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Who's afraid of online video? Not Michael Eisner

At the Digital Content Newfronts event in New York, the former Disney chief preached a familiar gospel to advertisers: online video might not be a treasure trove yet, but it will be.

NEW YORK--As head of Web video studio Vuguru, longtime entertainment exec Michael Eisner has been on a sort of tent-revival tour for the past few years, preaching the gospel of Internet video. On Thursday, his audience was the ad industry, and he was there to tell them not to be fazed by disappointing revenues on Web video.

"I'm seeding what I think will be a future business," Eisner explained. He's been vocal in admitting that online video isn't a profitable business yet. But it will be, he emphasized, and he wanted to position himself to be first in line when the money starts rolling in. "You have an option when you leave 40 years of a public company. You can continue being a dyspeptic, aging, wheelchaired, drooling, irrelevant executive, or you can put the word 'new' next to you."

Eisner was speaking at the Digital Content Newfront, ad group Digitas' take on the traditional television upfront event. The event, part of Internet Week New York, showcased online video content companies like 60 Frames, MySpaceTV, MTV New Media, Generate, Next New Networks, and Eisner's own Vuguru. In the audience were loads of ad-industry types; Eisner's goal was to convince them that video on the Web is worth the investment.

Michael Eisner
Michael Eisner

"The advertisers are recognizing how big the audience can be," Eisner said. "My interest is getting in there before they explode."

He was interviewed on stage by Dmitry Shapiro, founder of Veoh Networks, the online video site in which Eisner is an investor. And Eisner affirmed to the advertisers and marketers present that despite its reputation as a cesspool of dogs on skateboards and cats on treadmills, new media isn't all that new. "(Online video) has different dynamics in the technology, but it doesn't have different dynamics in the terms of story. The same rules from cavemen to obviously the Greeks and Shakespeare...the idea of the story as we all learn in high school English and theater, those really will prevail in new media."

Vuguru debuted in 2007 with Prom Queen, a scripted series syndicated on MySpaceTV, YouTube, Veoh, and a whole host of other platforms. Eisner has been open about the fact that financially, it was not a success. But he's kept going, with several new Veoh series including the Monkees-like The All-For-Nots, and a new comedy series centered on classic trading card brand Topps, which Eisner acquired. Called Back On Topps, it cast two comedians as fictional heirs to the Topps fortune and chronicles their run-ins with famous sports stars.

Creating promotional series is one option for brands to make a few bucks off online video, Eisner explained. So is sponsorship. "Almost everybody working inside is nervous that you're going to damage the brand," he warned. "You have to take risks, and you have to know the line which you cannot go over."

"The advertisers are recognizing how big the audience can be. My interest is getting in there before they explode."
--Michael Eisner

He also suggested that advertisers could build particularly creative advertising campaigns that tie specifically into the shows they're placed with, finding a middle ground between product placement and traditional commercials. "The commercials that I believe could follow (videos) as long as they're short, ten seconds...somehow had the ambiance of the same environment, the same story. The audience would get the point that the brand was somehow involved in the creative process," he described. "So that would be not product integration and not a straight dropping-in of a ten-second spot, but a sensitivity to the environment. That's something that's never been done before."

Eisner reiterated that big shifts in media historically don't rake in money at first. He compared the rise of online video to cable television versus broadcast: "The highest-quality programming is now on cable," he said, adding that basic cable is "no longer an ancillary market or a rerun market. The dollars are enough that it's a primary market."

He couldn't stress enough that advertisers should gear up and get ready to make big investments in the field. "It's just beginning to happen. We now call 'new media' obviously broadband, Internet, whatever, but there was a time that new media was home video. There was a time that new media was TV. There was a time that new media was motion pictures in the nickelodeon theater."

Eisner took a moment to ask Shapiro about what's next at Veoh, which just raised another round of venture funding. "I think the key is discovery," Shapiro replied. "In a world of 400 cable channels it's hard to find something good to watch. In a world of a million shows it's practically impossible."