DAILY NEWS UPDATE: AtomFilms and shockwave.com Merger Follow-Up; Anteye.com Closes; and Sundance Announces Online Film Fest Lineup
by Eugene Hernandez/indieWIRE
>> An Emotional Day at AtomFilms as Company Joins shockwave.com; 30% of Staffers Will be Laid Off as Company Heads to San Francisco; CEO Mika Salmi Discusses Deal as Others Weigh In
(indieWIRE/ 12.14.00) -- For the past few weeks, rumors intensified surrounding an apparent AtomFilms deal. The buzz involved a number of different studios and even Atom competitors. Industry insiders agreed that some sort of merger or acquisition had to happen before the end of the year, since the chance of Atom securing venture capital seemed a steep uphill climb in the current marketplace. When word got out last week that Atom was talking with shockwave.com, some insiders shrugged it off, while others saw the possible marriage as a legitimate possibility. An Atom insider confirmed the talks in an email to indieWIRE and the waiting began as other rumors continued to swirl.
AtomFilms Founder and CEO Mike Salmi will pick up and move his family to San Francisco to serve as CEO of the as yet unnamed, merged company (technically an acquisition of AtomFilms by shockwave.com, with a merger of their operations and executives). In a conversation with indieWIRE yesterday (Friday), prior to an appearance on a conference call with shareholders and press, Salmi indicated that this was a deal he has wanted to do for year. "We had a lot of options presented to us," Salmi said, offering that he met with large media companies, portals and the competition. "This was the only one I thought made sense from a merger sense." The name of the merged outfit will be announced once the deal officially closes, but Salmi indicated that neither brand will go away entirely.
The conference call and interview were part of what one exec said was an "emotional day" at AtomFilms. That fact is, this transition will not be easy for AtomFilms and shockwave. Combined, the companies have over 300 employees, but Salmi was clear that the consolidated company will end up with about 200 staffers. Some employees will stay on for the transition, but 100 will ultimately be let go, among them shockwave.com's CEO Lawrence Levy. A number of Atom staffers were let go yesterday (but no one at Atom would specify how many), while others have an option of staying through the transition, and still others will be invited to make the move to California. One insider at Atom speculated that with about 150 people each, AtomFilms and Shockwave are expected to contribute an equal number of employees to the combined company. Rob Burgess, CEO of Macromedia (a majority owner of shockwave.com before the merger), will be the chairman of the combined company, while Atom's Matt Hulett will be President and shockwave.com's Michael Comish will be President, International.
"We new we had to do something," Salmi explained. "Our business was accelerating but the marketplace had a hiccup -- the financing market slowed down, but our business did not." Continuing Salmi said that securing capital was a part of this latest "round," but he added that he also " wanted to find some good close partners -- we needed to align."
All agree that the past few months have been tough within the online entertainment space. "I think [this deal] sends a positive message, companies have to evaluate all of their options and figure out what makes sense," offered Hypnotic.com CEO Jeremy Bernard in a conversation with indieWIRE yesterday.
Sputnik7.com chief David Beal agreed that the current market conditions lend themselves to mergers such as the Atom/shockwave deal. "Right now is an amazing opportunity for companies to come together," Beal told indieWIRE, "Before the bottom dropped out it was impossible because the values were so high." The executive offered that sputnik7.com would make an announcement of its own in the next few days.
Continuing, Beal spoke highly of the merger and added, "I am Hoping that Mika's leadership and AtomFilms will bring shocakwave a more independent voice."
"I think it's great for both companies," IFILM CEO Kevin Wendle commented on the deal in an email message to indieWIRE, "They share similar aspirations and both have great taste in online entertainment product -- Mika is also very well-liked and I'm happy to see that he's running the combined venture."
The importance of remaining "independent," is something Mika Salmi focused on a few times in our conversation on Friday, saying that it drove his ultimate decision to align with shockwave.com rather than a studio or other large media company. "We wanted to remain and independent entity," Salmi said, "We want to work with all of the media companies, this [deal] allows us to kind of look at the world in [an independent] way."
"This is by far the best thing we could do to take it to the next level and be a worldwide presence in this entertainment space," Salmi concluded. [Eugene Hernandez]
>> AntEye.com Shutting Down
(indieWIRE/ 12.14.00) -- As industry insiders buzzed about the energizing merger of AtomFilms and shockwave.com, another site quietly closed down after only 8 months in business. AntEye.com, aimed at creating TV pilots and digital films from content submitted by site visitors, closed its doors yesterday.
While CEO Matti Leshem was heading out of town late yesterday (Friday) and unavailable for comment, a statement from a press rep was emailed to indieWIRE last night. "Although the community of creators was accepting to the innovative concept of AntEye.com, there was not sufficient funding to continue operations," the statement said. "AntEye.com made the decision to officially close its doors, effective Friday, December 15, 2000."
The company announced a $4 million round of financing back in April, shortly after it launched. Embattled MP3.com was on board as an initial investor for what Leshem hoped would become "the Geocities for video." [Eugene Hernandez]
>> Sundance Takes First Step Towards Showcasing Next Generation Entertainment with First Online Film Fest Lineup
(indieWIRE/ 12.15.00) -- How wonderful that indieWIRE's final regular
news story of the year is a dotcom piece that is not about business plans
or company trends. A year that began with high hopes for online entertainment
ends with insiders speculating about the fate of some sites and many wondering
how the business sector will survive.
As we conclude a year of coverage of the dotcom space, we look ahead to the
2001 Sundance Film Festival, where organizers will, for the first time,
showcase online work in a new segment of the Festival. Planners rounded out
their lineup yesterday, announcing the projects selected for the inaugural
Sundance Online Film Festival.
Sundance is taking an aggressive leap into the dotcom space at its 2001 Film
Festival, offering the online section as well as a new Digital Center housed
on Main St. The venue will be the place where in-person attendees can access
the online festival, while others will be able to log on and attend. Online
viewers will be able to vote for the Festival's Online Audience Award, which
will be announced in early March.
The lineup includes 17 projects as well as a special collection of work.
Co-produced by StreamSearch.com (in the news earlier this week after
cutbacks and financial problems), the site will be open for the duration of
the 2001 Sundance Film Festival, kicking off on January 18th at
www.sundance.org or www.sundanceonlinefilmfestival.com.
Festival organizers, who received 315 submissions this year, did not know
what to expect in terms of entries. "We were not sure how much work would
come in," Festival Codirector Geoff Gilmore told indieWIRE recently. He
added that the program is only the beginning, "I can't tell you that I am
overwhelmed with the level of innovation that we have received, but I think
that it is going in the right direction -- it's a first step."
Commenting on the lineup in a prepared statement yesterday, programmers
Shari Frilot and Trevor Groth offered, "With our presentation of the
interactive pieces, we are especially delighted to present work which points to the future possibilities of web entertainment." [Eugene Hernandez]
GET THE COMPLETE LINEUP AT indieWIRE.com: