Web Video Makers Hope Software Finds Audience

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What does a company known for its hit Internet short films do for its second act? It tries something completely different.

Eqal Inc. is a company looking for new life after two breakout successes in online video. The company and its co-founders, Miles Beckett and Greg Goodfried, were behind the pioneering online video series “lonelygirl15” and its follow-up “KateModern.” The successful series “lonelygirl15” generated unprecedented buzz turned Eqal’s executives into the brightest stars of a still-nascent Internet video industry. They also helped Eqal (pronounced “equal”) land $5 million in venture funding last year from Silicon Valley and Hollywood investors.

Now, Eqal is branching into a different field: software development. This month, the company took the wraps off a program that allows filmmakers, Internet personalities, celebrities and other creative types to more effectively reach an audience online. The software is currently being tested and eventually will be licensed to users for an as yet undecided fee.

The software, called Umbrella, provides a template for users to customize their Web sites. The software then allows the owner of the site to see who is visiting and what they’re doing, which in turn allows them to create better content and sell targeted advertising.

Viewing the site doesn’t require registration. But registration gives access to additional content and an online community.

The technology behind Umbrella already powers several entertainment Web sites built and maintained by Eqal. The company currently helps manage “Get Cookin’ With Paul Dean,” an Internet show and community built around the celebrity chef. Eqal also works with TV producer Jon Turteltaub and CBS Corp. to run “HarpersGlobe.com,” a Web site that provides supplement material about the mystery TV series “Harper’s Island.”

Beckett, Eqal’s chief executive, said Umbrella is a direct connection to the company’s pioneering work in online videos.

“At our heart, we’ve always been a technology company,” said Beckett in an interview in Eqal’s spartan offices off Ventura Boulevard in Sherman Oaks. “When we raised $5 million, we did it with the goal of building Umbrella.”

Eqal’s executives said the company may at some point return to producing the type of online series that made them famous. For now, though, their priority is Umbrella.

“We want to be a digital entertainment company that will also help you build and manage your brand online,” said Beckett.


Covering its bases

Eqal’s expansion into software suggests the company is covering its bases in case Internet video fails to become a moneymaker.

Over the past three years, Internet startups trying to emulate Eqal’s video success have profilerated. Some have even had hits; Vuguru.com, a Web studio bankrolled by former Walt Disney Co. Chief Executive Michael Eisner, produced a Web series called “Prom Queen” that generated some buzz. But the flood of advertising that analysts anticipated would turn Web television into a cash generator has not yet materialized.

“Web TV is the way things could go in the future, but right now it’s an unknown,” said Kurt Scherf, vice president at media research firm Parks Associates in Dallas. “And it’s too big of a risk for an advertiser to go an unproven route.”

With Umbrella, Eqal will likely face competition from more established companies such as Ning Inc., a Silicon Valley startup that also allows people to create customizable social networks.

Umbrella is different, Beckett said, because it targets people known in the new-media world as “prosumers” budding filmmakers or established celebrities who want to put videos and other content on the Internet and reach an audience.

The launch of the software represents a milestone for both Beckett and Goodfried, who rejected lucrative offers from established entertainment companies after “lonelygirl15” went big. Instead, the duo went tens of thousands of dollars in debt to shepherd Eqal into what they hope will be a new phase of technological innovation.

“We knew if we made a deal with one of the studios, it would turn into us making 10 Webisodes for Network X, and we would be limited in content and technology,” said Goodfried, Eqal’s president.

What remains to be seen is whether the gamble will pay off. Industry watchers said so far the company shows promise.

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