HOLLYWOOD REPORTER – Crackle sees video streams rise

Ad support lags despite growth
By Mike Shields, Mediaweek
March 15, 2010

Original scripted online video isn’t dead. In fact, despite a shakeout in the space, producers continue to pump out new episodic projects. But the medium needs to show more signs of life if it hopes to reignite interest among major advertisers, insist digital buyers.

A spark may have come in the past few months in the form of “The Bannen Way,” an original project from Sony Pictures Entertainment’s Crackle. According to video analytics firm Visible Measures, the show’s 16 episodes have been streamed more than 13 million times since late December. More promising is that its audience held up in February.

“We often see new series attract a surge of initial interest only to experience a precipitous decline in month two,” explained Matt Cutler, Visible Measures’ CMO. “That kind of sustaining interest is encouraging. ‘Bannen’ represents a different class of content, a different level of star power than we’ve seen.”

Indeed, the slickly produced “Bannen” looks like something that might appear on Spike or Cinemax. It stars several known actors, including Vanessa Marcil and Robert Forster.

Crackle is moving full speed ahead with developing other new series with familiar faces, including “Backwash,” an off-the-wall buddy comedy coming this summer starring Joshua Malina (“The West Wing”) and comedian Michael Ian Black as losers who inadvertently rob a bank. “Backwash” will be directed by Danny Leiner of “Harold & Kumar” fame.

“We think it’s perfect for this medium,” said Eric Berger, svp, Digital Networks, Sony. “It’s unlike anything anyone’s ever seen before.”

Yet rumors persist that Sony isn’t happy with “Bannen” and that Crackle may pull back on originals. Not so, insisted Berger, though he admits season two has not been greenlighted yet. “It’s a bona fide hit,” he said, comparing it to last year’s Crackle original “Angel of Death,” which generated 5 million views. “And we thought that was a huge success. The audience has recognized high quality and what’s possible on the Web. It’s not just stuff that wasn’t good enough for another medium.”

“Bannen” was sponsored by Sony’s make.believe campaign; Berger said his team is just now talking to advertisers about “Backwash.” But clearly, brands have lost enthusiasm for this once red-hot space, which was hurt recently by a triple whammy of unproven projects, few returning series and the recession. “The online video market went the same way as my stock portfolio,” quipped Larry Tanz, president of digital studio Vuguru.

“I think it’s still a niche audience that’s interested in this sort of thing,” said Dave Martin, svp of media, Ignited. “Even the best Webisodic content seems to suffer compared to TV.”

According to Nielsen Online, Crackle’s audience averages between 1.5 million and 2 million unique users. Even sites with a TV pedigree like the reincarnated TheWB.com struggle to reach 300,000 uniques a month.

Despite “Bannen’s” hefty viewer numbers, buyers don’t always have faith in scripted Web series. “These shows have cloudy distribution, cloudy consumption and cloudy performance metrics,” said Adam Shlachter, senior partner, digital practice lead at Mediaedge:cia. “Even what constitutes a view isn’t settled. It makes it tough to justify to clients.”

Tanz believes a breakout hit would erase a lot of doubts. “The audiences are there,” he said. “The great thing about Hulu is it proved people will watch long-form content. But we definitely have yet to have a breakout hit.”

But Vuguru, which was spun off last year from Michael Eisner’s Tornante Company, is undeterred in that pursuit. It has seven projects in the works this year, including a third season of groundbreaking teen soap “Prom Queen,” as well as “Pretty Tough,” which is based on a teen book, and the drama “The Booth at the End.” Fifteen more shows are planned for next year. “Our production, our stories are better than everything that has come before,” Tanz said. “We’re making a real bet in this space.”

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