AtomFilms in cable deal with Comcast

Copyright 2002 / Los Angeles Times
Los Angeles Times...08/05/2002
From LexisNexis

By John Healey
from CED Broadband Direct, August 5, 2002

In an unusual leap from the Internet to television, AtomFilms is expected to announce today that its collection of short films and animations will be offered this fall through Comcast Cable Communications Inc.'s video-on-demand service in Philadelphia.

The deal is the first deployment to be announced for AtomTelevision, a joint venture between AtomFilms -- a subsidiary of San Francisco-based AtomShockwave Corp. -- and Global Media Holdings, a New York-based creator of cable TV programming.

Mika Salmi, chief executive of AtomShockwave, said AtomTelevision hopes to have several more video-on-demand deployments this year and to distribute a 24-hour digital cable TV channel next year. The initial deal will be five one-hour packages of films and animations that Comcast will offer free to subscribers who sign up for its digital cable service.

In the late 1990s, a slew of entertainment companies brought original programming to the Web, hoping it could be a low-cost proving ground for their characters and story lines.

The idea was to build an audience online, then take the programs to a more lucrative medium -- television, for example, or feature films.

But when advertising rates plummeted and Internet stocks tanked, many of these companies collapsed too. AtomFilms survived largely because it merged with Shockwave, whose downloadable games have proved to be a steady source of cash, Salmi said.

AtomFilms has deals with about 10 distributors, including mobile phone companies and Internet providers.

Its films and animations have appeared sporadically on HBO, Showtime and the Sci-Fi Channel, but the AtomTelevision initiative is aiming for a more steady presence on cable TV.

"It will be interesting to see what crosses over" from the Internet onto TV, Salmi said. The company may try to rescue some of the programs developed by defunct dot-coms, he said.

"There's a lot of great stuff that people have made but never really was seen."

AtomTelevision is negotiating with several of the top cable operators but hasn't won any distribution deals for its cable TV channel.