Coming Soon From Paramount Pictures: Digital Feature Films

Division Inks Exclusive Deal With Hollywood Producers for Full-Length Web Content

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LOS ANGELES (AdAge.com) -- In a first-of-its-kind deal for the division, Paramount Pictures' Paramount Digital Entertainment is entering into an exclusive partnership with two Hollywood execs to create and produce feature-length films for distribution online and through other digital media.

The two producers, Alexandra Milchan and David van Eyssen, have pedigrees and track records suited to their new venture. Ms. Milchan, the daughter of well-known uber-producer Arnon Milchan, produced the recent Hollywood features "Street Kings," "Mirrors" and "Righteous Kill," while Mr. van Eyssen helped produce BMW Films, a 2001 interactive project that hired Hollywood directors such as Guy Ritchie and John Woo to create short online films that featured the German automaker's vehicles.

However, unlike the well-known BMW short films, Mr. van Eyssen and Ms. Milchan's films will be more than just webisodes, said Paramount Digital President Thomas Lesinski.

'Lots of people experimenting'
"There's lots of people experimenting with the length of web content," Mr. Lesinski said. "I won't say people who want to do short films [online] are going to fail. But when you think about Hulu and Joost, millions of people are watching full-length episodic television online."

Mr. Lesinski has been experimenting too, since February 2006, when he left his job as head of Paramount's home-video operations to create Paramount Digital, which operates separately from the home-entertainment group. Last December Mr. Lesinski released "Jackass 2.5" online, making it the first broadband movie ever distributed by a major studio. (Though technically a feature film, it was not all-new: It combined previously unreleased footage from "Jackass Number Two" with a smattering of new content.)

But the "2.5" release did provide lessons about releasing the features Ms. Milchan and Mr. van Eyssen have been hired to make.

"What we learned was that consumers pick the business model they liked," he said. "We were surprised that, initially, people paid for it more than watched it for free. They're very loyal to how they consume content."

Maybe, but so very few of them are paying to consume any video content online so far.

According to a report on consumer video purchases issued by NPD Group last week, consumers last year spent 41% of money budgeted for video entertainment on DVD purchases of theatrical releases and 29% on DVD rentals; only 0.5% was spent on renting or purchasing TV shows or movies off the web.

Available in many forms
As a result, Paramount Digital's features will be offered in many forms over the course of their release: free, sponsor-supported, subscription and via paid download.

But while the Interactive Advertising Bureau reported online advertising revenue reached $5.8 billion for the first quarter of 2008, an 18.2% increase over the same period in 2007, Mr. Lesinski cautioned that traditional commercial advertising wouldn't be appropriate to an online cinematic experience.

"There'll be some form of sponsorship, though not necessarily commercials," he said, adding that the digital features would be "heavily driven by integrated products."

Ms. Michan spent 13 years at her father's mini-studio, New Regency, where she worked as a liaison with consumer brands seeking integration in Regency pictures, before turning to producing films herself.

The new Milchan/van Eyssen venture will also work in conjunction with Angelo Moratti and Massimo Redaelli, formerly of IMG, to develop global brand relationships in the fashion and lifestyle categories for the company's upcoming slate.
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