We’re seeing a lot of digital entertainment startups these days, noted the New York Times in an article this weekend, but don’t expect many of them to become the next Hulu or Netflix.
“The problem is the same as in every gold rush: the gold is easier to see than to mine,” the Times quoted Lindsay Conner, a lawyer at Manatt, Phelps & Phillips who specializes in entertainment finance, as saying.
The article mentions a few recent startup announcements by name, including i-Trailers, which works with movie advertising online and on mobile devices; Diva Mobile, a cross-platform video-on-demand service; and SulSet.com, which offers behind-the-scenes videos from movie sets. While SulSet began as a fee site, the story notes, it ran into trouble with the Screen Actors Guild and had to offer its videos for free.
The reason for the rush of startups is that advertising revenue is returning and technological changes are making online video easier for people to access, even from mobile devices. Everyone can see that streaming high-resolution video is the next big wave for the Internet, and many smaller players are trying to craft their own angle on it, to ride that wave.
Those companies often aren’t backed by serious venture capital, however, or staffed by experienced executives. While they try to sell themselves as digital revolutionaries, many will end up as forgotten footnotes before the year is through.