At the beginning of the year 2000, professionals and fans alike were joyous about the seemingly endless possibilities for animation on the Internet. Celebrity deals and big dollars were in the headlines regularly. New entertainment firms sprung up left and right trying to make waves in the new medium. However, by the end of the year, eyes shifted from IPOs to business plans that just weren't working. And like the pog, Web entertainment sites were disappearing faster than the dinosaurs. So what happened to the promised land?

As Stubby finds while reviewing Planet of the Apes, role reversals can be tough to deal with! © 2001 Mondo Media.

There are many culprits in the plummet of Internet entertainment. The quick blame has been put on the ad market, which pulled dollars out as stock markets fell. Technology had been the "plastics" of the new millennium, but now it's a roller coaster very few people want to ride for any extended period of time. As Douglas Kay, president of Mondo Media, explains, there was huge pressure in 2000 to expand fast so your company would not be left behind. This strategy proved to be one of the key blows to many hopeful companies because they were spending money and creating content with no concrete way of making the money back. Once that became a reality and backers started getting major jitters during second and third rounds of financing, everybody wanted to take their hot Internet properties off-line where the money was. However, that plan proved as easy as selling pilot television series. Entrepreneur's Web wonders weren't the cat's meow like many creators hoped they would be in the eyes of off-line decision-makers. As a result, many companies like Anteye closed. Others like Icebox shut down and now are operating bare bones in an attempt to sell their assets. In the case of Stan Lee Media, lawsuits have sprung up regarding misallocated funds and stock manipulation. Even major players like AtomShockwave were forced to lay-off the majority of their staff in an effort to cool the capital burn rate of their parent company. Even this Web savvy writer has found himself in the unemployment line searching for a new home. So now that the holy land has turned into a holy mess, what's next? I sat down with four of the key players in the field -- Hypnotic, Brilliant Digital Entertainment, Mondo Media and AtomShockwave -- to see what direction they are going now that the high hopes are grounded and Internet businesses need to get down to just that -- business.

Rick & Steve: The Happiest Gay Couple In All The World brings Lego to life! © Hypnotic.

Hypnotized By More Than The Web
When I talked to Jeremy Bernard, president and CEO of Hypnotic, calling his company an Internet company was like calling him a foul name! All jokes aside, his company started moving out of the Internet exhibition business almost a year and a half ago. He states straight out, "There is no money to be made in Internet exhibition." Bernard describes Hypnotic as an entertainment marketing and services company. They acquire content from talented filmmakers from around the globe and license it in various mediums including the Web.

With most of their current work being done in traditional media, I asked how the company's recent merger with Nibblebox, a network of college-based Internet content sites, fits into the overall strategy. Bernard said the Web is a way of reaching and promoting emerging filmmakers. Nibblebox gave Hypnotic a chance to contact a younger audience and open doors to acquiring content from emerging artists. "Short films are a visual resume and not a passing fad," Bernard says. It's this visual resume idea that attracts licenses and larger deals. Currently, Hypnotic and one of its filmmakers are producing a live-action feature in association with Vivendi Universal, who is one of the major backers of the company.