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From the "Biz" Archives:
by Eugene Hernandez/indieWIRE (indieWIRE/ 9.6.00) -- In a move that was hardly surprising following the collapse of negotiations with IFILM last week, Pop.com confirmed today that it is effectively shutting down. A number of sources closely involved with the site spoke with indieWIRE about the move and the future. Notably, 70 people are now out of work according to one source that was actively involved in the company. The source also indicated that up to 60 films were ready to debut on the site which had been scheduled to launch in about two weeks. Another 45 films were in various stages of production according to the source. "Although the Internet continues to represent an exciting creative opportunity for us, the market has shifted dramatically since our original announcement, resulting in this being a less viable business for us," a Pop.com spokesperson told indieWIRE late yesterday. "We will retain a small staff to support our creative endeavors." The statement continued, "At this time we have not made a decision regarding distribution of original content we produced or acquired." indieWIRE has learned that about 9 employees will remain on staff. While Pop.com is publicly leaving the door open to future endeavors, one source told indieWIRE that the employees would mainly focus on CountingDown.com, a site it acquired earlier this year. CountingDown is the site where Pop.com parent partner Dreamworks posted an extended clip from its summer hit, "Chicken Run." A separate source who was a close associate of Pop.com doubted that the site will amount to anything in the future. In a candid conversation with indieWIRE, the source categorized the move as "a graceful segue out" of the business. Interestingly, Pop.com was only about two weeks from site launch. Mike Kelly of UndergoundFilm.com, another site that Pop.com had reportedly acquired, confirmed that his company was brought in to execute the creation of the never to be seen Pop.com site. Expressing disappointment and a touch of sadness, Kelly told indieWIRE that the deal for Pop.com to acquire his site never closed, so now he will take some time to consider his options. Of course, a key question is why the site's high-profile partners -- Dreamworks' Steven Spielberg, Jeffrey Katzenberg, and David Geffen, Imagine Entertainment's Ron Howard and Brian Grazer, and Microsoft Co-Founder/Dreamworks financier Paul Allen -- decided to pull the plug shortly before launch. Many of those interviewed yesterday by indieWIRE cited ineffective top management, problems clarifying a clear vision for the site and lack of revenue streams that could avoid a very high burn-rate. Ultimately, according to a source, it was Paul Allen -- who recently tried to match Pop.com with IFILM -- that lost faith in the potential for the venture, in part because of the precipitous drops the NASDAQ weathered this Spring. More than one source yesterday indicated that once the NASDAQ fell, faith in the site began to wane. The site that was launched, as what one source called "an investment strategy," at a time when many websites had dreams of going public and cashing in quickly. Allen, who according to media reports when the venture was announced late last October ponied up $50 million for the new venture, didn't quite fund the site so greatly after all, according to another inside source at Pop.com. Instead, Allen had actually only committed $15 million to the project. In a published report in The Wall Street Journal, Katzenberg indicated that Pop.com spent $7 million in less than a year. John Sloss who announced a partnership with Pop.com to create Popfest, a initiative to develop content from independent filmmakers, expressed regret and disappointment over the news in a conversation with indieWIRE yesterday. "I do feel bad because I had great hope for this," commented Sloss. Continuing he added, "I still believe in the Internet as a medium for content and it's no surprise to anyone that it is extremely difficult to monazite that -- the hope was that with that understanding we were going to pioneer with relatively deep pockets and stay in business until the business model made economic sense." While unfamiliar with the details of the deals for the films acquired by Pop.com, Sloss expressed his hope that the filmmakers would ultimately regain the rights to their movies. While some filmmakers actually signed away all rights to their work for up to seven years, receiving stock in the company and the potential to be in business with the likes of Hollywood heavyweight Steven Spielberg, others benefited. One pair of filmmakers who hardly regret going with Pop.com are Taz Goldstein and Robert Moniot. The two made "The Dancing Cow," Pop.com's first company acquisition this spring. While the two expressed genuine sadness over the fact that a number of their friends will now be out of work, they certainly could not complain about the notoriety that came along as a result of the Pop.com deal, even if their movie could not be seen on the Pop site. The filmmakers were actually offered a sizably larger amount of cash by another site when their film debuted at the Aspen Festival this spring, according to a source, but they knew that by making a deal with Spielberg and company they stood to gain the awareness and access in Hollywood that they had been striving for. While the filmmakers are contractually restricted from discussing the terms of their Pop.com deal, reached separately yesterday, Lisa Lindo (owner and head of New Media at Acme Talent & Literary Agency, the company that made the "Dancing Cow" deal with Pop), indicated that in most deals that her firm made with Pop.com they included the option for the rights to revert back to the filmmakers if the site did not launch by this fall. Like the filmmakers who will re-evaluate their plans now that the Pop.com bubble has burst, Mike Kelly of UndergroundFilm was straightforward. "We are looking for a strategic partner and people who can bring money and expertise," Kelly indicated yesterday. "We have learned a lot in working with Pop, we really understand the value of marquee power, we'd like to find partners who can bring that and...we want to really build out the technology to do some exciting community-oriented things." Summarizing the feelings of many, Lindo of Acme expressed faith that the death of Pop does not mark the end of the next-generation entertainment business. Rather she offered, "I basically feel like my best friends have dropped out of school." [Eugene Hernandez]
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