Not long ago, iFilm announced it would become the Internet's movie theater. It would feature hundreds of short films directly under its control, as well as thousands more on other Web sites.
Then iFilm joined four other "leading content providers" -- Icebox, Filmfilm.com, Atomfilms, and Hypnotic -- as part of Yahoo's stable of entertainment, featured at Yahoo Movies.
The announcement should be cheered by fans of short films, a genre long ignored by Hollywood and relegated to little more than film-school homework. Now, thousands of shorts can be seen through one high-profile home, at a time when interest is growing quickly.
While this may seem like great news for iFilm, the leading short-film portal, the move now begs questions about its consumer-side business. Where just seven months ago iFilm said it wanted to be the short-film portal, its work has now been subsumed by a corporate big brother. Is this the first step toward the disintermediation of iFilm's consumer portal? It certainly seems that way.
"We want to provide visitors to Yahoo the ultimate starting point to all things movies on the Web," says Jed Rosenzweig, a senior producer for Yahoo Entertainment. "We don't create content, we aggregate it."
MODEL BEHAVIOR
Those words have a familiar ring to followers of iFilm, one of the most prominent Web-based entertainment companies, with blue-chip managerial bloodlines tracing back to 20th Century Fox, E! Online, and CNet, and investors that include Paul Allen's Vulcan Ventures, Sony, and Eastman Kodak.
But it's also had the most mobile of business plans, lurching from model to model since its February 1999 launch as the "leading online film destination and digital distribution network."
Ten months later, it relaunched, adding a new business-to-business play called iFilmPro and acquiring several entertainment services companies.
Then last May, iFilm repositioned itself again, as "the first comprehensive film portal and directory, with extensive editorial information and links to more than 4,000 Internet films," three-fourths of which were on competitors' sites.
Those last two lurches have created a binary company, with a consumer-side business trying to steer fans to short films all over the Web, and a business-side operation trying to move a stodgy, relationship-based Hollywood culture into the Digital Age.
With Yahoo's arrival, the consumer-side play, already facing the same difficulties of all online content companies, is now more dubious than ever.
PORTAL POLITICS
IFilm's Doug Sylvester says his company wants "neutral" relationships with the portals, but Yahoo moved faster than the rest to cut a deal. He insists fans will value both what Yahoo is doing and what iFilm continues to provide.
"We think the Yahoo folks are great at what they do," says Mr. Sylvester, iFilm's president and chief operating officer. "They have a mass market. They're putting resources into it, and it will bring people there. That said, in this particular category, we're drilling really deep. We pick up where Yahoo leaves off."
Viewers, though, may be hard-pressed to tell the difference, so what's in this for iFilm?
"Brands on the Internet have been hard to develop," says Dave Davis, senior vice president of investment bank Houlihan Lokey Howard & Zukin. "There really are only a couple of brands online that mean anything. Yahoo may come out of this whole shakeout as one of the few brands that consumers readily identify with."
Figuring out a way to snag a piece of that brand, as iFilm appears to be doing, even if it means giving up a piece of yours, is probably a smart move, Mr. Davis says.
POSITIVE EXPOSURE?
None of the five smaller companies has anything like the 56 million unique viewers that Yahoo draws every month. The biggest of them, iFilm and Atomfilms, have substantially less than 1 million unique viewers each per month, according to Jupiter Media Metrix.
And though PC Data and Jupiter Media Metrix figures show massive jumps over the past year in visitors and page views for iFilm, Icebox, and Atomfilms (anywhere from 800 to 3,000 percent, depending on the company and measurement), none is very big. Traffic on the smaller Hypnotic and Filmfilm.com can't even be reliably measured yet.
Nonetheless, all have amassed substantial catalogs, which Yahoo's in-house Web surfers are busily culling through, breaking down each short by genre, highlighting prominent ones, and wrapping reader ratings around them.
"It was a no-brainer for us," says Hypnotic founder and CEO Jeremy Bernard. "If Yahoo is going to talk about five companies that have a library of quality short film, we have to be one of those five. When Yahoo says, 'Let's do a barter deal and give exposure to some of your films at a favorable CPM,' it's not like we're dealing with some obscure Web site."
There likely is a broader reason for Yahoo's interest. It is rumored to be readying an entertainment-oriented broadband channel that could challenge the major networks in its breadth. Such a wide-ranging entertainment platform likely would be similar to Yahoo's existing business-oriented multimedia site, Financevision, and its just-announced ShoppingVision, an extension of its shopping and auction operations.
Yahoo and iFilm have also been the subject of merger talks, which neither side would discuss. But consider it proof, as Mr. Davis puts it, that Yahoo may end up as "the Microsoft, the toll booth everyone goes through" online.
If that's the case, then despite yet another lurch in iFilm's ever-changing business plan, it and the other partner sites may have made their best Hollywood deal yet, with a company 400 miles from Tinseltown. But don't count on iFilm's consumer-side portal play to remain on its ever-changing business plan much longer.