Intertainer and Artisan Entertainment Enter Into Digital Production and Distribution Pact

BY JON HEALEY
Mercury News Staff Writer
Filmmaker Tim Burton is known for taking audiences to forbidding but strangely beautiful worlds, like the Penguin's icy lair in "Batman Returns.''

Now Burton and a growing number of Tinseltown artists and dealmakers are taking Hollywood onto the wild and fickle Internet -- not just to hype their movies and TV shows, but also to create original programming for the new world online.

San Francisco-based Shockwave.com plans to announce today that Burton will develop a series of short cartoons for the site, starting this spring. The animated stories, which will available free, will give Burton a launching pad for characters that could later appear on the big screen. Also this spring, Robin Williams is set to debut a half-hour comedy show exclusively for Audible.com. And "Seinfeld'' co-creator Larry David is one of several TV and film veterans producing original animation for startup Icebox.com.

Even the studios are getting into the act: Artisan Entertainment, maker of "The Blair Witch Project,'' has struck a five-picture deal with Intertainer, a company that delivers music and video entertainment digitally through high-speed phone or cable connections.

Artist and studios "look at the content that's on the Web today, and they say, `We could do better than that,' '' said Icebox.com chief executive Steve Stanford, a former Hollywood agent. "We don't necessarily get all the tech stuff, but the medium has gotten to the point where it's not about technology....It's about storytelling.'' The money-making allure of a dot-com doesn't hurt. Rob Burgess, chief executive of Macromedia and Shockwave.com, recalls a recent conversation with Brad Grey of Brillstein/Grey, a leading Hollywood management and production company.

"With a big smile on his face, he said, `Rob, you just can't imagine the rage down here in Hollywood,' '' Burgess said. " `We're the ones who are used to being the ridiculously overpaid guys. Now you guys are. And everybody's upset about it.' ''

The Internet also offers artists dramatically lower production costs, a direct connection to the audience and a bigger cut of the profits -- a truly magical combination. With upwards of $50 billion worth of music and video entertainment that could be transported over the Internet, there's plenty of motive to make it work.

Of course, there's no proof yet that entertainment on the Internet can draw the kind of audience and dollars that TV and movies do. Nor do many American homes have the high-speed Internet link needed to deliver the video quality that people expect from Hollywood.

In addition, not everyone in Hollywood is convinced that the Internet is a good place for entertainment, particularly not the 90-plus minutes of a feature film. Even companies that like the idea of distributing films over the Internet see it as a stepchild to theaters and VCRs.

For example, Artisan's deal with Intertainer gives Artisan the right to release their jointly produced films in theaters and video stores before Intertainer can distribute it electronically over a digital network. It exerts this control even though Intertainer is putting up most of the money to make the films, whose average budget is around $500,000. "Artisan still believes in the theatrical release,'' said Amir Malin, the company's president. That's because most filmgoers prefer the big-screen experience.

Given the state of most people's Internet connections today, that's understandable. It takes a lot of data to transmit a moving image, and the typical dial-up modem can handle only a fraction of it. Even the new high-speed Internet connections from phone and cable TV companies may not have the capacity needed for full-screen, cinema-quality videos. On the other hand, the potential audience for Internet-based entertainment has skyrocketed over the past few years, with more than 50 percent of homes now boasting a computer with an Internet account. Meanwhile, as high-speed connections gradually spread to more homes, advances in digital technology are steadily improving the quality of Internet video transmissions. Moreover, the path from artist to audience is direct on the Internet. The music industry is already feeling the impact, as Internet technologies like MP3 let consumers download songs directly from artists.

Richard Baskin, chairman and co-chief executive of Intertainer, said the company's founders left the Hollywood studio scene four years ago "when we realized that the entire industry would change because all of the mechanisms of distribution were changing and breaking down.'' Not only is it far less expensive to shoot a movie in digital, he said, but filmmakers also save a tremendous amount by cutting out the studio middleman and distributing their work electronically.

The sticking point for Intertainer, like other new-media video services, is that live-action movies need a high-capacity pipeline into homes. High-quality animation, on the other hand, can be done today over a dial-up Internet connection, which is one reason why artists like Burton and "South Park'' creators Trey Parker and Matt Stone have inked deals with Shockwave.com.

Burton will oversee a regular series of two- to five-minute cartoons based on "Stain Boy,'' one of the misbegotten kids who populate his book of illustrated poems, "The Melancholy Death of Oyster Boy & Other Stories.'' "The great thing about this medium is the speed by which you can go from idea to implementation,'' said Mike Simpson, a top motion-picture executive at the William Morris Agency, which brought Burton to Shockwave.com. Unlike TV, where episodes are filmed weeks in advance, the Internet lets Burton respond quickly as the audience reacts to each new cartoon. In addition, said Simpson, "we create an audience of people wanting to watch Stain Boy in the short format, and then we move Stain Boy to...television in a 30-minute show.''

The best thing -- at least for Burton and his William Morris agents -- is that Burton will control the rights to Stain Boy and all the dolls, greeting cards and games that are spun off from it, said Lewis Henderson, vice president for new media at the agency. Unlike the Hollywood studios, which generally hold 100 percent of the rights to film and TV characters, Shockwave.com will merely get a share of the revenue from Stain Boy's exploits.

Oh, and yes, Burton is getting an undisclosed amount of Shockwave.com equity. The director couldn't be reached for comment Thursday. Like Shockwave.com, Icebox's focus is in animation, where winning ideas frequently move from short cartoons to half-hour TV shows to feature-length films. The Internet is "really an incubator for things that can go on to traditional film and television, at economics that are substantially better,'' Stanford said.

Stanford started a new media department at the International Creative Management talent agency back in 1993, when the hot ideas in entertainment were interactive TV and CD-ROMs. After an initial swell of enthusiasm, however, Hollywood lost interest -- in part, Stanford said, because "they didn't see anybody get rich in the CD-ROM business.'' That was before the Web was born, turning the Internet from a computer programmer's playground into a mass-market phenomenon. Hollywood's interest in the Web has been building ever since, although the real momentum is just starting to gather. Some of the pioneering efforts at original programming on the Web include Digital Entertainment Network, which devised TV-style series for the Web, and Atom Films, which provided an outlet for short films that had trouble finding an audience. Now, Stanford said, "it's amazing the number of people in Hollywood who are doing Internet things.....There are probably more that haven't been announced than there have been.'' And to think, Baskin said, only four years ago his friends in Hollywood were saying, "Oh those idiots, they quit the film business. What could they possibly have been thinking?''

Contact Jon Healey at jhealey@sjmercury.com or at (323) 782-0173.