Lonelygirl15 Creators Grab $5 Million
The minds behind the smash made-for-the-Web series lonelygirl15 and, more recently, KateModern, have formed EQAL (a la "equal"), a web video content production company with Series A backing of $5 million.
Spark Capital, which includes names like Conrad Riggs, Ron Conway, Marc Andreesen and George Harik, leads the way in funding.
Founders Miles Beckett and Greg Goodfried cite the 150 million views of their web video creations as the foundation for forming EQAL, which they’ve dubbed as a "social entertainment company." The concept involves entwining online social networks with interactive content.
From their About Us page:
"We believe that the community is just as important as the content we create. With this as our blueprint, we construct interactive shows that transform passive viewers into active participants. Our shows entertain and enlighten, driving discussion and encouraging viewers and participants to immerse themselves in a shared entertainment experience."
Lonelygirl15 is the most recognizable example of social entertainment success. "Bree," a character outed as a character in 2006, was played by Jessica Rose, who was a bit of an online sensation. Rose has parlayed that success into another, currently taking on the role of Tina in a recently debuted movie called Blood Cell.
That Beckett and Goodfried secured funding for their company is significant because venture capitalists are still at odds about where the return on investment most likely lies: in content or networks.
In an interesting dialog relayed by NewTeeVee last November, ex-Sony executive Dennis Miller argues with other investors about business models. "If the studio was such a great business they would not be offloading the cost of making those films," said Miller. "The net return on a film is 4 or 5 percent. The only reason the studios make those is because they own the entire food chain, including television distribution.”
$5 million thrown toward a content company and not an entire online distribution pipeline is a nice vote of confidence for great content.