Google, "Family Guy" creator team up for ad-driven clips

July 3, 2008

LOS ANGELES — Google is experimenting with a new method of distributing original material on the Web, and some Hollywood film financiers are betting millions that the company will succeed.

Seth MacFarlane, the 34-year-old creator of “Family Guy.” In September, Seth MacFarlane, creator of “Family Guy” on television, will unveil a carefully guarded new project called “Seth MacFarlane’s Cavalcade of Cartoon Comedy.” Unlike “Family Guy,” which is broadcast on Fox, this animation series will appear exclusively on the Internet.

The innovative part involves the distribution plan. Google will syndicate the program using its AdSense advertising system to thousands of Web sites that are predetermined to be gathering spots for Mr. MacFarlane’s target audience, typically young men. Instead of placing a static ad on a Web page, Google will place a “Cavalcade” video clip. The content will also be distributed via YouTube.

Advertising will be incorporated into the clips in varying ways. In some cases, there will be “preroll” ads, which ask viewers to sit through a TV-style commercial before getting to the video. Some advertisers may opt for a banner to be placed at the bottom of the video clip or a simple “brought to you by” note at the beginning.

Mr. MacFarlane, who will receive a percentage of the ad revenue, has created a stable of new characters to star in the series, which will be served up in 50 two-minute episodes.

In an interview, he described the installments as “animated versions of the one-frame cartoons you might see in The New Yorker, only edgier.”

For a more substantial fee, Mr. MacFarlane has been working with advertisers to animate original commercials that will run with “Cavalcade.” Google and Mr. MacFarlane would not reveal any of the advertisers, but the two said that several deals are among the largest ever landed by AdSense, which went into business in 2003.

Google, which calls the distribution service the Google Content Network, until now has only dabbled in distributing original content. In May, it announced a deal with The Washington Post to distribute real estate listings from the newspaper’s Web site in a similar manner.

But the partnership with Mr. MacFarlane represents a bold step into the distribution business, one that, if successful, will surely send shock waves through the entertainment business. “Cavalcade” is not only from a high-profile Hollywood talent, but also carries a multimillion-dollar production price tag, by far the largest amount spent on original Internet content to date.

“We feel that we have recreated the mass media,” said Kim Malone Scott, director of sales and operations for AdSense.

Until now, budgets for original Webisodes have peaked in the low six figures because creators have not been able to figure out a business model that allows for higher spending. Either advertisers have not wanted to pay, or it has been too difficult to attract a large enough audience to support the cost of television or movie-quality work.

But Media Rights Capital, a boutique production company that has the ability to invest about $400 million a year in movies, television and Internet episodes, thinks it has figured out a sustainable business model with the Google Content Network. Every time someone clicks on one of the syndicated videos, the associated advertiser pays a fee, with shares going to Mr. MacFarlane, Media Rights, Google and the Web site that generated the click.

“We believe the revenue could be formidable,” said Karl Austen, a lawyer who worked on the deal. “What is exciting is that this is a way to monetize the Internet immediately. Instead of creating a Web site and hoping Seth’s fans find it, we are going to push the content to where people are already at.”

Media Rights sells the advertising inventory. Asif Satchu, the company’s co-chief executive, would not reveal how much advertisers were being asked to pay, except to say that it is “significantly higher” than if they were placing the same ad via AdSense.

Hollywood’s powerful Endeavor talent agency helped shepherd Mr. MacFarlane through the negotiations, which started during a recent gap in the animator’s contract with 20th Century Fox. Mr. MacFarlane said he wanted to take a stab at an original Internet program because he was feeling constrained by the “taste police,” a k a the Federal Communications Commission

Sitting in his office wearing jeans and a white T-shirt, Mr. MacFarlane described feeling stifled as a comedian by an F.C.C. crackdown in recent years on what it views as unsuitable language and situations on television. Mr. MacFarlane said he believed that the public’s appetite for raunchy humor and coarse language was only expanding and that television networks like Fox were having a harder time capturing viewers in part because they had to tread carefully or risk fines.

“I just felt I could be a lot more honest on the Internet,” he said.

Mr. MacFarlane started the project on the assumption that he would do 20-minute television episodes and break them into segments to dole out online.

“But that seemed a little odd and a little pointless,” he said. “Why wouldn’t you just release the whole thing at once?”

Google executives also provided him with stacks of data showing how people interact with Web video, including how long the average user will watch before clicking on something new. That prompted Mr. MacFarlane to scrap his original project and rebuild the idea from the ground up.

Each installment is different, but a typical one is titled “Mad Cow Disease.” The clip, which is 38 seconds long, opens with a news anchor reporting on an outbreak of mad cow disease in a dry fashion, detailing the debilitating effects of eating tainted beef. The clip cuts to a shocked male and female cow seated in a tidy kitchen with giant steaks on their plates.

For Mr. MacFarlane, 34, the venture is more than just adding to his already sizable fortune. (His new multiyear contract with Fox, signed this spring, is valued at nine figures.) One goal is to use the venture as a testing ground for new material and a way to ignite attention. At the very least, “Cavalcade” will become a DVD, but the hope is that part of the series will click with audiences and perhaps lead to television or even animated movie projects.

Indeed, in a watch-what-you-want, when-you-want world, the standard processes of rolling out new television programs are breaking down. Even a decade ago, putting a new show on a network schedule would assure that it would be exposed to most of the country; people would either respond or they wouldn’t. Today, with television ratings in particular dwindling, creators like Mr. MacFarlane have to find new ways to introduce new material.

Nobody knows how content can catch fire in unexpected ways more than Mr. MacFarlane. In 2002, “Family Guy” was canceled for poor ratings after running for three seasons. But the irreverent series continued to make new fans through DVD sales. In 2005, Fox reversed itself, citing strong DVD sales, and “Family Guy” has gone on to be one of the biggest comedy hits on television.

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