To reach an even larger audience, celebrities are producing and starring in original Net programming—and having a profitable good time
Dave Navarro doesn't need the Web to get noticed. The former guitarist for the Red Hot Chili Peppers and Jane's Addiction already has countless fans who refer to him as a deity. Audiences tune in to cable reality shows about his relationships and watch him judge prime-time contests.
So why is Navarro spending time each week filming an original variety show for the Web?
Traditionally, Hollywood has viewed the Internet as a tool to drive television ratings rather than a medium worthy of its own high-end, original content. Television networks such as CBS (CBS), ABC (DIS), and NBC (GE) have largely put their online energies into building Web sites on which to stream reruns and to disseminate promotional clips of their TV shows (see BusinessWeek.com, 10/11/06, "Click Here to Catch Up on CSI"). In fact, many Web video pioneers have also viewed the medium as merely a stepping stone to the bigger TV and movie screens rather than an end unto itself.
But such views of Web video are changing. Celebrities now see the Internet as an opportunity to develop original content, reach new audiences, exercise increased creative control, and—of course—cash in more on their fame.
On May 17, Navarro launched Spread Entertainment, a weekly live variety show on ManiaTV. This month, Yahoo! (YHOO) began showing segments from Spread and other ManiaTV shows on its site.
Navarro says the show lets him do what he wants—without worrying about network censors. He shoots the show from a nightclub, with guests ranging from porn stars to holocaust survivors. "Frankly, I can make 100% of the choices on this and decide who is in, what the subject matter is about, and who I don't want on," says Navarro, who developed the show with longtime friend Todd Newman. "When you are working within a huge corporate structure, things get filtered out to what the consensus thinks is most suitable for a large viewing audience."
Navarro also likes that the Web lets him interact more immediately and directly with fans. He responds to questions via a live chat feature that enables users to instant-message, post comments to Navarro's MySpace page, or call in over eBay's (EBAY) Skype calling service.
Red Carpet Treatment
Other celebrities are getting in on the online action. Some see it as a vehicle to explore ideas that may not be ready, or well-suited, for prime-time TV.
In April, Will Ferrell launched the Web site Funny or Die with movie actor and writer Adam McKay, and TV writer and producer Chris Henchy. Ferrell, who is paid tens of millions for movies such as Anchorman: The Legend of Ron Burgundy, has filmed several Saturday Night Live-type shorts for the site. In one well-known skit, he is harassed by an alcoholic landlord—age 2. Several established comedic talents have posted original videos on the site, including SNL's Jimmy Fallon, Ed Helms of NBC's The Office, and Jenna Elfman of ABC's Dharma & Greg.
Comedian Tom Green has hosted an interactive call-in show on ManiaTV since June, 2006. The show, which airs live from Green's living room every weeknight, features Green interviewing celebrity guests. Green uses his creative carte blanche to dive into offbeat topics, such as discussing how to plan for divorce with comedian Adam Carolla.
In May, Jerry Zucker, the producer and writer of such films as The Naked Gun, launched a comedy site named National Banana with the backing of U.S. Venture Partners. Academy Award winner Cuba Gooding Jr., created a short video for the site spoofing commercials for longer-lasting erectile dysfunction drugs. Other contributors include veterans of Fox's (NWS) MADtv.
Creativity Pays Off
As fun as it may be for celebrities to make quick, inexpensive skits that show off their range of talents, their online ventures are about more than goofing around. There's an opportunity for real cash. Sites such as ManiaTV pay the major celebrities who create content for their site, either directly or through an ad revenue-sharing agreement. And, while sites such as FunnyorDie.com have yet to pull in profits, their quickly growing audiences and celebrity-caliber content are grabbing the attention of advertisers.
"Not only can being online help you get fame, but fame can be translated into actual online revenues," says Josh Bernoff, a senior analyst at Forrester Research (FORR). "You think if Will Ferrell calls up Nike or Coca-Cola, or any of these big consumer brands, that he is going to have any trouble getting them to take his call?"
By 2010, online video advertising is expected to grow into a $3 billion-a-year business, up from roughly $775 million this year, according to research firm eMarketer. That pales in comparison to the $74 billion-plus market for TV commercials, but the Internet gives celebrities a way to access those ad coffers more directly than they can on TV. Advertisers, meanwhile, prefer putting their dollars behind known entities over the "stars" of video sites such as Google's (GOOG) YouTube. There's a greater comfort level appending a video ad to a short created by Cuba Gooding Jr., who has his own reputation to protect, than a relative unknown video creator, says Bernoff.
Celebrities are not the only Hollywood types going more aggressively after online audiences and dollars. Naturally, Web portals are making a push. Yahoo has launched a host of branded channels featuring original online programming created by professionals and semi-professionals. "We think it is important to have produced content," says Mike Folgner, Yahoo's general manager of video.
To stake their claim, traditional TV networks have brought original Web producers on staff to create original online content.
In November, ABC hired celebrity video blogger Amanda Congdon, former host of Rocketboom, as a regular vlogger for its ABC News Now site (see BusinessWeek.com, 11/14/06, "From Rocketboom to ABC"). In May, CBS acquired online finance show Wallstrip as well as online music community Last.fm. "They are going to help us learn to create original content for the Web," says Patrick Keane, CBS' chief marketing officer, of the Wallstrip gang (see BusinessWeek.com, 1/29/07, "Stock Tips for Generation YouTube").
See BusinessWeek's slide show for a look at the celebrities staking their claim online with original programming.