IP Democracy: Talent Is Gaining Upper Hand on the Web

The Internet is the great equalizer. People with good ideas and the wherewithal to back them up can, for a few bucks and a lot of sweat equity, create a franchise and a business for themselves.

Hollywood, it seems, is getting wise to this dream (which, like most dreams, is more difficult to pull off in reality) and at least one Hollywood powerhouse, Viacom, is willing to share revenues with the talented team of Matt Stone and Trey Parker rather than risk the “South Park” creators setting up their own shop on the web.

As part of a new package deal that gives the innovative animators a greater share in revenues and profits from all outlets, Viacom has agreed to create a new web site, South Park Studios, that will be an incubator for new web applications featuring the iconic South Park characters and will serve as a distribution hub for South Park-related videos, applications and new services.

But that’s not necessarily the groundbreaking part, although the fact that “South Park” gets it own destination is yet another indication that brand names and not corporate ownership wield the most power on the web. The game-changing part of the deal is that Stone and Parker will get 50% of all ad revenue, an unthinkable concept in the TV industry, where talent has had to resort (think Seinfeld and the cast of “Friends”) to threatened no-shows to reap more profits from their labors.

As MTV Networks President Doug Herzog notes, the low barrier to entry on the Internet just invites big-name talent to jump ship — and the studios had better sweeten their offers or else.

“The landscape has shifted dramatically,” Mr. Herzog said. “The way of the Web seems to be, there’s a very low barrier to entry, so you don’t need, necessarily, a major media company to be in business, or a movie studio, or whatever it is — you just need to be able to set up shop and go. You’re seeing a lot of guys doing this, funnyordie.com being the best example.” (Funnyordie.com was started this year by the comic actor Will Ferrell and his production partner, Adam McKay.)

Admittedly Stone and Parker have the swack to demand such revenue splits, while up-and-coming creative types probably still have to settle for what they can get. But the balance of power in the entertainment business is no doubt shifting away from the big studios and networks and toward those who can create.

Posted by Cynthia Brumfield on August 27, 2007 9:38 AM to IP Democracy