Once upon a time, there was only one way for children to dive into worlds of wonder, magic, and fantasy, and that was to read books. The beloved tales of The Lord of the Rings, The Chronicles of Narnia, and The Golden Compass brought hobbits, witches, and dæmons off the page and into millions of children’s imaginations. These popular childhood adventure novels, once intended to be pure literary works, now exist as major multi-platform franchises, spanning films, videogames, web pages, social networks, fan fiction, mobile content, and merchandise.

In the digital age, our youth has come to expect these kinds of multimedia dimensions out of their favorite books, especially on the Internet, and publishing companies have noticed. On September 9^th, Scholastic Media will release The Maze of Bones, the first installment of the highly anticipated “The 39 Clues.”

The series is Scholastic’s follow up to   the mega hit Harry Potter. Except, unlike  Harry Potter, which evolved into a transmedia powerhouse after the books’ rising popularity, The 39 Clues will be a massive multiplatform adventure right from the get-go.  In fact, on Scholastic’s homepage a message appears next to The Maze of Bones: “WARNING: This book could take  over your life!”

Aimed at kids ages 8-12, The 39 Clues will be a 10 book series with a single story arc. It will be released over two years with each book written by a different best selling author. The franchise will be about uncovering the secrets of the most powerful family in the world, the Cahills, of which Benjamin Franklin, Mozart, Napoleon and Houdini are relatives. It all begins when the Cahill clan matriarch, Grace, changes her will five minutes before she dies, giving her descendants the choice between $1 million or a clue. Amy, 14, and Dan, 11, the series protagonists, are two young Cahills who must compete with other branches of the family to uncover the 39 clues and discover the family’s ultimate power.

Here’s an excerpt from Rick Riordan’s The Maze of Bones (you can read the first two chapters online here):

“The children are old enough.  They are our only chance,” Grace said to William, her attorney and closest friend for half her life.  “If they don’t succeed, 500 years of work will have been for nothing.”  And with that final statement, Grace Cahill closed her eyes for the last time.

 On Sept 9, when 500,000 prints of The Maze of Bones hit bookstores simultaneously in the U.S., U.K., Australia, New Zealand and Canada, the official online interactive game will launch as well. This multimillion dollar marketing campaign features a contest where kids will follow the clues and hunt for answers. Scholastic promises more than $100,000 in prizes during the duration of the series. And participants who find all 39 clues and uncover the Cahill treasure will compete for the $10,000 grand prize.

To assist kids on this epic scavenger hunt, Scholastic will offer hundreds of collectible game cards as well as websites containing thousands of pages of background information, blogs written by characters in the story, online games, maps, treasure hunts, and numerous geographical and historical videos.  Needless to say, this will be a much different childhood story than Nancy Drew.

Remember when it took decades for the most popular childhood adventure stories to successfully hit the big screen? (Lord of the Rings, Chronicles of Narnia) Over the last decade, technological advances have made it possible to bring classic children’s novels to life with stunning visuals. Now children’s series become film adaptations before anyone has time to finish reading the books.  Sure enough, before The 39 Clues could hit bookstores, Dreamworks acquired the film rights, signing Jeff Nathanson (The Terminal, Catch Me If You Can, Indiana Jones 4) to write the first installment and possibly Steven Spielberg to direct it.

Spielberg told Variety in a statement that The 39 Clues takes “creative leaps to expand the story experience from the pages of the books to multiple stages of discovery and imagination.”

It seems as if the future of children’s publishing is headed towards multiplatform experiences.  And Scholastic isn’t the only company hoping to cash in on the trend. Fourth Story Media has teamed up with HarperCollins to launch the The Amanda Project, an interactive mystery series targeted at girls ages 12 to 14 that is told across books, web sites, social networks, and blogs.  CSI creator Anthony Zuiker has signed a deal with Dutton, a division of Penguin Group (USA), to write “digital novels” in addition to an interactive Web site. And Simon & Schuster will release “Spaceheadz,” a series of books coauthored by Jon Scieszka and Francesco Sedita which also relies heavily on Internet sites.

Sciezka, the National Ambassador of Young People’s Literature, told CNN in this article:

“In the past we’ve made the mistake of demonizing other media, saying all TV is bad, all computers are bad, and all books are good. Kids know that it’s not true; there is great television and there are great games. I just also want to make sure that we don’t forget what’s unique about a book, losing yourself in an extended narrative.”

The question is, does transmedia storytelling encourage children to read books? Rick Riordan thinks so. He’s crafted the narrative in The Maze of Bones to stand on its own while also recognizing that the complimentary game helps to expand the expierence. As a result, Riordan hopes to attract both readers and gamers. As he points out in this New York Times article:

There’s a lot of commonality between what makes a good game and a good book. Whether you’re a gamer or a reader, you want to feel immersed in the story and invested in the action and the characters, and you want to care about the outcome and you want to participate in solving the mystery.

Some kids are always going to prefer games over books. But if you can even reach a few of those kids and give them an experience with a novel that makes them think, ‘Hey, reading can be another way to have an adventure,’ then that’s great. Then I’ve done my job.

Riordan’s comments highlight a fundamental change in the way children engage with fictional universes. Increasingly, children immerse themselves in literary stories not only by mentally constructing how characters and events might look but now also by interacting and participating with them. At times, they are hunters and gatherers in an effort to expand their understanding of the world, other times they are directly contributing to it.  Children have taken a much more involved, community driven role, thanks to the Internet. Without a doubt, transmedia storytelling is revolutionizing children’s imaginations, redefining how they access storyworlds and how they interact with them.

Yet the Huffington Post asks an important question, “can a phenomenon be conceived by a publisher rather than created by the public?” Manufacturing a Harry Potter-type blockbuster is an enormous risk. Although, one could argue that  the 39 Clues is more like a kid’s ARG than a literary series. Each book will come with six collectors’ cards that can be used to find further clues in the online game. Now we don’t know how prominent a role the contest will play in the franchise, but clearly Scholastic assumes their multiplatform approach will be a mega-hit. And if it is, how much of that success will have to do with the gaming and prize components? I mean, even The Maze of Bones’ cover instructs us to “Read the book. Play the game. Win the prizes.” That should almost be followed by “See the movie. Buy the merchandise. Make us rich.”

Is that what it takes to get kids to read? Do children really need a more involved, active experience in their literature, or is that just something publishing houses say in order to make the big bucks?  How has multiplatform entertainment changed the role of the novel? Does it make kids more eager to participate in someone else’s storyworld (the publisher’s) rather than creating their own?

There are many more questions than answers when it comes to The 39 Clues. But I am excited to see how the franchise develops. I will be following the clues, not just in the context of the story, but also in observing how transmedia storytelling affects the children story experience. This could very well be the next Harry Potter, but whether that is decided by the publishers or the fans remains to be seen.

Note:

Just to be clear, Rick Riordan has clarified this on his blog, The 39 Clues has no magical or fantastical elements. It is a realistic adventure, though it holds plenty of mystery and wonder.

Here’s Riordan explaining the series:

The New York Times has taken an interest in web shows the last few days.

In “Television Keeps a Hand in the Online Game with Serialized Shows,” Mike Hale reviews a number of web series, including Gemini Division and Stephen King’s N.

And in the article “For Web TV, a Handful of Hits but no Formula for Success,” Brian Stelter highlights the challenges for web series while also noting their potential.

These articles come a week after Viriginia Heffernan’s piece in The New York Times Magazine entitled, “Serial Killers,” was blasted by commenters, as well as Tilzy.Tv and NewTeeVee.

For anyone who finds an interesting article on web shows, specifically serials, please do share them.

Last Friday, I was lucky enough to be invited to the Gemini Division preview screening and phone conference with executive producer and creator Brent Friedman. After watching the first two episodes (which are now posted on the website), I got a chance to ask Brent some questions about the show’s narrative structure and aesthetic value. More on that later.

Set five minutes into the future, Gemini Division is the story of Anna Diaz (Rosario Dawson), an NYPD undercover cop, who investigates a global conspiracy involving “simulated soldiers.”(kind of like replicants) These SIMs were created to fight in the Iraq war but then mysteriously went AWOL. The Gemini Division is an agency formed to hunt the renegade soldiers and destroy them…before it’s too late. Meanwhile Anna, after discovering her fiancé was not human, becomes caught in the middle of the war.

It is too soon to tell whether Gemini Division will actually be any good. The first two episodes had their highs – seamless product integration, stylized CGI effects, and of course the stunning Rosario Dawson – but also their lows – the cliché creepy-stalking-stranger and some objectionable acting from Justin Hartley. Gemini Division has been labeled the ultimate test of web video because it boasts all the ingredients for success – big time celebrities, high profile advertisers, and a major studio distributor. As NewTeeVee writes, “if a web show like Gemini Division fails, why bother investing in online video at all?”

Yet whether Gemini makes or breaks web video history will not come down to any of aforementioned ingredients, but something far more essential to the final product – the story. Without a compelling story, there is no breakout hit. And Brent is very conscientious of that.

In my next post, I’d like to focus on the Gemini Division’s narrative construction (it may be too early to do so, but I will update as the season moves forwards). Because web video is very much in experimental form, there is no precedent to follow. As a result, the show is a blend of old media and new media, a mixture of narrative ingredients already proven to be effective and new Internet-based elements yet to be mastered. Gemini Division can thus be seen as an amalgamation of narrative devices from a variety of media, including comics, video games, novels, and TV Shows, all of which allow the show to potentially branch out into any of those platforms. For Gemini Division, the web series could be the perfect incubator for a transmedia franchise. But like I say, it all comes down to story.

I’m going on vacation tomorrow so I won’t be able to return to this post for a little while. (Consider this the teaser trailer) Until then, if you want more info on Gemini Division, head over to Prime Time For Change, where Tim provides a nice summary of what went on in the Q&A with Brent.

On a completely different topic, I plan on blogging about this article from the Boston Globe, which I found quite interesting. Bye for now!

Soon after blogging about Hollyood’s potential to have a strong, profitable relationship with web video, I came across Beet TV, a video blog by Andy Plesser. Plesser posts interviews with media executives and clips from various conferences, focusing on the “rapid emergence of online video and its impact on industry and society.” As I browsed through the site, I found many videos which related to my previous arguments.

In the post “Creative Producers will Grab Advertisers with Original Sponsored Videos“, Saul Berman, strategy partner of IBM, discusses a few of the issues surrounding web video monetization. At one point he mentions IBM’s global CEO study, which found that outperforming CEOs have a knack for “disrupting the market before someone else disrupts it for them.” Now, a growing trend in the digital age is that consumers are expecting higher quality content on the web, in terms of production value and level of engagement. That is exactly why I argue Hollywood needs to be more aggressive in the web video marketplace. While the studios have begun experimenting with digital media creatively and economically, in general, they have yet to effectively distinguish their content as superior online entertainment. Here’s the interview:

Berman also talks about a product placement business model, which has become increasingly viable. I’m going to take a look at this in more detail as Gemini Division unfolds, but it seems like a popular approach for producers, advertisers, and consumers, as long as the brand is subtly integrated within the story as a realistic element, not a distraction. Jigar Thakarar of CBS Interactive sees this brand integration as a much more profitable business strategy than offering pre and post roll ads. Here’s his interview from “CBS Sees Sponsored Web Video Programming as Viable Model“:

Because viral videos don’t carry advertisements as they travel through YouTube and other video hosting sites, I can see why product integration would be a practical solution. But it will be interesting to monitor exactly how producers handle a brand’s identity within the context of a story. Will the narrative, mise en scene, and characters always be faithful to the integrity of the show, or will they be heavily adjusted and obscured to land sponsorship? Ultimately, it comes down to finding a balance, but I still wonder if both parties will always be open enough to compromise.

As far as the consumers go, on the one hand nobody wants to feel as though a studio’s production is an excuse to advertise. That perception ruins all credibility. But on the other hand, young adults (ages 18-34) have become trained to avoid and ignore brand messages. So often the best way to reach them is through highly innovative, seamless product placements, allowing a brand to be more easily absorbed. It’s just another example of convergence – branded content and unbranded content merging together. And hopefully, when done correctly, everyone involved will win.

Another interview comes from the Dmitry Shapiro, co-founder of the Internet TV site, veoh.com. Shapiro argues that the future of television is in fact Internet TV. Using veoh as a “virtual digital video recorder,” viewers can consume Internet TV as they do broadcast TV, sitting back on the couch eating potato chips. Take a look:

Shapiro contends that users can get the same experience from Internet TV as they do with broadcast TV. However, unlike TV programs, web shows typically do not enable viewers to sit back, relax, and watch. They are designed to be seen on the fly, as a daily installment. But what if they were both? If there is one complaint I had with Afterworld, it’s that I was not able to plow through the episodes quickly and easily, since every 3 minutes I had to select the next video. Given the show’s twists and turns, I wanted the option of getting comfortable and sinking into the story. It may sound ridiculously lazy, but returning to my computer so often detracted from my suspension of disbelief and the overall immersive experience. (Not to mention the annoyance of hearing, “My name is Russel Shoemaker, I sold technology to the world..” for 130 episodes.)

Web shows do need to be short in length, no doubt about that. For many people, after about four minutes, streaming quality diminishes and their attention dwindles. But I’m a viewer who wants to watch the story as a “couch potato.” That’s why I think it’d be useful to fuse 10 episodes or so together in a half an hour format so that I can have more options: watch it on the go or on the couch. In this way, web shows could function as a medium independent of TV (in terms of style, format, and distribution) but also function, courtesy of Shapiro’s veoh application, as an extension of TV, as Internet TV.

To date, there has not been a breakout mega hit in original web programming. Web content still only appeals to fragmented audiences and studio executives still worry web content will cannibalize their audiences and revenue. Perhaps those problems will be mitigated when more consumers watch Internet video on their 42 inch flat screen TV in addition to their iPods. The bottom line is this though: Hollywood should not be complacent and wait for the future – they must disrupt it before someone else disrupts it for them.

I have argued before that the television industry would benefit from transforming its business model to enhance consumer engagement and adapt to new technologies. That is not to say that broadcast TV is in danger of disappearing (in fact a May 2008 Nielsen Report pdf found Americans are watching more traditional TV than ever) but DVRs, digital cable, and online video all make it increasingly difficult for networks to secure consistent viewers and advertisers. As a result, pilots, even beloved shows, either produce immediate results or face extinction. The system has become so reliant on statistics that a show whose viewership falls below 93% of its networks’ average viewers will be flat out NEXTed. (source: tvbythenumbers.com)

Wait a second. What about the people watching the show on DVD, on the Internet, or on mobile devices? How are they accounted for? And, if you’re like me, you don’t want to invest in a show when you know it’s likely to be abandoned without warning. But it is the nature of the business that a series won’t survive without the initial ratings. It’s a vicious cycle and breaking it would mean one of two things. Either audiences gain enough trust in the networks to risk their time and energy to invest in a new series, or the networks trust the audiences to improve the ratings of a show even after a poor start.

What we have here is what smart people call a Hegelian dialectic, the idea that the tension between two opposing forces is resolved through a synthesis. In this case, the tension between the networks’ old consumption expectations and the viewers’ new consumption habits has resulted in a new Hollywood experiment: web shows.

In an article featured in August’s Wired Magazine, “Hollywood Has Finally Figured Out How to Make Web Video Pay,” Frank Rose explains why online video holds such promise for TV and film Studios:

Sure, the YouTube explosion was fueled by amateurs, but it will be showbiz professionals who cash in on Web video. That’s because most big corporate advertisers want a safe, predictable environment – not the latest YouTube one-off, no matter how viral.

As an example, compare Hulu with YouTube. Hulu supports pre-roll ads and brief commercial interruptions because it has licensing deals with Hollywood content providers. In contrast, advertisers would never want to be associated with some (most) of the videos on Youtube and users would never want to see ads while watching amateur content. For this reason, Mark Cuban predicts Hulu will surpass YouTube in revenue by the year 2009. It is entirely likely.

I think it’s fair to say that we are entering an age where people would rather watch compelling stories than boneheaded pranks and gags. According to businessweek.com, ManiaTV scraped 3,000 user-generated channels and replaced it with professional content. As ManiaTV’s CEO Peter Hoskins explains in the article:

Roughly 80% of people were watching the professional content produced by celebrities such as musician Dave Navarro and comedian Tom Green. What we found out is, we don’t need the classical user-generated talent when we have the Hollywood talent that wants to work with us.

But while professional content is in high demand, developing a system to monetize it is incredibly challenging. Wired’s Rose notes:

So far, however, this is a gold rush without any gold. Nobody knows how the business is supposed to work – what kind of stories to tell, whether to tell them in 90 seconds or 20 minutes, whether to build a destination site or distribute episodes across the Net, how to generate revenue, how to do it all on a shoestring.

In this Wild Wild West of web video, there are many uncertainties, but the biggest one is how to make money. Allow me to address this concern:

Will Internet consumers and their ADD have the patience to watch commercials on the web?

I believe they will. Right now, Hulu has about 2 minutes total ads for an hour TV show. If the video’s streaming quality is good and the content is engaging, viewers will tolerate four 30 second breaks. If you ask me, watching a program on TV would make me more impatient. Without a DVR, I have to sit through 16 minutes of commercials for an hour long program. Why wouldn’t I flip to one of my hundred other channels during that time? In the two minutes before my show returns, I can search around for awhile, see what’s happening on From G’s to Gents or head to the refrigerator to make a sandwich. Or, if I have a DVR, I’ll just skip the ads altogether! On the Internet, I’m going to watch that 30 second ad. And I would think that the more a commercial is seen, the more value it has as an advertisement.

Actually, the best chance for an ad to be seen is to broadcast it to the most people. The television industry makes all its money off its traditional advertiser-supported business model. If consumers migrate to the Internet to watch TV content, they may never return. And a few short online ads won’t cover the affiliate fee revenues lost by the networks during their regular programming.

Certainly, right now, web ads can never substitute for TV ads. Rather, web content provides an excellent supplementary line of revenue, given its low cost. While according to this biz-tech report, TV still reigns over the Internet, there is still a definite audience for the Web. Thus, the key for the entertainment industry is to harness both arenas. It will take some serious experimenting from the corporate powerhouses to establish a lucrative business model and there will be some financial losses along the way. But the benefits of moving to digital distribution will keep the studios at the top of the online video food chain, no matter how many people have iMovie. As Rose writes:

Instead of pulling in millions a year, [the studios will] be scrambling for nickels and dimes. No surprise, then, that some of them think of Web video as a sort of farm club for TV: Why spend $2 million to make a half-hour pilot when you can shoot some high-quality Web episodes at $10,000 to $30,000 a pop, post them online to build buzz, string them together to make a series, and then port the whole thing back to television, where the real money is?

But not only do web shows function as an inexpensive experiment, they also allow viewers the time to get to know the characters and sink into the story line. Web series do not require immediate results, enabling viewers to be more trusting of new content.

Plus, with web video, studios can more accurately understand a show’s popularity. Whereas TV depends on measurements that are largely speculative and inconsistent such as the Neilsen Ratings, the Internet’s audience measurement (with the likes of Nielsen/Net Ratings and comScore) offer detailed analysis on consumer demographics and behaviors. It is now possible to show advertisers definitive proof that their target audience is being reached. Additionally, content creators can make more informed decisions about what works and what doesn’t if they decide to translate the property to broadcast TV.

Surely you’re not suggesting webisodes and TV episodes can be easily exchanged and tossed around to and from the television set and the Internet?

I am not. Let’s first compare the two media. While webisodes do not have a definitive form, they are shorter in duration (2-15 minutes) and typically span across many episodes (around 100). Webisodes are released daily, weekly, or monthly and often stick to a serial storyline. TV episodes on the other hand are longer in duration (30-60 min) and are usually released in a weekly format. Traditional TV is more of a social activity, Internet video is an individual experience. Internet video can be watched whenever and wherever, appointment TV brings content to a fixed location, at a fixed time. As you can see, both TV and web stories are designed to meet their respective forms. So you can imagine the problems when a five minute series designed to be watched on the fly is inflated to a thirty minute show.

Producers Marshall Herskovitz and Ed Zwick discovered this first hand when NBC decided to bring their popular web series Quarterlife to prime time.

The cast of Quarterlife

According to their social network, Quarterlife’s target audience consists of “creative people, passionate people, people who want to change the world.” Sounds like the perfect audience for an NBC show doesn’t it? Why Ben Silverman and NBC thought that mass audiences would also relate to this show, I don’t know. The series averaged a strong 250,000 views when it ran on MySpace but on NBC it collected a measly 3.1 million viewers. It was the worst performance by any NBC prime time show in 17 years. Say it with me now: NEXT!

But why the epic flop? Quarterlife follows a group of college graduates struggling to find employment, relationships, and their own identity. The main character, Dylan, video blogs about her feelings on the quarterlife social network, an act which many critics found to be self-obsessive and whiny. And that’s just it. The people who relate to her internal and external conflicts and her use of an online social network are the twenty something year olds currently entering the job market. A show designed for a specific audience – creative, artistic millennials – belongs where that group spends the most time: on the web.

How can web shows ever make a substantial profit off advertising?

Rose cites an upcoming NBC web series, Gemini Division, as utilizing innovative product placement. (check out Cisco’s TelePresence) This has certainly been an option for many web series. The show Quarterlife featured blatant Toyota branding as well as promotions for its own social network, quarterlife. But Hollywood needs a more dependable model than a few car logos and an ad that says, “This program is brought to you with limited commercial interruption by some toothpaste brand.” As Variety’s Dianne Garrett notes,

However, advertising, while also growing, is lagging. And it definitely doesn’t cover the cost of production for most of the Web series popping up online. To help underwrite the costs, producers are lining up sponsors, but even they don’t necessarily cover costs.

In November, Eisner told the New York Times that “Prom Queen” cost $3,000 per 90 seconds, that it made a couple thousand dollars and that the sequel lost money. “Quarterlife,” meanwhile, cost north of $80,000 per 8-minute episode; sponsorships by Toyota and Pepsi didn’t fully cover the costs.

How to make money off advertising is a huge concern and it may be worth exploring untraditional approaches. For instance, one popular system amongst video sites involves advertisers paying a fixed amount based on the views a video receives. Advertisers on Blinkx will dish out $60-plus per 1,000 views to be placed alongside professional content. (while paying 7$ for user generated content). In the future, higher demand for online video should increase the expense of advertising even further. But could this model work for Hollywood?

Additionally, because web shows appeal to a narrow audience, advertisers increase their chance of reaching their target audience. For instance, athletic apparel, trucks, and movie trailers would play before a webisode about a fictional sports team. But that has not been enough to fuel an advertiser-support model. Tim Leavitt takes this narrowcasting a step further on his blog by imagining a highly calculated advertising system:

I envision a web site (or a stand-alone downloadable application) that tracks users’ media-watching preferences, coupled with a Netflix-like ratings and recommendations system. Taking into account users’ basic profile information (age, sex, zip code, etc.) and previous clicks on various advertisements, this detailed profiling would create an advertiser’s dream – the ability to narrowcast their advertisements to an ideal demographic with specific interests, to a very controlled degree.

Viewers would see different advertisements than other people watching the same program, based on the information included in their unique profile. In return, advertisers would pay a premium for this luxury to make up for an overall decrease in advertising that would go along with each program. This system works better for the viewer as well. Imagine only seeing one or two commercials per program, and they’re always for your favorite beer or department store.

If executed properly, this idea seems like it would appeal to producers, distributors, and advertisers, but there are of course privacy issues: how well do people really want advertisers to know them? I can’t help but have an image of Minority Report…

Thus, the question of how to make a substantial profit does not have a definite answer. I am confident, however, that as web video becomes more popular, the advertising dollars will follow.

Who will watch web shows, besides the occasional insomniac web surfer?

Right now, online hits tend to be viral one-offs rather than serial narratives. But that’s changing. In 2007, Electric Farm Entertainment produced “Afterworld,” a show about a catastrophic event which leaves 99% of the human race missing. The show ran for 130 episodes on a 3 million dollar budget, and has a loyal LOST-like fan base.

One of the best ways to draw huge numbers is through star power. Joss Whedon’s Internet film “Dr Horrible’s Sing Along Blog” starring Neil Patrick Harris, crashed after 1,000 people accessed the site in a single second. Electric’s latest project, the NBC distributed Gemini Division, is poised to have similar success with Rosario Dawson.

Other times, no names become a phenomenon because of their endearing pseudo-realism. Lonelygirl15 exploded on MySpace and YouTube, where it has generated 50 million views. Now Dr. Horrible and Lonelygirl could not be any different in terms of style, production, and distribution. But they are both examples of web series which have gone viral and attracted “insanely massive traffic.” I believe if Hollywood more actively embraced web 2.0, and involved Hollywood and/or YouTube celebrities, they could appeal to an audience beyond web crawlers.

And some have. Warner Bros. has started to get serious about made-for-web TV shows, launching Studio 2.0 in 2006. Of the 24 web productions (costing 3 million dollars), Viralcom is the most notable, a show about a movie studio which produces professionally scripted user generated videos. The New York Times, which tracked Studio 2.0 early on, highlights the need for Hollywood to commit to a stronger web presence:

The shift underlines a growing realization among the big Hollywood studios: Web entertainment is evolving so quickly that they must take on more financial risk to keep up. So far, Warner and most other traditional studios have tried to lock down a comfortable, low-risk business model before venturing too far online. That approach has slowed them down, delivering a competitive edge to scrappier, upstart production companies.

Indeed, the risks are great. But if Hollywood devoted its capital and human resources to produce engaging web content, and promoted it like they do TV Shows and movies, they could potentially draw large audiences and in turn, advertisers, who would compete for the right to provide limited commercial interruption.

Web video holds exciting opportunities for Hollywood. The studios have been, and will continue to be, the masters of stories; they just have to be willing to adjust how they present them. Assuming a successful business model develops for web video, see if you can imagine these scenarios:

• ABC’s web show expand on the world of LOST, following minor characters or background stories, and each episode makes a meaningful contribution to the whole. These webisodes are not deleted scenes or behind the scenes coverage but their own separate serial narrative.
• NBC airs the PG version of Friday Night Lights on broadcast television and the rated R version on the Internet. As a result, the show appeals to a diverse range of audiences.
• FOX places its cancelled show, Fringe, on the Internet, where it gains a loyal fan base. The series’ popularity soon reaches a broad audience and FOX returns the show to its line up, where it thrives in primetime.
• CBS discovers an intriguing independent web series, The West Side. The network pick its up, provides a larger budget, promotes it, and distributes the series online, all while allowing the original creators to have complete creative control.
• Finally, all of the major networks host their own original web series, where they profit off low budgets, inundated traffic, and elevated advertising fees.