Update: Firebrand to Close

NEW YORK Just six months after launching, commercials-as-content player Firebrand is closing.
The board of directors of the company, which used TV spots as programming online and on TV, this morning decided to end the effort after investors balked at pouring more money into it. Firebrand’s investors include NBC Universal, Microsoft and General Electric’s investment arm.
“We no longer have the backing of our strategic partners,” said company co-founder and chief creative officer Roman Vinoly. “We had an unsustainable cost structure in our distribution deal with Ion that we tried in vain for some months to renegotiate.”
Firebrand ran commercials at its Web site and through TV time bought on Ion Network, a cable channel that reaches about 95 million cable subscribers. Ion was also an investor in Firebrand. (Firebrand has averaged 135,000 viewers per episode on Ion.)
Firebrand launched with much fanfare during Advertising Week in September. The premise was that the much-maligned 30-second spot was not unwanted by consumers but just misplaced as an interruption to programming. Instead, Firebrand sought to lure in young viewers by doing for commercials what MTV did for music videos: turn the promotional material into content itself. (Adweek had a promotional relationship with the company.)
Firebrand set up a Web site and created a nightly hourly TV program to showcase the best of the best commercials. It recently ran a compendium of commercials featuring actors and directors nominated for Oscars. On its site, www.firebrand.com, users could choose among a library of well-received commercials from sponsors like Nike, Coca-Cola and Harley-Davidson.
Yet Firebrand failed to get much traction. It drew about 54,000 visitors last month, according to Nielsen Online. Quantcast, another measurement service, estimates only 33,000 people visited the site. Its TV ratings on the Ion cable network were unavailable.
Yet Vinoly said Firebrand’s woes could not be traced to consumer rejection of the idea of commercials as content. He pointed to average TV viewing time of 15 minutes and even more for visitors to the Web site. He expressed frustration at doubters the model would catch on with consumers who are already actively avoiding TV commercials.
“Isn’t it proven every Super Bowl and on lots of Web sites where people go?” he said. “Isn’t it proven by being one of the largest categories uploaded to YouTube? Is it that difficult to conceive that great creative created by great artists with all the money in the world could be compelling to consumers even though it’s trying to sell a product?”
Firebrand was not alone in pursuing a new model of turning commercials into sought-after content. Droga5 and production house Smuggler introduced Honeyshed, which rather than present TV commercials streams offbeat product infomercials with young, attractive hosts. Honeyshed, which launched in November, also does not attract enough traffic for Nielsen Online to measure. According to Quantcast, it drew less than 2,000 visitors last month. Another startup, Brightspot TV, offered users rewards for watching TV spots. It shut down last November after a little over a year of operation.
“I still believe that people have a relationship to brands that contribute to their identity as people, the same way someone is a Yankees or Mets fan, they’re an Adidas of Nike fan,” Vinoly said.

This story updates and replaces an item posted earlier today.