Animation Site Icebox to Close at Week’s End

Add Icebox.com to the growing list of online entertainment companies on ice.

Unable to raise enough money to keep afloat, Icebox chief executive and co-founder Steve Stanford said the Santa Monica company will close its doors Friday and lay off its remaining 27 employees.

Icebox had been in business 14 months, developing a sizable following among college students for its online animated shorts. In that time, the company burned through about $15 million of investors’ money.

Stanford hopes to sell Icebox’s library of animations to a single buyer. “If we can’t keep it all intact, we have a lot of offers for the library or specific properties,” he said.

But with the number of entertainment- site failures growing, investors have their doubts about whether a business built around online films and cartoons can turn a profit. “I think there’s a real fear of content-based business models on the Web,” Stanford said.

Icebox’s Web site featured cartoons developed by a number of veteran TV writers and producers, who viewed the Internet as a proving ground for their programming ideas. The roster included several veterans of “The Simpsons,” including Mike Reiss, Matt Selman and Rob LaZebnik, as well as Rob Greenberg of “Frasier” and Bill Corbett of “Mystery Science Theater 3000.”

In November, Fox Broadcasting commissioned a script for a sitcom pilot based on Icebox’s animated show “Zombie College.” The tale of a college freshman on a campus infiltrated by flesh-eating monsters, “Zombie College” ranked as one of the most popular of Icebox’s 25 shows, attracting more than 4 million viewings.

Icebox’s initial backing came from ECompanies, the Santa Monica incubator founded by Jake Winebaum and Sky Dayton.

At least 10 other well-hyped Web entertainment companies have bitten the dust since April, when the value of tech stocks began to plunge and investors focused on profitability. Their ranks range from music-oriented companies such as Riffage.com and AtomicPop to animation and video ventures such as Pseudo Programs, Digital Entertainment Network and Pop.com, started by Steven Spielberg and Ron Howard.

In addition, the newly merged AOL Time Warner shuttered Entertaindom, moving its original entertainment to WarnerBros.com and laying off 100 employees.

Icebox was different in a couple of important respects from the other failed companies, even though it met the same fate.

First, its goal was to develop shows that could make the leap to television and other venues more lucrative than the Internet. Icebox sold an idea to the Showtime cable TV network as well as Fox, although the deals had yet to yield a finished TV pilot.

Second, Icebox attracted dozens of TV industry veterans to create programs for its site. Stanford said the company had deals with 111 creators, who produced about 185 short episodes of 25 animated series.

The company started running into financial trouble last year, which led it to lay off much of its staff and cut back on new episodes. But the reduction in cartoons led to a drop-off in visitors, making the site less attractive to advertisers.

Icebox’s fate was sealed late last week, Stanford said, when the company was going to raise only $4 million of the $10 million it needed. “We could have raised a small round [of financing], but didn’t think it was appropriate to run the company for three or four more months and have to be back out raising even more money,” he said.

The company had already laid off more than 60 other workers in two previous rounds of cutbacks.

Stanford said he still believes that online entertainment businesses can succeed. The problem for Icebox, he said, is that it didn’t have enough time to build an audience and sell programs.

“Given another year, year and a half, Icebox would have been a profitable business,” he said. “We believe the business is there.”

The most popular feature on Icebox’s site, “Mr. Wong,” is also the most controversial, Stanford said, so it’s proving to be a tough sell.

“Mr. Wong” epitomizes the freewheeling nature of entertainment on Icebox and the Web. The episodes, which focus on the misadventures of a foul-mouthed butler, are rife with expletives, sexual content and material that pushes the boundaries of taste.