The Ten Network and Village Roadshow are blaming the dismal dot-com scene for the failure of their expensive youth entertainment site, Scape.
The partners pulled the plug on Scape yesterday after spending a reported $44 million to develop it. Arthur Andersen has been appointed administrator.
In a statement to the Australian Stock Exchange, Channel 10 and Village Roadshow said the online venture had not met its financial and performance goals and was unlikely to do so in the foreseeable future.
"A key reason for this has been the failure of the online sector globally to develop as expected," the statement said.
The partners were buoyant about the prospects of the entertainment and leisure internet destination when they launched it last last year. It focused on movies, music, TV and video spiced with celebrity gossip. For visitors with bandwidth to burn, it also offered streaming animation, games and short films.
The site never soared as high as its founders hoped, although it was sitting in the top 20 ranked entertainment sites in the week before it folded, according to Hitwise statistics.
Ironically, even as it was being shut down, Scape was outrating Channel 10's own website which is listed around number 30 in the Hitwise rankings.
Funds owed to current employees would be paid promptly, according to Channel 10 and Village Roadshow. They said they would incur a one-off charge for Scape which would be finalised when administrators have concluded their work.