Disney (NYSE:DIS) earnings were solid earlier this month, and their online performance has been sound too, but that isn’t stopping them from shifting and tweaking their Internet approach. The changes started with the purchase of Club Penguin in August. In November they made moves to strengthen their M&A practice. About ten days ago, they revealed Disney Online Studios – a new organization to focus on casual games and online social networks. Now, it’s online video getting a makeover.
In a launch story fed to the LA Times, Disney revealed their latest group: Stage 9 Digital Media. The group is an in house studio focused on developing original short form Internet programming for syndication on both Disney and 3rd party sites. The first show from the studio is called Squeegees. Debuting Thursday, it’s a comedy about window washing slackers. It will be distributed in ten episodes on ABC.Com and on YouTube. 20 other programs are also in development.
The idea for Stage 9 follows the lead of other Hollywood elite, including former Disney CEO Michael Eisner, and others, who are applying their talents and skill to online content creation. Eisner specifically is the power broker behind Vuguru, one of the earliest Hollywood digital studios to form for this purpose. There is also an assortment of competing efforts underway from startups like 60 Frames Entertainment (featuring the Oscar winning Coen Brothers), Deca, Comedy.com and National Banana (featuring Jerry Zucker of Airplane fame). At the studio level: Warner Brothers set up shop in September and CBS (NYSE:CBS) set up an in house team to do similar.
Part of the allure of these new digital studios is cost savings. Compared to television, Internet video can be done inexpensively. A full studio caliber Internet video production can be done for a few hundred thousand dollars, a fraction of what it costs to film a television pilot. Stage 9 says their projects will be made for 4-6% of the cost of a single primetime episode.
Talent development is another draw. For a big studio, Internet shorts are an opportunity to screen new filmmaking, acting and creative talent at relatively low cost. The next Scorcese, Tom Hanks, Scarlet Johansson or Cate Blanchett, could be a YouTube video away. And unlike in the old world, the studios won’t need to guess at the public’s approval. The social nature of Internet sites today is a popularity barometer and focus group from the start. If an online video, or its cast, has star appeal – the producers will know it. There will be comments and viewing metrics for proof.
Stage 9 says their goal is “to identify unique, compelling, and commercially viable projects targeted to become new media hits. “ They aren’t explicitly looking for programming they can retool or migrate for TV. That option is not, however, excluded. In the site’s Frequently Asked Questions section, they make clear that shows from the 30s (Lone Ranger) to modern hits like the Simpsons began in short form before migrating to TV. It’s entirely possible a hit built from Stage 9 could air on ABC a year later as full-fledged TV production.
According to the Times article, Stage 9 was in development for two years. Disney held off announcing it until the programming was ready for release.
Barry Jossen, an Academy Award-winning short-form producer and studio executive, is the General Manager. The target audience is 18-35 year olds. Ad sponsorships will be the primary revenue focus.
The 10 episode showing of Squeegee will be sponsored by Toyota (NYSE:TM). Each episode will run for three to five minutes. That’s a good bit less time than the seven and a half minute short that launched the career of Mickey Mouse. I guess Disney’s hoping that’s all it will take (and with a target audience being of the instant gratification generation, I guess they’re presuming our attention spans have shrunk too).