WHILE CANADA STEALS movie production from beneath our noses, a different sort of film economy has sprung up in Seattle. But don't look for cameras,


Silicon and celluloid

With today's filmmakers sleepless in Vancouver, Seattle's enfeebled film industry turns to the Web.

WHILE CANADA STEALS movie production from beneath our noses, a different sort of film economy has sprung up in Seattle. But don't look for cameras, crews, or craft service tables on our streets. The glory days of Assassins, Sleepless in Seattle, and Northern Exposure are long gone. Local production of traditional film (and television) has declined steeply, the victim of both Canadian government subsidies and the globalization of Hollywood—which seeks out the lowest labor costs worldwide.

But while the local film business is "not going to come back," says Suzy Kellett of the Washington State Film and Video Office, an amorphous, undefined new movie- and entertainment-related industry is emerging in Seattle. Its high-tech components include the Web, content, animation, digital, broadband, streaming, and the like—and it couldn't have come at a better time. The WSFVO estimates that local spending by feature-film crews dropped more than 60 percent between 1997 and 1999. Annually, state hiring by film and TV productions ranges from 2,000 to 6,000 jobs per year—but that's short-term employment, often totaling mere days, for actors, extras, grips and caterers.

The WSFVO doesn't yet track the employment figures and increasing financial impact of new local dot-coms in the wired entertainment businesses. It should. While Vancouver, BC, looks more and more like Hollywood North, the real economic future for the Northwest film community may lie in this nascent industry—if somebody can just find the right model for profitability.

PROMINENT AMONG these new area companies is 2-year-old AtomFilms (www.atomfilms.com), which has grabbed a huge amount of publicity—if not profits—showing and distributing titles from its library of over 1,500 short films. Its current national ad campaign features the gelatinous, unsettling Angry Kid, created by Aardman Animations (Wallace and Gromit, Chicken Run), a character appearing exclusively on Atom's site. Ultimately, the company hopes to produce its real earnings off-line—meaning traditional film, TV, and ancillary products. Atom has more than 100 Seattle employees and received 1.5 million unique visitors to its site during June. Company CEO and aspiring minimogul Mika Salmi has attracted private backing exceeding $20 million—comparable to a movie budget—with an estimated five percent of its production and development outlays being spent locally. It's clearly the most ambitious Seattle player in its category.

Taking a less consumer-oriented approach, Honkworm (www.honkworm.com) produces mostly animated content for other Web sites. The 3-year-old start-up has a lean Seattle presence of fewer than a dozen employees, with one-third of its production and development budget spent locally. "We're not like a studio," says line producer Chris McCune, emphasizing that his company and other dot-coms outsource most of their work—unlike the Universals and 20th Century Foxes of yore.

A division of a current Hollywood studio, the Walt Disney Internet Group, houses Mr. Showbiz (www.mrshowbiz.com)—a company originally founded by Paul Allen's Starwave in 1995—up in the Smith Tower. Between Real, Atom, and his own operations, Disney VP of entertainment Erik Flannigan notes, Seattle now boasts national reach in entertainment media. He recalls the early days when there weren't even a dozen movie-related editorial jobs in town; today he employs 40, having doubled his staff in the past five years. "That's where the change has been huge," he says. Two million unique visitors per month log onto both Mr. Showbiz and 3-month-old Movies.com, a diverting, gossipy database listing over 60,000 titles.

Interestingly, Movies.com now competes with the British-based Internet Movie Database (us.imdb.com), bought by Amazon.com two years ago. The site receives up to 200,000 unique visitors per day and averages over three million per month, according to Media Metrix. Comprehensively indexing 220,000 movie and television titles, IMDb is—in addition to being the film critic's best friend—a great way to find some favorite old movie when you can only remember one actor's name and that he costarred with a monkey. IMDb's Seattle presence is "only on our server," says an Amazon spokesman, but it steers valuable shopping traffic to Amazon's home site.

Serving a similar marketing angle is Film.com (www.film.com), founded in 1994 by film critic Lucy Mohl, then acquired by RealNetworks in 1997. The site's movie clips and trailers are an obvious match with Real's popular streaming technology. Now the programming director for Real, Mohl says, "We paved the way" for other local film-related companies such as Atom and Honkworm. "We're there to expose them." Film.com has "grown in scale and scope," she adds, since her parent company now includes movie- and entertainment-related areas of its Real.com Guide site. (Total staffing in Mohl's media programming group numbers about 10.)

LARGE OR SMALL, these companies are still searching for the right digital-meets-entertainment strategy. The sexiness of movies and smarm of infotainment usefully draws browsers to Real, Atom, Amazon, and Disney, but where's the payoff? Real and Amazon have products to sell. Atom says it receives 55 percent of its revenues from syndicating its movies and 40 percent from ads. Disney's building its larger Go.com network and can afford some loss-leading, brand-building sites. The Northwest may indirectly benefit from such expenditures, but some will recall when Microsoft, after spending millions of dollars, finally decided to pull the plug on Cinemania in 1998.

Watching his money carefully, Paul Allen has made his small 3-year-old Clear Blue Sky Productions something of an exception to this trend. He's using his high-tech wealth and Hollywood connections to produce niche films like Titus, Me & Isaac Newton (scheduled for October release) and the John Turturro and Emily Watson-starring The Luzhin Defense (premiering at the Toronto film festival next month). The company expects to double its local staff of five in the next year and produce four to six movies per year.

On a larger scale, Allen owns a big stake in the DreamWorks SKG studio and has committed to invest $50 million in troubled, tardy Pop.com. (That LA-based company was once considered a potential rival to Atom, but now seems like a more likely target for a merger.) Meanwhile, as Allen rapidly buys into cable companies and broadband, his presence in the Northwest—plus the growing community of high-tech angel investors—is another crucial factor in the region's digital-filmic future. His restored, state-of-the-art Cinerama is already wired for digital distribution and projection—the very expensive holy grail of the exhibition business—but hasn't yet installed a projector. "We're waiting for a standard to happen," says an Allen spokesman.

Among Seattle's smaller wired players is 8-month-old start-up Microcinema, Inc. (www.microcinema.com), whose Joel S. Bachar says, "Broadband is the new commodity, it's the new oil." As for the much-vaunted, often-delayed convergence of digital and entertainment realms, he says, "That's our goal, that's George Lucas' goal, that's Atom's goal."

In a similar bind is Big Picture (www.thebigpicture.net), established last year in the old Casbah space on First Avenue. There, founder Mark Stern is already exhibiting movies via T1 lines and digital projection—while also offering martinis and steak. Presently catering to corporate clients, he hopes to build an upscale chain of similar venues for the ticket-buying public. Problem is, just a handful of digital features exist, notably Time Code, Chuck & Buck, and some copies of Phantom Menace.

LIGHTS, CAMERA, money? Last year the economic benefit of feature-film production in this state fell to $7.7 million from its peak of $20 million in '97. How does that compare to the dollars unloaded by the dot-coms? Whatever their business model, nobody's willing to say exactly what they spend locally, but their aggregate contribution is likely higher, especially when trickle-down economics—salaries, office space, lattes—is considered. Bachar calls it "the ethereal gold rush," since no one has yet identified the magic combination of content and distribution. (It seems that the smartest, richest players, like Allen, are hedging their bets.) As for the future local growth in this nebulous sector, the recent Nasdaq drop reminds us of how a tech boom can go bust—recalling Hollywood's own volatile, cyclical history.

So while movie stars flock to Vancouver, can Seattle become a new center for the less glamorous, computer-based entertainment industry? "Could be," laughs a guarded Lucy Mohl, pointing to our city's past history of dashed hopes in the traditional film biz. "Instead of trying to do Hollywood North, we've digitized our efforts."

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