Net Firm Focuses on Blurring the Line

At online entertainment site Heavy.com, sometimes it’s hard to tell where the marketing ends and the programming begins.

And to co-founder Simon Assaad, that’s just the point.

Take, for example, the inaugural episode of a new cartoon series dubbed “Pimp My Weapon.”

Posing as a do-it-yourself TV show on the mythical “How-To Network,” the short video features two computer-generated figures in gladiator garb demonstrating a wicked-looking chain sword. The muscle-bound-but-high-pitched host matter-of-factly discusses such benefits as the “comfy killing distance” and the “handy fire option” as he hacks at his co-host.

There are no banner ads, pop-ups or other pitches in or around the show. Instead, the show itself is an advertisement for Sony Corp.’s gory video game “God of War,” which supplied the characters, the sets, the action -- everything, in fact, but the dialogue.

“Our goal is to be kind of an interface, where we have two groups of customers: consumers and marketers,” said Assaad, the 34-year-old Melbourne, Australia, native who launched Heavy in 1998 with partner David Carson, also 34.

In particular, Heavy has been trying to link marketers with young, single men by offering a mix of original programming, hipster radio and outrageous video clips culled from the Net. The testosterone-fueled formula is familiar, but the results are not.

A horde of entertainment companies set up shop online in the late 1990s, thinking the Internet was a Wild West version of cable TV -- a wide-open pipeline with a huge audience of young men hungry for caustic and profane amusements. So sure the concept would be a hit with advertisers and viewers, the companies and their investors spent millions to create programming from scratch.

Then the dot-com bubble burst. Advertisers cooled to the Net, investors fled and company after company croaked.

New York-based Heavy survived by slashing costs, recycling its programming and finding a new outlet for its creative and promotional juices. Now, advertising is on the rebound -- sales jumped 50% in 2004 from the previous year, Assaad said -- and the audience has grown to about 5 million a month.

Assaad expects privately held Heavy to generate a positive cash flow this year, just as it did in three of the last four years. He declined to specify how much revenue the company pulled in annually, saying only that it was “in the high seven figures.”

“It’s a cycle, just like it is for every other entertainment medium,” he said. “But right now we’re supplying something that there’s a big demand for, and there’s nobody else that’s doing it. And that’s a lot of fun.”

Although “nobody else” is an exaggeration, few of Heavy’s many peers in the field of sophomoric video high jinks made it past the dot-com crash. Meanwhile, a growing number of advertisers are looking for new techniques to deliver messages in ways that are harder to skip or tune out.

“The wall between what is creative programming and what is advertising, it’s not even a Chinese wall anymore,” said Tim Hanlon, senior vice president at advertising agency Publicis Groupe Media in Chicago. “It’s as paper thin as you can get it. The reality is that what ‘advertising’ is is completely up for reinvention, given all that is happening with the way communications is evolving.”

For young males, Hanlon said, “online is their television.” Much to the chagrin of the big media establishment, these viewers are quite comfortable interacting with or creating media, which is “far more expressive and real to them than sitting back, watching what somebody else has thought is good for them to watch.”

Heavy is hardly the only company attuned to this phenomenon, Hanlon said.

“I think you will see literally thousands of original-content portals out there. Not all of them will succeed, but it shows that smaller audiences -- perhaps in the tens of thousands or tens of hundreds -- can be monetizable.”

Assaad was waiting tables at night and producing independent films during the day when he met Carson, a composer and classical pianist with a knack for technology. They formed Heavy in 1998 as a marketing company specializing in online video campaigns. After a year or so, Assaad said, they decided, “We need to build a storytelling enterprise for the Web.”

The pair came up with ideas for 10 programs that they would want to watch, including an unscripted travel show starring a young female photographer who specialized in erotica, a subversive news program, and a collection of “extreme sports shenanigans.” The idea for Heavy.com’s signature effort, however, came while they were watching a profile of the singer Jewel on “Behind the Music,” a biography show on Viacom Inc.’s VH1 network.

The online show mocked the VH1 program and the pop, rock and hip-hop stars it profiled. Heavy persuaded another website to cover the production costs of the series, then licensed it to cable TV operators and other outlets, Assaad said.

When the bottom fell out of online advertising, Heavy briefly tried to sell “premium” subscriptions to its original programs before it all but gave up on creating content. Only a couple of advertisers continued to support the site, so the company recycled and repackaged shows while adding wacky videos glommed from other sites.

Meanwhile, a number of other firms hired Heavy’s marketing arm to bring the website’s flavor to their brands; for example, Assaad said, Cablevision used Heavy to develop programming and promotions for a cable TV network that specialized in music videos.

“The way we were able to survive was by monetizing the essence of Heavy.com through our marketing agency,” Assaad said.

Last year, the partners renewed their focus on the media side of the company, working to boost the website’s audience and ad sales. It also started producing programs again, such as “Pimp My Weapon.” Still, more than half the videos on its site are culled from the Web, typically for free.

Analyst Adi Kishore, who directs the media practice at Yankee Group in Boston, said it was tougher for a website to stand out from the pack without exclusive content. But having original programming may not be as important as finding and catering to the right set of viewers, he said.

“If you’re sort of established within your community, then you’re in pretty good shape,” Kishore said. “You’re the go-to site.”