DreamWorks, Imagine in Venture to Showcase Online Programming

DreamWorks SKG and Imagine Entertainment, two of Hollywood’s top movie companies, unveiled plans Monday to launch a new firm that will produce and broadcast content created exclusively for the Internet.

The new company represents a significant leap by some of mainstream Hollywood’s heavyweights, including directors Steven Spielberg and Ron Howard, into a medium that some believe is poised to upend traditional filmmaking.

Bankrolled by Microsoft Corp. co-founder Paul Allen, the new company centers on a Web site, https://www.pop.com, that will be an outlet for short films, animated works, live events and other content tailored to the Internet.

Company officials said they hope to take the firm public with a stock offering within a year. Allen, who has agreed to contribute $50 million to the venture, will own 50% of the company. The remaining half will be divided equally between DreamWorks and Imagine.

Brian Grazer, a partner at Imagine, said the company will depend largely on advertising revenue and aims to hire a chief executive within a few weeks. He also said the site plans to amass at least 750 short films and features--paying contributors about $1,000 apiece--before launching next spring.

Dozens of other companies are already airing similar online programming, but few consumers have so far been willing to endure the slow streaming speeds, inferior sound and poor image quality that often accompany Internet video.

Those drawbacks are expected to dwindle as more consumers get high-speed Internet access. DreamWorks and Imagine officials acknowledged the financial prospects are uncertain but said the business was largely launched out of creative curiosity.

“It could be a great business or not,” said Howard, director of such films as “Apollo 13” and a partner in Imagine Entertainment. “But we are mainstream storytellers fascinated by the possibilities of this new medium.”

Asked whether he and Spielberg plan any contributions, Howard said, “We wouldn’t be involved if we weren’t interested in that.”

The mix of content on Pop.com will range from short films to online game shows. The programming will range in length from 30 seconds to six minutes and will be surrounded by interactive features including chat and instant messaging, executives said.

But the company also plans to solicit submissions from the legions of amateur filmmakers who have already turned to the Net to find audiences for their low-budget works. The creators of the most popular submissions will be rewarded with development contracts at DreamWorks and Imagine, executives said.

Analysts said the creation of the new company reflects the pressure traditional Hollywood studios feel to stake out a position in a corner of the entertainment industry that could flourish during the next decade.

“It’s sort of like the early days of television,” said Jeremy Schwartz, a senior analyst at Forrester Research in Cambridge, Mass. “Everybody’s trying to figure out how to be there.”

Forrester estimates that the number of households with high-speed Internet access will grow from 1 million currently to 27 million by 2003. And filmmaking is in the midst of what many consider a technological renaissance.

Just as personal computers ushered in an era of desktop publishing more than a decade ago, digital cameras and other new technologies are bringing quality filmmaking tools to the masses.

Numerous companies, from Web start-ups to Hollywood giants, are racing to tap this budding film market.

Time Warner recently announced that it plans to launch a site by the end of the year called Entertaindom.com, an entertainment hub that will combine news, virtual ticket booths and original content.

But some of the most aggressive companies in Internet video are start-ups such as IFilm Network, a San Francisco company that has already amassed more than 1,000 short films that users can view on its Web site, https://www.ifilm.com.

“We’re going to see a bunch of new networks evolve on this medium,” said Rodger Raderman, chief executive of IFilm.

DreamWorks is a fledgling movie studio launched five years ago by Spielberg, Jeffrey Katzenberg and David Geffen. Imagine is one of Hollywood’s leading production companies, responsible for such films as “Apollo 13” and “The Nutty Professor.”