Initial clients include sister company Seagram Americas for a redesign and online advertising for its Captain Morgan Rum site (www.rum.com). (Parent company Seagram Co. owns 80% of Universal Studios, and Grey Interactive, New York, formerly handled the Captain Morgan Web site.) Universal will also be building a new site with a Web store for the Harvey Entertainment Co. (www.harvey.com), which owns the rights to comic characters like Casper and Richie Rich; and Stunt World, a new directory of professional stunt people.
"People are shocked when they hear it, but then they want a quote," said Lisa Crane, VP-sales and marketing for Universal Studios Online, Universal City, Calif.
Ms. Crane said this is a natural transition for Universal Online, considering it produces up to 100 promotional movie, video and pay-per-view Web sites a year, many ad-supported. It also runs the online Hollywood Backlot Store to sell Universal paraphernalia; conducts sweepstakes and real-time auctions; and oversees celebrity chat at Real Hollywood.com.
"We live and breathe the Internet," Ms. Crane said, and "We do it with internationally known brands."
Universal's Web production facility with a staff of 60 also makes it competitive price wise, she said.
For the Captain Morgan Rum site, Universal will develop creative, a marketing plan and buy online media.
Entertainment companies garnering agency work is not new. In 1992, Coca-Cola Co. caused a stir when it hired Creative Artists Agency, Beverly Hills, Calif., to create commercials. Web publishers commonly create ad minisites.
For instance, Warner Bros. Online co-produces a parents site for iVillage that's linked to Rosie O'Donnell's site (www.rosieo.com). But Jim Banister, VP-general manager for Warner Bros. Online, said it only creates sites that fit contextually with Warner Bros.'s content or are minisites for clients; it wouldn't want to be a Web agency of record.
"It's not our business," he said. "We're not a production house."
REACHING BEYOND ENTERTAINMENT
Yet how successful Universal will be depends on how many clients it can win outside the entertainment arena and sibling Seagram, said Drew Ianni, analyst, Jupiter Communications.
"I think it's an interesting play," Mr. Ianni said. "I don't think anyone debates their ability to create compelling content, but that doesn't mean that they necessarily understand branding in a new-media environment."
Will interactive agencies fear Universal stealing clients?
Jeff Minsky, partner/manager-interactive media at OgilvyOne, New York, worked with Universal on an IBM Corp. campaign, and said he thinks it's a good place for outsourcing production.
But he doubts Universal will threaten large agencies. "Full services agencies can provide a lot more value than whipping out Web pages," he said, adding, "I could see they'd be a threat to small boutiques."