• by kyle , Daisy Whitney , June 28, 2007

After a lifetime in traditional media, former Disney chief Michael Eisner is building an Internet production company. Can he create blockbusters for the MySpace generation?

At Michael Eisner's Vuguru offices in Beverly Hills, anywhere from three to six interns spend all day, every day scouring the Internet for videos. They post the best, the most popular or the most interesting ones at Vuguru.com under a section titled "The Cream."

The video trawling is part of the daily workload at Vuguru where Michael Eisner requires that his company stay on top all the trends in Internet video. He's an Internet video executive now, running a much smaller company than Disney, but one whose aim is to anticipate consumers' fickle tastes and to produce online series they'll have to watch. Appointment TV for the Internet age - that's what Eisner is after.

Having your ear to the ground, or in this case, up to six sets of ears, is a prerequisite in this rapidly moving world of online video.

"Look at those videos and there is a lot of good stuff out there and, like everywhere else, there is a lot of junk," he says. "Now with the Internet, 90 percent is unwatchable and maybe a 10th of one percent is brilliant. Sony is creating good cameras. Google and Yahoo are creating ways to find stuff, and people, all over the world, with the technology available at a cost they can afford, without the necessity of flying to Hollywood or New York - they can now create and we are seeing the creation everywhere."

Numbers Are Just Numbers

And yet while creation flourishes, it's still important to have a filter. That's what Vuguru does with "The Cream."

"Each day, over 100,000 new videos are posted on leading video sites such as YouTube and MySpace Video. That's close to 70 videos each minute," states the site. "You can sit there and wait for computers and their sophisticated algorithms and 'most popular' rankings to tell you what to watch. But as good as computers are at tracking minutiae, when it comes to what is subjectively good, they simply cannot compete with the human brain."

So that's the goal of Vuguru - apply the head, and the heart, to Internet TV.

It's no secret that online video is red hot. Google bought YouTube for $1.65 billion in October 2006. Online video advertising sales will grow 89 percent this year to $775 million, according to eMarketer. Venture money continues to literally pour into the coffers of online video startups. In addition to Vuguru, Eisner has invested in online video destination site Veoh.

And when a CEO as iconic as Michael Eisner places a bet on online video, it's worth knowing why.

A Content Guy at Heart

Vuguru's first series was "Prom Queen." The ad-supported 80-episode show debuted in April and is slated to run through June 20. The series takes place over the last two months of high school leading up to the prom. Each 90-second episode has run on MySpace, PromQueen.tv, Vuguru.com, Ellegirl, starstyle.com, Veoh and YouTube. Eisner contracted with the production team Big Fantastic, who produced last year's Web series "Sam Has 7 Friends," to create the youth-oriented show.

By early June, "Prom Queen" had attracted more than 8.9 million views across all of its distribution sites. That kind of reach enabled the show to turn a profit. Advertisers include Hairspray, Pom Juice, Fiji Water, Teleflora.com, Verizon and MySpace.

"Prom Queen" is a far cry in scale and scope from Raiders of the Lost Ark or The Lion King, two of Eisner's best known projects. But Eisner has always considered himself a content guy.

"It started when I was in college and interested in theater and evolving through a 40-year career, not the least of which was my son, when he graduated from the Anderson School of Business at UCLA and started an Internet company. He was too early trying to deliver video entertainment in a narrowband, dial-up world. So I was interested in the delivery of content early on," he says.

Short but Fantastic

As online video quickly evolved in 2006, Eisner watched professional content become the relevant and dominant form. That's when he started looking for an idea to invest in. "I have been looking for the last year, and what became clear from YouTube and other places was short form. It was short bites, and mobile video is short form obviously. This [Prom Queen] was the evolution of all those things together," he says.

Eisner admired the storytelling and professional look of production shop Big Fantastic, so he reached out to them to produce "Prom Queen." In late May, Vuguru was nominated for two daytime Emmy Awards for broadband content for both "Prom Queen" and "Sam Has 7 Friends."

But he disagrees with the perception that youth today has a shorter attention span than prior generations. "People are consuming half-hours more comfortably online. I don't think that the so-called generation of people that have no attention span dictates short videos. I had no attention span when I was 15. I don't have much of one now. Looking out a window and concentrating on English lit was tough then. The shortness of the videos deals with the smallness of the screen."

Shortness works for ads too. "Prom Queen" may also become a template for how to do online video ads without ticking off consumers. The ads from sponsors such as Hairspray and Verizon are tiny, about three to five seconds. That makes them eminently palatable in a world where consumers have grown weary of 15- and 30-second online spots.

In early June, Vuguru had begun work on three to four additional episodic series to follow "Prom Queen" over the next 12 months.

Eisner's keeping quiet as to the content but viewers can expect to see some similarities to "Prom Queen." For starters, Vuguru will probably grant an exclusive window to a video site, as it did when it gave MySpace a 12-hour exclusive window for each episode of "Prom Queen."

The new series will likely only run for a week or two, rather than for 80 episodes as "Prom Queen" did. Ads will also be short for the new shows.

Creativity Changes the Game

The show has attracted attention worldwide, Eisner says. In fact, he spoke about "Prom Queen" during the management conference Expo-management Spain in Madrid in late May. "I sensed how interested the audience is in the conversation about video on the Internet, about democracy on the Internet, about democracy turning into anarchy without the human factors involved," he comments. "They are trying to understand how creativity can be the one thing that changes the game and they are seeing the future."

Despite the interest, he doesn't plan to mimic "Prom Queen" with his new slate of projects. He won't base his next show on numbers or research from the first. "Go with your gut," he says.

He's also careful not to treat the Internet as a radical new entity. To Eisner, the Internet is simple - it's the next place on which people are consuming content. "It's a creative way to express yourself. It's fun, exciting in today's world. I have always enjoyed dealing with new creators, new actors, directors, writers. This is kind of a new form. It's direct to the world," he says.

The revenue is minuscule for now compared to the traditional world, but so are the costs. "I don't think the result is the same leap less [in quality] than the more expensive production. Yes, people are working for less money; yes, they are shooting quicker. That doesn't mean it's not as good. So if you compare Pirates of the Caribbean to "24," it's a gigantic leap in cost, and so would "Prom Queen" be to "24."

You Can't Phone It In

But the lower costs shouldn't fool anyone. The level of talent is not declining, Eisner says. "Talent has always been a combination of inspiration and perspiration. It is not something you phone in. You need talent and personality and perseverance, and people who usually have talent and the passion get to wherever they need to be seen. I have always felt there is a dearth of talent, and spent most of my career looking over and under any rock for that talent. That said, this technology has made it a lot easier for people to express themselves. Most of it is not very good, but some of it is very good. I think [for] those people in the past who would have had their work exposed in other ways, this technology makes it quite convenient. You don't have to travel as far."