The Icebox Broke

A cardboard Mr. Wong, the main character of one of Icebox's webisodes, is for sale on eBay. The entrepreneurial spirit that placed the cutout on the auction site described it as: "Straight from the offices of Icebox.com, the company that revolutionized entertainment on the Internet but still fell victim to the dot-com collapse, this life-size standup, the only one of its kind, is the company's true mascot."

But even as Icebox closes and one more name is added to the list of prominent failures that begins with DEN and goes on and on, several companies are breaking even, turning a profit or, at least, successfully acquiring more funding from venture capitalists.

Bullseye Art (www.bullseyeart.com), for example, has divided itself into a production company, Bea Studios, and its animation studio, Bullseye Art. Bea Studios provides a steady revenue stream by offering Bullseye's creative talents as work-for-hire.

Bullseye Art has had commercial successes. The company created Phish's First Tube video, appearing on shockwave.com and developed Makin' Moves, a Flash animation series for HBO's urban portal volume.com. Bullseye has sold its Miss Muffy show to an as-yet-undisclosed television network, and will be producing 22-minute segments.

Mondo Media (www.mondomedia.com) also recently closed another successful round of funding for $17 million led by SBVC and Venturepark. Douglas Kay, president of Mondo Media, believes that his company was able to secure more funding and will eventually reach profitability due to its syndication-central business model.

"It is quite a challenge to develop a single (animation) site from scratch and get enough traction to make it profitable," said Kay. It is for this reason that Mondo Media has sought to syndicate its content far-and-wide, all over the Web since its inception in July of 1998.

Perhaps the fact that, as of this writing, not a single soul has met the minimum $250 bid for the Mr.Wong cutout on eBay, that Icebox.com's lasting legacy and current popularity still remain in question. In fact, the consensus among the animation community seems to be an utter lack of surprise. Not that anybody is happy about Icebox's demise, but apparently its office space - which one animator describes as "the size of an airplane hanger" - spoke volumes about their high aspirations.

Icebox was known for its big name television writers. The site was co-founded by Steve Stanford and Rob LaZebnik, a co-producer of "The Simpsons," and John Collier, co-executive producer of "King of the Hill."

"They were paying TV people what TV people make before there was a revenue stream," said Josh Kimberg, founder and chief creative officer at Bullseye. Bullseye animated the first three shorts in Icebox's series, including "Senior House," among their other credits.

Icebox as incubator

To Icebox's credit, it never did believe that Web advertising would work as its sole source of revenue. After Icebox's first successful deal to sell the concept behind the animation short "Starship Regulars" to Showtime for development as a live-action feature, Steve Stanford, Icebox's CEO, was quoted as saying: "Icebox is developing the foremost destination for original entertainment on the Internet. At the same time, Icebox also serves a highly efficient way of incubating new concepts that have the ability to migrate to television or film. This deal underscores the viability of our business model."

It is interesting to note, though, that the production of the Showtime series as a live-action feature limited Icebox's ability to garner revenue from producing the animation. Certain Flash animation "interstitials" were created for the Showtime network and sho.com, but they apparently didn't provide a stellar revenue stream.

On the other hand, Mondo Media's strategy focuses almost exclusively on Web syndication, although Kay states that the company is not adverse to selling its concepts to television once they have been thoroughly proven by mass audience reception. But Kay points out that "[television] is not the most profitable endeavor for everybody. You have to have that extra something special."

Icebox claims to have spent $14.3 million since its inception as an incubated company in January 2000, although the site was officially launched in mid-June of 2000. According to animators that created contract work for the site, though, payment slowed as early as November with full payment still not being received in many cases.

Layoffs also indicated the impending financial trouble. Icebox laid off half of its staff — about 50 people in November — stating that they would outsource more production. But more layoffs followed in January, leaving nothing more than a skeleton staff while the company searched for funding.

"You can't buy your way into an industry. Things need to grow organically," stated Josh Kimberg, founder and chief creative officer at Bullseye Art. Kimberg also added that his company was at breakeven, with its 20 employees. "But I'm not rich," Kimberg adds.

Bullseye Art has also applied for a patent for its system of creating broadcast quality animations from the Flash program. Kimberg believes that, using digital technology, much of the traditional animation work that has been outsourced to studios in Asia, and other parts of the world with lower labor costs, can be inexpensively produced in the United States.

The meltdown of Icebox may also provide an opportunity for animators to draw hardcore fan traffic to their own sites that are created mostly for the fun of it. "Maybe now the media will focus more attention on the plethora of indie entertainment sites who are all doing just fine," said Bob Cesca, the creator of www.campchaos.com. "This is simply another indicator that millions of dollars and celebrity names aren't recipes for longevity."

In the end, Kimberg sums it up best when he says, "If things don't suck, then they're valuable."