Rick DeMott talks with Gregg and Evan Spiridellis of JibJab Media and John Evershed of Mondo Media about how two firms vastly different during the dotcom bubble of 2000 have survived and now thrive on the Net.
Back in 2000, Mondo Media and JibJab Media couldnt have been more diverse. Mondo was the big syndication leader on the Web and JibJab was a fledgling start-up. Now in 2005, Mondo has a below-the-radar command on the Net and JibJab is riding high of the astonishing success of its short, This Land. Though they may have taken different paths to get to where they are today, the two firms have several things in common that are key to surviving and succeeding on the Internet.
Many of the Internet entrepreneurs of 2000 failed because they grew too big, too fast and were unable or unwilling to adapt to the quickly changing marketplace. However, both Mondo Media ceo/co-founder John Evershed and JibJab Media co-founders Gregg and Evan Spiridellis agree that the Internet entertainment industry was probably ahead of the technology.
Commenting on the changes, Evan Spiridellis said, People have high-speed connections now. More people are online than were in 1999/2000. I mean my mother-in-law has an iMac and broadband. Its finally reached that critical mass.
Many pundits claimed that part of the Internet downturn was due to advertisers pulling dollars from the Web. However, both Mondo and JibJab weathered the bumpy years by working on advertising campaigns, mainly for the Web. Now Internet advertising is going through a resurgence. Companies are using content to drive people to their sites, which brings people to their products whether it be cars or breath mints.
Advertising has recovered on the Internet, Evershed said. The demand for streaming media commercials is the highest it has ever been.
Likewise, television and film properties are using the Net more and more to help build and strengthen their offline brands. Online games, contests and special information keep fans hooked into a series or a film even when its not airing on TV or in a theater. This is no more evident than with children.
Evershed said, The Internet is where kids live. Its where they spend their time. Its not like were fighting an uphill battle; this is where kids are. I think well come to a point when Internet content is completely self-sustaining.
Mondo Media: The Bleeding Edge of the Net
Evershed and Deirdre OMalley formed Mondo Media in 1988 as an independent media company. The firm began creating CD-ROMs, such as Critical Path and The Daedalus Encounter. However, Evershed, who had worked on online content and advertising while with Chronicle Videotex, saw the potential for content distributed over the Web.
Evershed exec produced the first Mondo Mini Shows, which included The God and Devil Show, Like News and Thugs on Film. The executive helped pioneer the Internet syndication model that became a goal of many companies working on the Internet at the dawn of the 21st Century.
However, the dotcom crash virtually ended Net syndication. Mondo had to adjust and moved away from syndicating its content. But unlike other firms that tried to weather the storm by focusing on the sale of their properties to other mediums, Mondo Media stayed steady with the Internet as its base.
Evershed stresses that the first key to success on the Web is having a quality product. He sees the Internet as wonderful testing ground for a new property, because the initial launch costs are low and the direct connection with viewers makes it easier to choose what properties to push on a larger scale.
Once one has the content, producers must make it easy for people to encourage friends and family to visit the site. Then the firm can leverage the popularity of the series toward selling merchandise to its fan base. With Mondo, it first sold merchandise through its own store. Later, because of the buzz with kids that Mondo built, distribution and merchandising companies came to Mondo to license the property.
Evershed added, I cant tell you how many big deals were cinched because of the kids. Companies would take stuff home and say were thinking of doing something with the Happy Tree Friends and their kids would say, `the Happy Tree Friends rock. Or even better when the person comes in and says, `my kids already love the Happy Tree Friends when that happens you know you have a deal.
With 800,000 registered members to the Happy Tree Friends site, most of Mondos revenue is based around the property, which combines the cute and cuddly with the sick and twisted, attracting a wide audience across a vast demographic. The online shorts receive 15 million views per month. Evershed made the point of saying, Compare that to a Nielsen rating. Most cable shows pull less than a million households.
Simply, the more popular a brand is the more revenue it can generate from various areas. With more and more household around the world getting broadband services, Mondo has seen its profits in Europe equal to those in the States. In July 2003, Mondo had sold 10,000 units of Happy Tree Friends on DVD and video. Now the company has sold more than 350,000 DVDs at retail alone. Happy Tree Friends merchandising ranges from DVDs to toys to apparel and sells in retail markets around the globe.
But merchandising is not the only way Mondo makes money. On its site, Mondo still makes profits directly through its store as well as advertising via banner ads and streaming commercials linked to content. In addition, the company is generating licensing fees from its content airing on various MTV International stations. Happy Tree Friends is seen in 350 million households in Europe, Latin America and Asia. The property is even expanding to mobile technologies in Europe with deals for ringtones, Java games, wallpapers and downloadable shorts.
In regards to exploiting other properties, Evershed said, The pathway weve laid out with Happy Tree Friends is so successful that Im convinced you can introduce other properties into that model. [For the future], we just need to create more content to feed into this pipeline that we have built.
Evershed added, Two years ago it was more of a theory that you could do this, but with the success of Happy Tree Friends and some other properties out there, its not only a viable medium, but a really great business. I cant tell you how exciting its been seeing this thing come to fruition. Everybody took a pretty big gut punch and had to suffer through the idea that animation on the Internet was a joke. The truth is that its not. Its pretty amazing what you can do.
This Land Was Made for JibJab
Launched in Brooklyn, New York, in 1999 by brothers Gregg and Evan Spiridellis, JibJab Media began with the idea that with the Internet independent artists could create an animation brand. With the aid of Flash technology, it had become relatively easy to create a full motion, full sound cartoon and distribute it to the entire world. The company saw its first success with the political parody, Capital Ill, which skewered the 2000 U.S. presidential candidates George W. Bush and Al Gore. [Capital Ill made AWNs Ricks Picks Top Ten for 2000 along with Mondo Medias Like News.]
However, the dotcom bubble soon burst and many of the clients that JibJab had been working for were no longer in business. Many companies suffered from taking and burning through venture capital, but Gregg Spiridellis said that from the moment that JibJab opened its door they live in economic reality because they never received outside funding.
Originally they were financing their work through content licensing, but that was coming from the clients that were now bankrupt. JibJab had to find new ways to make money and turned to advertising where they created branded Internet campaigns for big corporations.
In addition, the brothers Spiridellis moved into merchandising with the creation of a talking doll based on their Nasty Santa property. Through the beauty of the Internet, JibJab found toy production companies in China that would create samples from an initial design concept. Once JibJab had the doll, they approached Spencer Gifts and pitched them the product. The leverage JibJab used was that 2.1 million people had viewed the Nasty Santa short the previous Christmas. Spencer carried the initial toy and now carries 13 items related to the Nasty Santa property during the holidays. Since then Urban Outfitters has joined in carrying the foul-mouthed Father Christmas line.
Up until 2004, most of JibJabs revenue was coming from advertising work. Then This Land hit big and JibJabs style of equal-opportunity satire became a recognized name brand. With this fame came new traditional licensing opportunities. Gregg Spiridellis said, Thats the business we want to be in creating original content that we license and market.
Like Mondo Media did to build traffic, JibJab makes it easy for people to send the shorts to friends. Word of mouth is how properties on the Net build their fan base. Then the key is to keep the fan base solid. JibJab kept in touch with their fans through their newsletter, which has doubled in subscriptions from 250,000 to more than 500,000 since the debut of This Land. Gregg Spiridellis said, Staying in touch directly with our fans is a critical thing for us from a business perspective, because our cartoons stream for free. But, if we release a DVD, its nice to be able to reach 500,000 people that might be interested in buying it.
Other ways JibJab generates revenue from the Internet is to sell banner ads, play commercials before the cartoons and offer paid downloads of the shorts in full resolution. Its store offers T-shirts and other merchandise based on JibJab content. Additionally, JibJab capitalized on the popularity of This Land with a DVD featuring the short as well as the Good To Be In D.C. cartoon.
The kind of brand that JibJab has cultivated has attracted film and television companies as well. Gregg Spiridellis said that JibJab is in active development on a television series and has several film offers. He looks at the Net as the place to develop the brand and within the next three years JibJab will be making most of its revenue through offline mediums.
When asked about what the future has in store for JibJab, Evan Spiridellis, said, Gregg and I sat down and thought the best thing we can do is go slow, not ramp-up too fast and make sure that the projects we do take on get the love and attention that they deserve. Our goal is not to do loads of content, but to make what we do great.
So How Do I Get a Piece of the Pie?
Both Mondo and JibJab show that the Internet is now a viable medium where good content can become a global brand. For aspiring Net artists, Evan Spiridellis said, Dont worry about distribution, but be aware of it. Focus on the content. And if you want it to reach a wide audience than you have to think about keeping your animation at a PG-13 rating.
Leading properties on the Net are pulling audience numbers that would put a television show on the front page of traditional entertainment magazines. But these companies are, for the most part, operating below-the-radar of the bigger mediums. Evershed feels that there is still a stigma associated with the Internet crash. However, the Web downturn has actually cleared the playing field and allowed companies to change and adapt without the spotlight on them.
In the future, Evershed sees people creating content again. I see some of the big players [like Yahoo!] swinging their sites back around to it The folks that stayed in the game will reap the rewards from it.
Rick DeMott is managing editor of Animation World Network. He recently contributed to a coffee table book on the history of animation for Flame Tree Publishing, entitled Animation Art. Previously, he served as the production coordinator for sound production house BadaBing BadaBoom Prods. and animation firm Perky Pickle Studios. Prior to that, he served as associate editor of AWN.