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Net short-film market dries up

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Had director Mark Wilkinson been looking to put his short film online a year ago, he likely would have been able to pick up a nice chunk of change. With an award-winning short film at the height of dot-com hysteria, Wilkinson would have been a popular target for online film companies who were aggressively buying up content in a race to build libraries that they hoped would bring them riches.

What a difference a year makes.

Online film companies' plans to monetize short films never quite materialized, and as a result, the days of paying filmmakers to display their work online are coming to an end. Filmmakers have adjusted their desires accordingly, placing an emphasis on finding stable outlets for their work as opposed to the biggest paycheck.

"When I was deciding where to post my film online, my biggest worry was signing my film over to a company that might fold," said Wilkinson, whose confidence in online film portal IFILM led him to post his 12-minute comedy "Sally and Angela" for free there last week. "As dot-coms drop like flies, I had to ask, 'Do I really want to sign with a company that may fold or shrink and sell off the rights to my work?' "

Wilkinson's concerns show just how much the market for short films online has changed over the past year. Just as quickly as it appeared out of nowhere, it seems to have vanished.

"There was a wonderful market for short films online a year ago," said Lisa Lieblein, CEO of the ACME Talent and Literary agency, who brokered several deals during the online spending spree. "They were chasing people down and offering ridiculous amounts of money to acquire or produce short films. But it was silly and didn't make sense."

It also didn't make money. Now-defunct companies including Pop.com, Z.com and Digital Entertainment Network offered previously unheard-of sums of money to acquire short films -- a genre that has never been a big moneymaker -- and paid a heavy price.

Of all the companies that were responsible for growing the online short-film market, AtomFilms was among the most notable. The company stormed into film festivals around the globe and snatched up product, offering filmmakers between $500-$2,000 for their work. It even gave some filmmakers shares of the privately held company's stock.

Atom sought to monetize its acquisitions by distributing them through several channels, including the Internet, television, mobile devices and airlines. The company signed distribution deals with such companies as TiVo, British Airways and Blockbuster.com, but even those successes haven't proven enough to counter the costs.

The deals, combined with its merger with Shockwave in January, helped Atom survive the dot-com downturn. But last week's massive layoffs (AtomShockwave laid off 120 of its 170 employees and closed offices in New York and Los Angeles) are evidence that its initial acquisition investments have yet to pay the dividends it had hoped.

As the company restructures and strives for profitability, it has cut back on its acquisition plans. "We are planning to focus heavily on our core strength of distribution," an AtomShockwave representative said. "We will continue to acquire some content but in a very de-emphasized mode."

Although AtomShockwave will still have a presence on the festival circuit, the company has shifted its focus to working with its existing library.

The struggles of AtomShockwave only further cement the end of the era when companies are willing to pay to put short films online.

"You're just not going to make the kind of money back on shorts that you could a year ago," Lieblein said. "The market is smaller."

The online market may have evaporated, but there is still a market for short films offline. Lieblein points to Spike and Mike's Festival of Animation, HBO and the Sci Fi Channel's Exposure show as outlets for short films to generate revenue. Lieblein also said several major exhibitors are in negotiations to acquire short films to run before their theatrical releases.

"Before last year, short films were always just viewed as a calling card," Lieblein said. "If you made any money back, it was usually just from your parents. Now, we're seeing a return to the idea that, at the end of the day, a short film is still a calling card."

Thus, the focus of the online short film market has changed. With companies offering less (and in most cases no) money, filmmakers are viewing it as an opportunity to get their work seen and possibly get themselves discovered.

"The thing filmmakers we work with are most interested in is how we can help them advance their career," IFILM director of programming Jesse Jacobs said.

And for most filmmakers, the exposure they can get online is still more valuable than the couple thousand dollars they may have gotten last year.

"The days of money being thrown at short film directors are over," Wilkinson said. "The money just dried up. But as a filmmaker, it's still a great way to get an audience."

Josh Spector writes for The Hollywood Reporter

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