From...

August 27, 1999
Web posted at: 8:04 a.m. EDT (1204 GMT)

by Lessley Anderson

(IDG) -- Short films, a format once limited to the occasional film festival or city art-house cinema, have found a new audience – online.

Seattle-based AtomFilms, with a growing collection of hundreds of independent, short, live-action and animated films, has struck distribution deals with RealNetworks, Snap, Warner Bros. Online, digital recording label Atomic Pop (new home of Chuck D and Public Enemy) and others. AtomFilms will supply the sites with favorite films from its collection, downloadable for viewing with Macromedia Flash or RealNetworks' G2 player.

In addition to syndicating short films online, AtomFilms shops them to cable-television networks and airlines. So far, AtomFilms has placed films on HBO and the Sundance Channel in the cable arena, and on in-flight programming through Continental Airlines and Air Canada.

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In some of the deals announced Monday, such as the Warner Bros. Online arrangement, the site pays the film distribution company a licensing fee. In other cases, AtomFilms will get a cut of ad revenues. The filmmakers share in a small percentage of these fees, after they've paid back the royalty the company doles out when the films are selected. (AtomFilms selects about 10 percent of the creative material submitted by filmmakers, and gives the selected artists stock in the company. AtomFilms would not reveal the royalty or number of shares filmmakers receive.)

The syndication model is common among entertainment-news sites such as E Online and gaming companies like Total Entertainment Network, which partner with portals, communities and other highly trafficked sites that repackage their goods for mass consumption. But among entertainment-programming companies, AtomFilms is one of the first to embrace the syndication model openly. Most tend to adhere to the "destination" model, which relies largely on revenues from advertisements seen by visitors to the site.

Mika Salmi, founder and CEO of AtomFilms, describes his company as a "programmer" for the Web, a term drawn from TV-speak. The affinities with traditional media don't end there. AtomFilms, like music site Launch Media, recently added NBC President Warren Littlefield to its board of directors. Littlefield helped distinguish "Must See TV" during his tenure from 1989-98 with hits like Seinfeld, Friends and E.R.

Salmi has also drawn on music industry business models in the formation of AtomFilms. He believes that the role of his company should not be to create content, but rather to find the "hit makers" of the short film and animation genre, and then distribute and market them through the Web.

The time for building a business around short films, Salmi says, is now. Not only are Web sites looking for "stickiness," which can be provided by creative entertainment programming, but the supply of short films is on the way up, creating opportunities for the discovery of new talent.

"The entertainment landscape is shifting. Digital cameras and PC-based editing tools are becoming more popular," says Salmi. "In the near future, I think instead of maybe joining a rock band when you're 16, you might make a short film."