Los Angeles Business Journal: Ubiquity Packages the Players Who Produce Internet Content

Ubiquity Packages the Players Who Produce Internet Content
By JOEL RUSSELL – 6/4/2007
Los Angeles Business Journal Staff

Ubiquity Partners in Westwood calls itself a “digital packager,” a reference to the Hollywood agencies that put together a group of writers, actors and producers to create a film or TV show.

In the digital economy, Ubiquity seeks to perform a similar function by hooking up entertainers, financiers, Web site operators and advertisers to produce serial online content.

The first two deals since Ubiquity opened its doors at the end of 2006 illustrate its business model. In the first deal, TV creator Steven Bochco Productions teamed with video-sharing site Metacafe to present “Café Confidential,” a series of amateur confessional shorts. In the second, Twisted Pictures, the company behind the “Saw” horror movie trilogy, will produce a feature film called “The Internet Killer” shown in five-minute segments on the site Break.com.

“We are targeting audiences with traditional entertainment names,” said Eric Carlson, a founding partner of Ubiquity who formerly worked as a packager at Creative Artists Agency.

Matthew Papish, the other founder, added that unlike a traditional Hollywood agency, Ubiquity doesn’t have to limit itself to a client list. “We’ll take any entertainment brand that makes sense,” he said.

However, just like regular Hollywood reps, Ubiquity has several angles to derive its share of the revenues. Advertisers such as American Apparel, the main sponsor of Café Confidential, come to the deal through Ubiquity, so the packager takes a slice of the ad money. Ubiquity also tries to get an ownership stake in the entertainment property or even the Web site itself.

“As a company, we make money at every touch point,” said Carlson. “We always negotiate for equity. Also, we are very close to the financial community, especially venture capital, so some of our (deal) relationships spawn from that relationship. In some cases, we finance these properties as well.”

In the Twisted-Break.com arrangement, Ubiquity has brought in two major advertisers, an energy drink and a game publisher. It owns a piece of the film “Internet Killer,” which it plans to sell for DVD, overseas and other ancillary markets. And it will co-own a future Web site with Twisted that it hopes will become the go-to spot for fans of horror, science fiction, and suspense films.

But as a new medium, Internet programming can’t match the pay scale of old Hollywood. Both Bochco and Twisted work in a universe of multimillion dollar commitments for TV pilots and film budgets. Now they face the prospect of putting their work and name on content for a slice of a relatively small revenue stream.

Similar strategies

“It’s nickels and dimes compared to what they’ve made in the past,” said Carlson. “They know that. But the market is evolving and they don’t want to be left behind.”

While Ubiquity has only a few direct competitors, some entertainment conglomerates pursue similar strategies internally, according to Barbara Bickham, chief executive officer at TechGenii, a Los Angeles consulting firm that develops Internet plans for media clients. As for the packaging model, Bickham believes a larger need exists for connecting content owners to Web distributors, rather than representing talent.

In the current market, Internet content “becomes part of a bigger package. You can package the content for TV, DVD and online. All of a sudden, you’re repackaging it for four or five media,” said Bickham. “So it comes down to looking at the content as the package, not the talent. That’s why these Internet series are so successful. At least for now, you don’t have to have high-priced talent attached.”

As for the charge that packagers simply mediate transactions without adding value, Bickham said firms like hers and Ubiquity perform a necessary service. “We help them determine what they should be doing with their content properties, help them create a business model around it, help get distribution, and help them understand how to create buzz,” she said.

Papish, the former head of branded entertainment at Time Warner’s America Online unit, said his firm serves advertisers by easing their anxiety as they experiment with online marketing. “A lot of advertisers are moving dollars online, and a lot want to play with content,” he said. “We are dealing with professional video producers and that brings a certain comfort level for them.”

For site owners, Ubiquity helps differentiate them from an increasingly crowded universe of similar sites. Right now Ubiquity actively fields calls from Silicon Valley venture capitalists who want to goose traffic for their startup sites with a show biz connection. “These guys know they’re not YouTube,” Papish said. “We focus on these entertainment brands because the recognition and marketing firepower that they bring to the game immediately moves the needle.”

Carlson said the VCs offer to pay for more traffic with a combination of cash and equity in their fledgling Internet properties.

Acting as a packager/consultant represents half of Ubiquity’s long-term strategy. The other half involves taking equity stakes in Web sites and then building them out with established entertainment names to fuel growth.

The company plans to create five to seven destination sites per year. While Carlson declined to mention names, he said the company has upcoming projects for a comedy site, a music site and a celebrity lifestyle site. Each one will have its own chief executive, sales team and corporate structure. In this half of its business, Ubiquity will act much like a private equity investment firm by finding capital and leveraging its show biz connections to drive traffic.


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