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You have to hand it to Rob Burgess: Macromedia's 41-year old chairman knows how to make a splashy Hollywood entrance. Late for our recent afterwork meeting at a Los Angeles restaurant, the software exec exited from a huge black, stretch limousine. He explained later, almost sheepishly, that it was the driver, not the limo, that he always sought out whenever he came down from Silicon Valley.
Whatever. Fact is, Rob Burgess, like so many in the Net crowd, is looking to take Hollywood by storm. Burgess' baby is is a year-old Web site called Shockwave.com, which offers up Net versions of South Park, Britney Spears music videos, and other snippets of entertainment designed to lure consumers to their computers. Shockwave has spared little expense to increase its stable of artists: In recent weeks, it has added $1 million in production costs for cartoons from director Tim Burton, $2 million to make 39 "Webisodes" from South Park creators Trey Parker and Matt Stone, and made a $5 million investment in Spiderman creator Stan Lee's new publicly traded company.
By Hollywood standards, this isn't big money. But Shockwave lost nearly $11.2 million in the most recent nine months for which numbers are available -- almost twice the revenues the company brought in. Burgess -- sipping a Bloody Mary -- isn't worried. More than 600,000 folks visit the site each day, staying for as long as 12 minutes each. Heck, he says, Shockwave.com gets more kids under the age of 12 each month than Nick.com, the Web offspring of ultrasuccessful kiddie cable channel Nickelodeon.
DIFFERENT STROKES.
Halfway through his spiel, Burgess stops. A gregarious man with a quick grin and super confidence, he can't believe I'm not lapping this up. "You're such a skeptic," he says. "Why is that?" I try to explain that maybe it comes from being a 48-year-old guy trying to understand a site geared toward 15-year-olds interested in South Park-style burping and farting jokes, Britney Spears, and Lord knows what else. I mean, the odds of me getting hooked on the monsters and superheroes being conjured up by Stan Lee for the site are, well, remote.
Just look at the gaggle of new sites popping up almost daily to feed America with short movies and gross-out cartoons, like the "Frog in a Blender" animation that became a huge hit for Shockwave rival AtomFilms. Is there an audience for this stuff beyond the under-20 crowd? Is anyone really going to wade through sites with names like Pop.com, Icebox, Erupter, and whatever else is out there, to create the critical mass needed to turn a profit?
Burgess is undaunted by any of this. For starters, he says, Shockwave's parent company, Macromedia, provides much of the Internet with a player for streaming audio and video. The Shockwave/Flash player allows surfers to download cartoons and those live-action clips that show up in tiny boxes in the middle of your screen. Today, 128 million people alone have the Shockwave player -- it's installed on about 52% of all computers. Moreover, visitors continue to sign on every day, and each time they do, they get a little sample of Shockwave.com's unique content.
A NETWORK?
O.K., O.K., I get it: Macromedia leads you to the water, and Shockwave hopes you take a drink. Right now, says Burgess, the average time a person stays at the site is climbing rapidly. And he hopes they'll soon be sticking around even longer, when South Park starts releasing its special Webisodes and Tim Burton unleashes his -- something -- called Stain Boy, which I don't even want to think about. "We're ready to provide entertainment," says a grinning Burgess. "Think of us as a network."
A network? Sure, he says. In time, he'll sign affiliation agreements with DreamWorks' Pop.com, plus the Icebox folks who brought us the TV show Seinfeld. How he intends to make money is still a little unclear. "We'll have advertising, sponsorships, games, all kinds of ways to make money," he says. And, heck, maybe he can even get the likes of Pop.com to pay him for carrying their stuff -- never mind that the cable world has for years been doing it the other way around, with ESPN getting the money instead of the cable operators.
Still, the real money seems to be somewhere down the road -- and it might not be online. Burgess has offered stock options to a wealth of hot talent, that also includes Taxi creator James Brooks and Twin Peaks creator David Lynch. Under the terms of the deal, which he won't disclose, Shockwave gives its creators not only stock in the all-too-inevitable offering but also ownership in whatever they create. That's different from Hollywood, which usually wants to control the product and claims ownership of anything it sells.
PLAYING FOR KEEPS.
Shockwave shares everything, and the big upside will come when -- and if -- its online shows become such big hits that someone wants to make a movie, a TV show, or maybe even a comic book from them. "And it will happen," says Burgess. "Look at South Park. It started on a small cable channel -- Comedy Central -- and they made a movie out of it."
Whoa, I'm thinking. How do you go from 600,000 folks a day spending 12 minutes at their PCs to a blockbuster movie? Well, that's the tough part, even Burgess will admit. But he has folks who believe in him, including Silicon Graphics founder Jim Clark and top-tier venture-capitalist firm Sequoia Capital, which has contributed some of the $44 million Macromedia raised in December.
And don't forget the Shockwave player: Once Burgess has you, he doesn't intend to let you go. Sign on for Shockwave, and he'll e-mail you updates on the software. Maybe later he'll tell you when the next Stan Lee Webisode is ready for downloading.
IT IS COOL.
Flipping his IBM ThinkPad on the table, Burgess flicks the keys to bring up a new player. And I have to admit, it is cool. An animated lazy Susan of a machine twirls around stills for the hot new offerings, and a mechanical-type arm lifts the one you might want to sample. Best yet, it works.
A music video from Dr. Dre leaps to the screen, and the rapper's music starts to roll. I can see a 15-year-old lapping it up. So can Burgess. Moments later, with a wave of his hand, he's off to a party somewhere in Hollywood in that gigantic black limo. So I'm asking myself: Is this the beginning for Burgess, or just the end of our meeting?
Grover follows the ever-entertaining ways of Hollywood as Los Angeles bureau chief for Business Week EDITED BY DOUGLAS HARBRECHT
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