• by Gavin O'Malley  @mp_gavin, May 19, 2008

Thanks to viral marketing, engaging and well-produced content will distribute itself online, right? Wrong, according to a new report from Futurescape, a London-based digital entertainment R&D firm, which details several myths related to original Web content production in the U.S. and U.K.

"It's what we we've dubbed the 'viral fallacy,'" explained Futurescape Director Colin Donald. "Producers are adamant that launching a show requires a full-scale promotional campaign, possibly employing broadcast television."

As a result, said Donald, "total budgets will rise to reflect promotional costs, unless the producer has been commissioned by a social network that can be the promotional vehicle."

And, while production companies could end up spending more on the promotion than the actual production of projects, Donald cautions against falling prey to another common myth: that original Web content is cheap to produce.

"Analysis of American and British productions reveals a wide range of budget levels," Donald said.

Indeed, per-minute costs range from $2,000 for college mockumentary "Dorm Life" to $5,000 for Michael Eisner's "Foreign Body," to over $40,000 for "In The Motherhood," starring Leah Remini and Jenny McCarthy.

Still, those numbers are significantly cheaper than the per-minute budget of a broadcast TV drama, which can run between $61,360 and $75,000, which tops $3 million for a typical 44-minute episode.

Along with extensive research into the production of original online TV shows, the report contains in-depth profiles of 11 shows plus mini-profiles of 13 shows, and 31 studios and production companies.

Another popular myth attached to Web TV is the notion that the industry is still in an experimental phase.

"You can see complete end-to-end production models in place," Donald said. "For instance, MySpace can find a production company, commission a show from them, arrange the sponsors, distribute and promote the show, and through its deal with Elisabeth Murdoch's ShineReveille distribution company, even sell the format into the international television formats market."

"Of course, there is still a great deal of experimentation taking place in individual aspects of the medium--ad placements, formats and interactivity, for instance," he added. "But we believe that the sector is no longer 'experimental' in that complete business models are in place and can be refined. "

How is success defined in this new--if not experimental--arena?

"Our main criterion for success is when a show runs into more than one season--i.e., it has been recommissioned for a single sponsor or succeeded in finding multiple sponsors over successive seasons," Donald explained.

By that measure, both Lonelygirl15, at three seasons, and KateModern--the flagship online drama broadcast by social networking site Bebo, and in its second season--can be described as success stories.