Pop.com is the joint venture that partners DreamWorks SKG, Imagine Entertainment and Paul Allen hoped to launch on the Web last spring with a mix of animated and live-action short films. But Pop's founders -- including Steven Spielberg and Jeffrey Katzenberg of DreamWorks, and Imagine's Ron Howard and Brian Grazer -- have struggled to find a viable business model for their site, which still hasn't launched.
Last week, Pop.com was in advanced discussions to be acquired by Ifilm Corp., which operates a film portal and directory on the Web. But those talks were terminated on Friday. Katzenberg said the Pop partners decided the deal with Ifilm was ultimately "too limiting," and they didn't want to lose control over their future on the Internet. Ifilm declined to comment, but sent an e-mail to employees confirming the end of the negotiations.
Instead, Katzenberg and Howard said Pop plans to operate for the time being as a small workshop or lab that creates original Web programming. It isn't clear where that programming will be Webcast, but one strong possibility is Countingdown.com, a small movie fan site that Pop.com purchased earlier this year.
Countingdown.com this summer featured a successful promotion with DreamWorks in which several minutes of the studio's film "Chicken Run" were available for viewing on the site. In any case, it appears the grandiose Pop.com Web site the firms labored to create for more than a year may never be launched in the way that was originally intended.
Scaling back will have serious consequences for Pop's operations. Katzenberg said the site has spent $7 million so far, but plans to spend only about $1 million a year in the future. That will mean cutting the company's roster of about 70 employees back to perhaps a dozen. Kenneth Wong, the former head of Walt Disney Co.'s (dis)
Imagineering unit who is Pop's chief executive, said he hasn't decided whether he will stay with the venture.
For Pop's founders, the move to dramatically scale back would mark the end of a humbling yearlong odyssey that has proved how difficult it is for even the biggest names in traditional entertainment to make sense of the Web. Howard said the development of the entertainment Web site had been a "tricky, sometimes frustrating" process for Pop, as it has for many others trying to figure out the Web entertainment arena. He said the Pop partners "still have a lot of enthusiasm for the future of the medium," but want to be much more low-profile in their efforts as they wait for technology to make entertainment on the Internet a more rewarding experience for the user.
Howard said Pop will wind up "in a lot of ways back where we started." When DreamWorks and Imagine began talking about a Web venture, he said, the idea was simply for the experienced moviemakers to have a platform for experimenting with the emerging medium.
But when the dotcom IPO craze exploded, he said, it grew into a much bigger proposition with larger financial implications. When Pop was announced to the public last fall, it talked about using the Web to develop new characters or talent for movies or television.
But things changed again for Pop when the public-offering market for Web start-ups collapsed and Pop was unable to settle on an operational approach that could be supported by the poor economics of the fledgling Internet-entertainment arena. Future financial transactions involving Pop remain a possibility, Howard said, but now "our goal is to be lean enough and simple enough that we can respond to any opportunity that may come along."
