Greg Goodfried, Offline

NEW YORK Greg Goodfried, a former corporate lawyer, banded together last spring with Miles Beckett, a plastic surgeon unhappy in his job, and Mesh Flinders, an aspiring screenwriter, to create YouTube sensation LonelyGirl15, ostensibly a Webcam diary from a home-schooled teen.

While revealed in August to be a work of fiction, it remains a bona fide hit, drawing as many as 900,000 views per episode. The creators are spinning off a new Web series, KateModern, on both LG15.com and up-and-coming social network Bebo. Goodfried, 28, talks about why YouTube should give LonelyGirl15’s creators a cut of ad revenue, and more.

Q: Were you guys surprised at how popular LonelyGirl15 became?
A: Of course. We did think it was a very good idea. We knew that Internet video [would] explode, we knew that YouTube [would] be in the forefront of that, and we knew no one else was doing anything like this. It was a simple idea, but we thought it was a pretty good one. In terms of the exposure and the popularity of it, we couldn’t in our wildest dreams have predicted that.

Did you think it would fizzle after people found out LonelyGirl15 was fictional?
I was confident that it wasn’t going to. I know that 48 people didn’t crash on a plane in the middle of the Pacific, but I watch Lost every Wednesday. If you give people a good story, they’ll come back and watch it. They have an investment. Also, 95 percent of people watching this through August were pretty convinced it was fake.

What has the experience taught you about interactive storytelling?
We call LonelyGirl an interactive ongoing drama. What we’ve learned is people on the Internet who are consuming content are a foot from the screen and they’ve got a hand on the mouse, a hand on the keyboard. You have to allow people access to your content and make it their own. We’ll do something where Daniel [the boyfriend of Bree, whose fictional Web diary is being taped] will get a package and inside is a Flash drive that is password protected. On top of the package will be a postcard with a riddle. We’ll have Daniel turn to the camera and say, “Will you guys help me solve the riddle?” The fans go to our Web site, get together in chat rooms and collectively solve the riddle. In the next video, Daniel will say, “Hey, Tim in Montgomery, Ala., thank you for solving the riddle.” That’s just something you can’t do in TV. We literally let the fans reach out to our characters and the characters reach back to fans.

Is this a story of aspiring filmmakers using the Web to angle for a production deal in traditional media?
This is not that story. We met with a lot of TV executives and actually had some offers, but we said no. We really like telling stories on the Internet. By far the best part for me is when we click that upload button and we get to see the intensity of our fans dissecting every single thing we do, sending comments to the characters, making their own videos. You can’t do that on TV.

What’s the advantage of advertising on a Webisode?
Brands are going to realize that you can reach people on the Internet who are more passionate, more investigative … and you actually have the ability to convert a sale. The technology is already out there where if one of the characters is wearing a jacket you like, you can click it to get it from bananarepublic.com.

Do you think the idea of pre-roll ads appeals to this kind of audience?
I personally don’t like pre-roll ads. If there’s a two- or three-second curtain that says, “LonelyGirl15 brought to you by Target,” I don’t care about that. When I’m on ESPN or CNN.com and I want to see a news story and I get hit with a 10-second pre-roll, nine out of 10 times I will not see the story.

Is there room for a return to the Texaco Theater model of sponsorship?
I think that’s going to be part of this equation. The key is being non-intrusive. Pre-rolls are intrusive. There’s really cool technologies out there where you can actually watch the video with a button you click … the video pauses, you enter your e-mail address then click “resume” and the video plays again.

What about product placement?
The best part of our show is we treat the characters like real people, so they have to use real brands. If Bree held up a generic water bottle, it would be bizarre. We’ve actually had the other problem in which we had an episode for Thanksgiving where the characters had a low-budget picnic. They bought turkey jerky, potato chips and cranberry juice. It would have been awesome if we could have actually had those brands in there. The [Hershey’s] Ice Breakers Sours [product placement, the Webisodes’ first ad deal] was a one-time thing. It had to be because we can’t have our characters chew gum in every episode. It doesn’t make sense. But take a product like a car or a mobile phone or whatever people use on a daily basis … we can start talking about longer-term things if we had brands that really wanted to get involved and everyone put their creative hats on.

Do you think you’ll get a revenue share from YouTube when they figure out some kind of ad model?
I would hope. We have very popular videos that have zero copyright-infringing material. If YouTube is looking to show the world they can survive without Viacom clips, I think LonelyGirl15 is the perfect case study.

So how do you turn this into a business?
The plan was to do the scenes on YouTube for like three to five months … then raise a little money to shoot an independent film. We had zero clues that the Internet could sustain an audience of this size. We also realized that [the film] would be physically impossible to do [the same time as the] YouTube episodes. Then we started to get hundreds of thousands of people coming back every single day [and we understood] that this is a TV model not a movie model. We realized we had enough of a fan base to do brand integration, maybe spin off shows. Mobile is a huge [potential] market right now, and our videos being short, being really tight shots, they play elegantly on handheld devices.