September 27, 2008 / 12:00 AM / in 9 years

Stars tune-in to Web video, advertisers still shy

LOS ANGELES (Reuters) - The fall television season kicked off this past week, but viewers looking for their favorite actors returning to airwaves may not find them on TV as new Web-based shows increasingly draw stars online.

The Internet, and the experimental low-budget dramas and comedy shows it spawned, has emerged as a refuge for Hollywood players such as "Family Guy" creator Seth McFarlane and comedienne Illeana Douglas who are seeking creative autonomy.

But because of advertisers' reluctance to spend on unproven Web-based shows, making money from them remains a challenge even for productions with top talent, experts said.

Still, profits hardly seem to matter to Douglas, 43, who has appeared on "Ugly Betty" and has dozens of movie and TV credits to her name. She describes making and starring in her Web-based comedy show "Easy to Assemble," which premiered this week on the Web, as one of her favorite projects.

"Honestly I would rather be on the Web than be on television because I don't have any illusions that if this got picked up and went to network television I would lose the creative control," Douglas said.

"For me, having been in show business for so long, I would rather have creative control and less money," she said.

Douglas received $50,000 from furniture chain Ikea to produce the 10-episode "Easy to Assemble," with appearances by actors Jeff Goldblum, Justine Bateman and Ed Begley Jr.

The show follows Douglas as she quits show business to work at an Ikea store, but finds her old life catches up with her.

Celebrity Talent

Douglas and the cast of her Internet comedy are not the only Hollywood stars making waves on the Web.

Seth McFarlane, whose Fox show "The Family Guy" is a mainstay hit, has signed a deal with Google to produce cartoons on the Internet.

Actress Rosario Dawson, the 29-year-old star of movies "Sin City" and "Clerks II," stars in an NBC-Universal show for the Web called "Gemini Division," a science fiction series in which Dawson plays a New York cop.

The entry of top talent into the Internet field comes as lesser-known producers and actors have struggled to find an online business model that works, experts said.

"People who thought, 'this is finally it. We're going to take the power out of the big studios and the big networks and we're going to give it to the little guy and the creative artist,' sorry it's just not a reality," said James McQuivey, an analyst with Forrester Research.

Advertising rates for TV shows replayed on the Internet on sites such as Hulu and Fancast outstrip advertising for independent Web-based shows by factors of 10 or more, he said.

Internet company Blip.tv carries more than 33,000 shows on its site, but most of those are not making money, said Dina Kaplan, the company's chief operating officer.

Still Kaplan, like others, are big believers in the future of Web-based shows because there have been several creative successes launched online by independent producers.

The raucously violent Web-based animation "Happy Tree Friends," created by Mondo Media, has drawn 249 million views on the video sharing site YouTube.com.

Creating the cartoon, which has migrated to TV in the United States and overseas, required more than $8 million in investment since the show was launched in 2001, said John Evershed, co-founder and CEO of Mondo Media.

"We're investing big dollars into creating content ... I think in general people continue to think too small," he said.

Reporting by Alex Dobuzinskis: Editing by Bob Tourtellotte

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