60Frames Entertainment is suspending operations due to a lack of funding, according to a source close to the company.
The UTA-backed firm, one of the first to specialize in the creation and financing of video programming for the Internet, is laying off its seven remaining employees. 60Frames already dropped six other staffers last October.
A spokeswoman for 60Frames declined comment.
Oddly enough, the fatal flaw for 60Frames was not a shortage of opportunities. The firm had sold as many webisodes as any of its competitors to top buyers like TheWB.com, Sony’s Crackle and FunnyOrDie. 60Frames had even managed to sell one Web project, The Carpet Bros., as a TV pilot to HBO with former Saturday Night Live writer Jeff Piedmont attached.
Sources familiar with the company’s travails pinned the problem on the sluggish nature of dealmaking online and on bad timing on the fundraising front. The company was thwarted in its attempt to secure a second round of financing just as the U.S. economy soured.
60Frames execs are exploring options to resuscitate the company at some point, though it is unlikely in a depressed marketplace.
The shuttering of 60Frames will likely send a shudder through the nascent digital-entertainment category, which is struggling to produce meaningful revenues as ad dollars and venture capital dry up in a tough economy. Remaining players include Generate, Next New Networks, Deca and Worldwide Biggies.
But 60Frames isn’t the first in the category to go. A similar digital entertainment venture, ManiaTV, shut down in March following its own round of layoffs last October.
Launched with support from UTA and next-gen ad-agency Spot Runner in July 2007, 60Frames was started with $3.5 million in funding from Tudor Investment Corp., the Pilot Group and unspecified individuals. At the time of 60Frames’ closing, UTA had no active involvement in the company but retained a small minority position and funneled some its talent into the 60Frames projects.
Led by former UTA agent Brent Weinstein, the firm boasted association with established talent ranging from Oscar-winning filmmakers Joel and Ethan Coen to Oz creator Tom Fontana.
60Frames intended to produce as many as 50 short-form series, and has released over 30 series thus far. 60Frames struck a deal last year with NBC Universal Digital Studio to supply a slate of original series that would get greenlighted once a sponsor was attached.
But nothing materialized from the pact because advertisers have been gun-shy about experimental programming these days.
The WB.com recently picked up 60Frames’ Blood Cell, an online horror series from 60Frames. The 18-webisode series was to feature Jessica Rose, best known for the 2006 Internet sensation that made LonelyGirl15 a household name. A second project, Lily’s Tomb, was also in the hopper at TheWB.com.