60Frames shuts down, highlights two major problems with online video strategy so far.
1 - Why the VCs are Being Stupid About Online Video
A couple of nights ago, a successful and well-known entrepreneur/investor was telling me that VCs would only invest in content when they saw some kind of competitive edge. Today, with 60Frames sadly joining Mania TV as shuttered VC-backed online video content plays, I submit one more piece of evidence of how VCs are going about content the wrong way:
R.I.P. 60Frames Entertainment. Sources tell THR that the United Talent Agency-backed digital studio is shutting down operations due to a lack of funding. 60Frames joins the ranks of recently shuttered studios ManiaTV, PluggedIn (and HBOlab, to a certain extent), that have succumbed to a combination of dwindling ad budgets and wary VCs.
Incubated by both the UTA and web-based TV ad agency SpotRunner (which is having its own financial and legal problems), 60Frames officially launched in 2007; it raised $3.5 million in funding from Tudor Investment Corp and Bob Pittman’s Pilot Group, among others. The UTA-connection was supposed to give the studio an advantage over rival digital startups when it came to securing talent and distribution deals.
60Frames did have a number of deals in the works, including a content development deal with NBCU and comic-book deal with Oni Press; it had also succeeded at getting its shows like Blood Cell (pictured) picked up by sites like TheWB.com and FunnyorDie—but clearly none of that was enough. The studio laid off 6 staffers in November; the remaining seven employees have been let go.
Again, 60Frames might have failed for 10 other reasons… but just because you have what VCs perceive to be an advantage doesn’t mean it’s an advantage in the marketplace.
It’s a darn shame to see video content startups fall apart and shut down… I will tell you that.
2 - Why the Media Guys are Being Stupid About Online Video
While the VCs are looking for riches in all of the wrong places, the media guys aren’t any less “s2pid” either.
The media guys aren’t looking for anything competitive, they’re chasing hits. I’ve long argued that chasing hits - be it by way of viral comedy hits or series - is the sure way to go broke. 60Frames, after all, has had hits (nearly 7M views), such as this one:
How did that help them?
60Frames burned through $3.5M in funding. We, on the other hand, have crossed 50,000,000 views all time with no notable hit… and meanwhile, we have dozens of paying clients who license videos from us.
People, stop being stupid about online video and start building real businesses!
But, of course, no one will listen to me… so expect more shuttered startups, especially VC-backed ones.
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