Will Web soaps survive?

The turmoil within American Cybercast could have been lifted directly from the scripts of the cybersoaps it produces.

The recent cash crunch at the owner of Web soap opera The Spot offered some high drama this week when a desperate worker disclosed the company's financial problems on a Web bulletin board. After only a few hours, it was abruptly removed by managers clearly not anxious to air the gory details.

Fun in the sun with the cast of The Spot

But the incident was far from ordinary internal company gossip: The troubles at The Spot, one of the highest-profile soaps on the Web, are part of a subplot that could mean curtains for the budding industry. Indeed, the shows, dubbed "Web-sodics" by insiders, face a future as uncertain as a soap star's next affair.

Once touted as the perfect marriage of television and the Internet, cybersoaps promised to provide all the thrills of traditional TV soap operas--alien abduction, marital betrayal, family secrets--with the interactivity and community that only the Web could provide. But despite promises of glory, Web soaps have been unable to make ends meet.

"Kids are cool, but advertisers want middle-class people who can pay for things," said Jon Katz, media critic for Wired Ventures. "Media works when middle-class people have a reason for using it. This has been a bitter pill for the Web culture to swallow."

Unlike TV soaps, Web-sodics have appealed to twenty-somethings with little disposable income, not exactly prime targets for potential advertisers. And if the 100-plus soaps on the Web are not able to generate enough traffic to stand on their own, they will increasingly have to be produced with counterparts on television and even films to survive.

In some cases, that is already happening. Scott Zakarin, the original Spot creator who has since left, is marketing his new online soap, Grape Jam, to five cable companies.

The Spot, which records the lives of a Southern California beach crowd, has had financial problems even with an impressive list of some of the biggest and best-known retailers that advertise in mass media, including Sony, Eastman Kodak, Apple Computer, Toyota, and Visa.

Other Web soaps have looked for alternative forms of revenue. The East Village, which focuses on the lives of an aspiring actress Eve Ramsay and her friends and enemies in a bohemian neighborhood of Manhattan, has begun marketing a CD of the show's soundtrack as well as official East Village T-shirts.

But like many Net ventures, the hype surrounding Web soaps has overshadowed the high risk of the business. Behind the gilded facades of Hollywood, this week's Cybercast incident offered a rare glimpse into the harsher reality of the entertainment industry, which has never been known for its patience.

Racy story lines are common--and popular

"This business is not an easy one, and we are doing the best we can," said Cybercast head of production Debbie Myers in her now-infamous bulletin board posting Monday. "No one has written the book on how to make a successful eposodic Internet show. We are lab. You try something and based on the audience response and page views, you make changes. You take risks and keep plugging away."

Then she added ominously: "If one folds, everyone takes a giant step backward."

The company would not comment on Myers's posting. Spokeswoman Kay Dangaard would only say only that "The Spot will not go down. It's outperforming every Web-sodic ten to one." She wouldn't comment about its other shows, Eon-4, The Pyramid, and Quick Fix.

At least one potential investor seems to believe in The Spot, however. "I'm responding to their cry for help," said creator Zakarin, who offered to buy the Web-sodic yesterday for an undisclosed sum. Zakarin, a veteran Hollywood film writer has a multimedia strategy for the soap: sell it as a television show, just as he and the other three original Spot writers are doing with Grape Jam.

"It's a franchise machine," he said of Grape Jam. "In a few weeks, we're pitching it to five major cable networks."

American Cybercast has also approached Paramount Digital Entertainment about a potential partnership, according to Joanie Kotick, a Paramount press coordinator.

Such intermedia marriages may prove the only answer to reducing the business risks of Web soaps.

Other companies are considering coupling Web shows with full-length feature films. This week, the creators of East Village (a content partner with Time Warner) formed Miscellaneous Films to "exploit the cross-media potential of film and the Internet."

Miscellaneous Films will produce a movie called Wedding, set in the same neighborhood where star Eve Ramsay and her friends live. The fictional Web characters will make a film with the same name online, providing cross-promotion for both media.

"We can build an audience in the new media realm and use it to develop an audience in more traditional mediums until the Web can stand on its own feet," said Charles Platkin, president of Miscellaneous Films.

"You have to have a multiplatform approach to exploiting the Web," agreed Edmond Sanctis, senior vice president and executive producer of NBC Interactive, which had originally considered the idea of creating an online soap. "We like the idea of using the [Internet] as a way to test concepts, but it didn't make sense to spend money to develop properties on the Web solely with hope that someday it would come around."

A sampling of soap fare

Starting from scratch was just too risky for NBC. What the network would be willing to do, however, is branch an existing TV show onto the Web.

Other networks have been equally hesitant about entering the cybersoap market without connecting it to on-air programming. Fox took a stab at a Web show with an online soap called Polaroid Place, featuring six characters working at an upscale coffeehouse and, of course, their myriad problems. As planned, the promotion ended after six weeks; Fox has yet to launch another show.

But the new multimedia business model may be unpopular with current Web soap viewers, who cling to both the alternative story lines and a unique sense of community that mainstream television would not and could not provide. (One popular East Village scene reads: "Sam came home and found Tabitha and Naomi fooling around in bed. He was baffled, but decided to join in.")

As Harry Zink, a highly involved Spot fan said today, "What would really happen is the show would be taken to a TV medium and the interactivity would be lost...If your prime product is based on live interaction and you put it on TV, you're reducing the value of the product in syndication because the interactivity is suddenly gone."

Internet Editor Jeff Pelline contributed to this report.