Fox Digi-Studio Giga 15 Positions Itself to Incubate TV Breakouts

December 7, 2009 – It’s one of the unanswered questions of the new media revolution: What are the odds against a Web show successfully making the leap to television?

No one knows, but plenty of Hollywood players are still trying, including the scrappy Web studio Fox 15 Gigs. The “digital incubator” launched quietly last summer as part of Fox Television Studios, the cable studio best known for USA Network’s “Burn Notice.” The modus operandi of 15 Gigs is to use the Web as an inexpensive proving ground for concepts, ideas and talent. The better ones might graduate to TV.

But launching a digital studio is scary given the carnage of the past year – flashy, venture-backed shops like RipeTV, 60 Frames and Mania TV went under, though Mania TV has resurfaced in a pared-down form. So the digital survivors and the new ones, like 15 Gigs, are implementing stricter rules about content and spending.

That’s how 15 Gigs differs from predecessors, such as Disney-ABC’s Stage 9 that launched two years ago and laid off most staffers last year after its lackluster lineup of shows didn’t take off. By contrast, 15 Gigs isn’t going after Web hits. Its goal is simple – to use the Web to nurture ideas cheaply and move the best ones to TV. As an example, 15 Gigs is currently pitching its successful online series “When Ninjas Attack” as a Wipe-Out style game show.

“We can produce a Web series cheaply, and once you get it on tape you can see if you even want to do the rest of the series,” said Ilsa Berg, director of programming at Fox Television Studios. “It’s not that different from what we do as a studio every day. You need to make things in a cost-efficient way.”

That includes looping in advertisers. 15 Gigs is currently pursuing branded entertainment deals and expects to ink advertiser deals by year-end. Indeed, digital studios that want to stay in business need to make room for advertisers to play an active role in the shape of a show, said Alan Schulman, executive creative director for The Digital Innovations Group creative agency.

Finding the right partners will also be a marker of success. As part of its incubation approach, Fox 15 Gigs struck a development deal with Web producers Black20. The creative shop is best known for edgy comedic videos as well as regular Web series like “The Middle Show.” Collectively, Black20’s videos have earned 60 million views. Now, the Web creators are working with 15 Gigs to test ideas for possible TV development.

Black20 is a good fit for the ultra low-cost model at 15 Gigs. With just nine employees in Queens and only $500,000 in angel funding, Black20 knows how to produce on a shoestring. Black20 also relies on multiple revenue streams, earning money by producing promos for cable networks, creating video series for portals like IGN.com and via its own ad deals with Colgate, Loopt and others.

15 Gigs also has another Black20-style development deal in the works and is aiming to be the go-to development studio for creative talent that knows how to leverage the Web.

This “digital incubation” model has proven successful with others such as multimedia studio Electric Farm Entertainment, which recently produced the hit Web show “Valemont.”

“Introducing a franchise through low-cost digital platforms with the intent to slowly grow an audience and, in success, grow the franchise up the media food chain makes sense to me – it’s the model Electric Farm and MTV used on ‘Valemont,’ which is now in consideration for becoming an on-air series,” said Brent Friedman, one of the founders of Electric Farm.

But digital studios face inherent challenges, and that’s why it’s smart to own the distribution like a Break Media does. The company purchased digital studio HBO Labs earlier this year, but its core business is the distribution network it owns with 60 million unique visitors worldwide, led by Break.com. With both a studio and a destination, Break is able to license content and guarantee to advertisers their ads will get seen, said Break Media CEO Keith Richman.

Other digital studios like RedLever benefit from being paired with a distribution partner. RedLever is a studio that’s part of the Adconion.TV ad network and therefore has access to its 400 million monthly uniques reached across that network, said Richard Shore, chief operating office of RedLever.

“Success for RedLever comes when we combine our ability to produce quality content for our clients and offer the scalable and targeted distribution over the Adconion.TV platform,” he said.

15 Gigs videos are distributed on Hulu and YouTube, as well as on MySpace and FunnyorDie in many cases. But the digi-studio is platform agnostic so its content can be pitched and sold to both its sister divisions, like the Fox networks, as well as Web portals and other places.