Movie Studios Expand Into Virtual Web Worlds


NEW YORK With fewer bodies in movie theaters and consumers migrating en masse to digital formats, Hollywood studios are understandably keen to reach their market in new, hopefully more effective ways. Although virtual worlds have a spotty record so far, some studios clearly see great potential in these environments for both promotion and distribution of their output.

In April, Viacom's Paramount Digital Entertainment signed a partnership agreement with Makena Technologies, making thousands of movie clips from the Paramount movie library available on, an online virtual world. Visitors who purchase the clips can use them to communicate with others by having their avatar "speak" lines from movies while the actual clip plays in a small window. Links allow users to purchase DVDs of the featured movies.

Sony and Warner Bros. have both struck deals with Gaia Online, a hybrid virtual world and social network. The deals make available selected television programs from Sony's library and films from the Warner Bros. archive. The agreements also saw Sony and Warner Bros. put some money into Gaia. A representative from Time Warner, the parent of Warner Bros., said the move falls in line with company strategy: to invest in companies with "great potential."

Lewis Henderson, svp of the digital media business at the William Morris Agency, said, "Film companies are seeing that these virtual worlds are places that young people go to and spend a lot of time in. They are attractive as new networks, new destinations, new eyeballs for them."

For Derek Broes, svp of the new business group at Paramount Digital Entertainment, assessing the virtual landscape wasn't difficult.

"We don't look at it as how many people are there. We look at them as interesting growth platforms -- and we feel that there's promise in it. You have to get involved, you have to explore and invest and go where the consumer is. We can no longer sit back and say we are going to put our content here and expect the consumer to follow," he said.

A Sony representative declined to comment.

But, of course, cashing in on such efforts is always a priority. According to Dan Taylor, analyst at the Yankee Group, film companies are trying to determine if these worlds may be considered "a primary revenue stream, secondary or if it's direct marketing."

The emphasis is on creating unique experiences intended to spur users to see the films being promoted or to get them to buy the DVDs on offer.

"What the movie studios are doing is a natural first step," said Sibley Verbeck, CEO of The Electric Sheep Company, a creator of Web-enabled social and virtual world experiences. "[They haven't set up a store] where you go out and pick a DVD. That would be a silly translation of a real-world experience. You have to meld into the virtual world."

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