It seems so long ago when there was an announcement every day about an Internet company starting up. It even seems long ago when there was an announcement every day about an Internet company folding. Today professionals in the entertainment industry, especially those who dived head first into the Web and failed, swear up and down that there isn’t any money to be made on the Internet. But don’t tell that to the major players who are still around and thriving.

Warner Bros. isn’t shying away from exploiting its properties on the Net. © Warner Bros.

Entertainment on the Web has grown a cult following, with independents and corporate congloms creating quality content. Newcomer Homestarrunner.com has slowly developed an avid fan base, including the likes of Buffy creator Joss Whedon. WB Online is taking submissions from aspiring artists in its Cartoon Monsoon section. David Gilcrest, director of communications, WB Online, said Warner Bros. is using “the Internet as a research tool" acquiring new projects to develop further for the Website with the possibility of crossing over to network and/or cable. Luxury carmaker BMW is driving loads of traffic to its BMWFilms site, which airs shorts featuring big stars helmed by big directors. The series is so popular that BMW has released a DVD compilation.

Sounds promising doesn’t it? Oh, what could have been, if POP didn’t burst. Or Icebox didn’t thaw. We can only speculate. However, we can learn from the old school players who are still around how they have found the key to success on the Internet. I talked with execs at AtomShockwave, Urban Entertainment and Mondo Media about business plans and making money. Folks that isn’t a typo, people are making money on the Internet.

I talked with Scott Roesche, vp of marketing at AtomShockwave, in 2001 when cutbacks and layoffs were still fresh in people’s minds. Back then the company’s business plan was moving toward integrated sponsored content, where shorts and games would feature product placement. At that time, they had recently launched as series of games containing Ford’s Focus. Currently, they are working on three or four more partnerships with the automaker. Today, the vet Net firm has a deal with Radio Shack, placing products in the game ZipZap Street Rally. Powered by music from the feature film, 2 Fast 2 Furious, the game allows players to race remote controlled Radio Shack cars. The game gets more than 100,000 plays per day.

Wallace & Gromit fans were willing to pay for Internet original content. © Aardman Animation. Courtesy of AtomShockwave.

In addition to sponsor-supported programs, AtomShockwave is finding success in areas where others have not – ads and subscriptions. A major part of the blame for the downfall of Internet business in 2000 was the pull out of the advertising industry. AtomShockwave boasts it is 100% sold out of spots for pre-play commercials. Where other online sites are getting $10 per impression for a banner ad, AtomFilms nets $25 for its TV-like ads that run before each short.

With subscriptions, Roesche says AtomFilms has racked in solid numbers for the Internet-only Wallace & Gromit’s Cracking Contraptions. The firm found that viewers were willing to pay for original Internet content that was previously branded in another medium and they couldn’t get anywhere else. The Shockwave side of the company has also discovered that gamers are more willing to pay for games than people looking for shorts. The Shockwave model is based on e-commerce. The site contains free versions of most of its games with a premium version with more levels and options to purchase.

Roesche says it was tough for a while, but the company weathered the storm by being “innovative in key areas and focused on key parts of the business.” Their current success strongly hinges on maintaining high traffic numbers. The combined sites have more than six million unique visitors a month. That’s impressive. In addition, AtomFilms continues to receive hundreds of submissions weekly from artists around the globe. Roesche says the company’s internal production remains minimal, nowhere close to where it was in 2000. Internally, the main production focus is on game development with the physical production outsourced. For instance, Sticky 3D submitted their game Hurtle Turtle, which gained a lot of popularity. Later Shockwave gave the job of creating the Radio Shack games to Sticky 3D. On the acquisition front, the company travels the world attending festivals to seek out new content.