After early zeal, TV networks pull back Web productions

NEW YORK -- Around 2007, TV networks made a land rush to the Web, looking to lay down digital production studios. Four years later, many of those networks have pulled up stakes, shunning original Web content and reorienting their online outlook.

The Walt Disney Co. and ABC launched their digital media destination, Stage 9, only to fold it by 2009. Time Warner's comedy-focused site Super Deluxe also launched in 2007 and closed the next year. (CBS and Fox have showed only sporadic interest in original Internet TV.)

Now, Comcast Corp. has announced that the NBC Universal Digital Studio, launched in 2008, is shuttering. A relatively robust digital outfit, its series often paired sponsors with a show, such as the Hollywood drama "Dial Star" (AT&T), the comedy "Fact Checkers Unit" (Samsung) and the comedy "In Gayle We Trust" (American Family Insurance). Comcast, a cable operator and NBC's parent, has some interest in maintaining the primacy of TV.

But why are so many TV networks fleeing a business for which they would seem perfectly suited? The exodus comes at a time when many see brightening skies for original content on the Web. Though it took some time for the numbers to measure up to the early promise of Web video, profits and audiences are on the uptick.

"I would think they should be doubling down right now on creating original content for the Web," said Marc Hustvedt, editor-in-chief of Tubefilter News and founder of the International Academy of Web Television. "The ad dollars are moving towards it. There's this whole group, a new core of digital studios that are really booming in terms of audience."

NBC said the move was "simply about a change in strategy."

"Going forward we plan to focus our digital efforts and investment on content that's supportive of our on-air programs, providing our audience with additional content that further engages them in our shows," the network said in a statement.

That means more content such as the webisodes that accompany "The Office" -- things that feed viewers back to broadcast shows. And those shows, after all, are often already available digitally, whether on NBC.com, Hulu or Netflix.

But at the same time some networks are backing out, many online destinations are increasing their investment in original Web programming. YouTube has inspired its partners in the art of video production. Funny Or Die, founded by Adam McKay and Will Ferrell, just produced one of its most ambitious videos yet, an imagined sequel to "Field of Dreams." In March, the digital arm of the Lionsgate Television launched its first original Web series on Hulu: the animated "Trailer Trash." Last year, the production company Berman Braun Productions, which makes numerous series for MSN, signed a $100 million deal with Starcom MediaVest Group, which represents companies such as Wal-Mart and Coca-Cola.

Sometimes, startups have shown more patience than the networks. Revision3, an online network founded in 2005, didn't reach profitability until late 2010, when it saw total views across the network increase by 165 percent.

Blip.tv, created in 2005, has steadily grown and says that it has now has reached more than 3 billion views to date. Steve Woolf, vice president of content for blip.tv, believes TV networks have failed to embrace the interactivity of the medium, and have instead pushed simply a less expensive TV product.

"That is clearly the problem," says Woolf. "They are trying to fit a square peg into a round hole."

"Creators have full control over how they create their shows," Woolf says of blip.tv, which gathers series from across the Web. "There's no studio level, there's no layer of production executive that they have to get answers and OKs from. They make their stuff, they know their audiences and it's a direction connection to the audience. I think a lot of these guys have shied away from that to their determent."

Hustvedt agrees: "The Web original studios are a little more fearless, a little more reckless and that seems to be paying off for them. These sorts of very manufactured enterprises within the studios, no one's really taken a big, big chance. The ones that do work fundamentally understand social video."

Not all networks have abandoned Web originals. Fox's first foray, the digital outpost 15 Gigs, ceased within months of debuting in 2009. But the same year, it created the Fox Digital Studios.

Though it has yet to produce any major Web original, Fox Digital currently has several original Web projects in development, said a network official who spoke on condition of anonymity because plans have not yet been announced. One is called "The Ropes" and is being written and produced by Vin Diesel. The 18 seven-minute episodes will be based on Diesel's pre-Hollywood days working as a bouncer.

CBS's original online series included an early hit, 2007's "Clark and Michael" with Michael Cera, but its output has slowed and remains undefined. In March, it shifted direction, acquiring the highly respected Internet TV guide Clicker and making its co-founder, Jim Lanzone, president of CBS Interactive.

Warner Bros. made the interesting move of restoring its defunct network, the WB, as a purely online network in 2008. It can boast the hit medical drama parody, Rob Corddry's "Childrens Hospital," which was eventually picked up for broadcast by Adult Swim. But TheWB.com still mostly relies on old Warner Bros. Television productions such as "Friends" and "Veronica Mars."

Sony Pictures Entertainment, though, has held fast. Sony created Crackle in 2007 and continued to produce high-quality online shows, while surrounding them with programming from Sony Pictures' broadcast library. Last year, the Crackle crime drama "The Bannen Way" drew millions of viewers. It also released the frenetic comedy "Backwash," starring Michael Ian Black, Joshua Malina and Michael Panes.

With Crackle, Sony has focused its strategy on optimizing numerous "windows" of distribution, releasing popular shows after their initial ad-supported runs on iTunes, DVD on TV networks and in international syndication.

"The result of all of this has made us very successful," says Eric Berger, executive vice president of digital networks at Sony Pictures and head of Crackle. "We're going to continue to create originals."

Berger says Crackle is finding increased appetite for long-form content, which breeds higher quality shows. Their projects currently in development are being prepped to run in 30-minute, TV-length episodes. They include a paranormal anthology series from "Sons of Anarchy" producer Chris Collins, the undercover cop series "Strand Street" from "Heroes" star Milo Ventimiglia, and "Monster Heist," a show about inhuman thieves from Kim Moses and Ian Sander of "The Ghost Whisperer."

TV networks may be moving on from Internet television, but maybe soon, there won't be much separating the two.

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Online:

http://www.crackle.com/

http://blip.tv/

http://www.cbs.com/originals/

http://revision3.com/