and engage viewers to interact with it somehow," says Austin Harrison, MediaTrip's CEO. "That's where the Web is effective and that's what we're trying to focus on."

Zilo.com says it has found the one niche market where the future already has arrived, where high-speed connections are commonplace: college and university campuses. The music industry, which has been scarred by a newcomer called Napster, has learned this already.

That's a niche that can be successfully served today, says Zilo.com CEO David Isaacs.

"You're looking at a demographic of about 10 million college students who have access to broadband today, and if you talk to a college student, you'll find their usage of computers and the Internet is 100 per cent pervasive," Isaacs says. "They use it for everything much more so than those outside the college demographic."

But Zilo and MediaTrip are still a crapshoot in the increasingly uncertain new economy.

"In Hollywood," according to the cliché, "nobody knows anything." On the Web, it's even more true.

"To go back to that old, tired metaphor, this is like TV in the '50s," says Lindsay. They're still kind of figuring out how this is supposed to work, and maybe in 10 years they'll know how to do it."

If they survive, that is.

Dot-coms wrestle with present, look to future
October 23, 2000
MTVi cuts 105 jobs
September 27, 2000
Pseudo Programs is latest victim of dot.com shakeout
September 18, 2000

Inside.com
Pseudo.com
MediaTrip.com
Zilo.com

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