'Those Pesky Dot-Coms'

CANNES, FRANCE (05/23/2000) - After the dot-commification of the Sundance Film Festival, Internet companies at Cannes arrived with high hopes and deep pockets. Sadly, they're heading home with less enthusiasm.

Companies like ShowBiz Data, MovieShares.com, Pop.com, Filmbazaar.com, iFilm.com and ReelPlay.com converged on the Cannes Riviera with a host of products ranging from virtual-film markets, which let distributors view, buy and sell movies online, to financing schemes that raise money online to democratize the process of investing in movies. Although Internet-related companies came offering a variety of products, the movie-industry interest they were trying to capture lumped them into a group: "those pesky dot-coms."

Much of Cannes went on as usual. Movies were screened. The sun shone. The French security guards who deliver cash to ATMs went on strike, and more than 30,000 tourists were left without local currency. But Internet companies that had come for their day in the sun found the reception less welcoming than they'd hoped. Part of the trouble was that the so-called dot-coms approached Cannes much the way they would approach any event: They bought the biggest signs and the most marketing materials and figured they'd naturally receive the greatest respect. Massive yachts in the Cannes harbor sported banners for every conceivable film-related URL. Internet sponsorship money bought a listing at hundreds of movie screenings.

And the Croisette, the strip of beachfront which hosts the bulk of the festival and accompanying film market, was crowded with billboards in which every company name ended in ".com." Even at the American Pavilion, a white tent pitched on a beach crowded with sunburned Americans, the sign inciting visitors to "Recyclez, s'il vous plait" was sponsored by a dot-com. For all that, though, the film industry just wasn't having any of it. Cannes is its festival, and it's not quite ready to hand over the reins. "Dot-coms spent a lot of money here, and they may have spent a little too much," says Sperling Reich, CEO of FilmStew.com, who recently abandoned a career in movies to become an Internet entrepreneur.

"They may have irritated the very people they are trying to please. Next year, if they're not around because they spent too much money this year, they're going to look really tacky." Reich said the more egregious offenders had spent as much as $500,000 for their presence at Cannes, laying out $3,000 per day for a yacht, plus the expenses of hotel suites, billboards, movie sponsorships, staff and endless trays of canapes and bottles of chardonnay. But some observers felt that these grand gestures showed little class. "Many felt that the dot-coms are taking away from the glamour of the festival," says one public-relations spokeswoman. "It's almost getting on people's nerves that these dot-coms are coming in thinking they can buy everything like they've done in other industries."

It's not as though Internet companies are an unknown phenomenon at Cannes, but this year's show marks the first time they have arrived with the cavalry. Mayra Riesman, founder and CEO of FilmScouts.com, has been producing Web coverage of the festival since 1995, and she says her tenure here means she's now an accepted part of the mix. "We're now considered equal with the broadcasters," she says. "But this year, it's the invasion of the dot-coms. You just can't arrive and expect these relationships to show up." Scott Sander, CEO of SightSound.com, was marking his second year at Cannes, and he agrees with Riesman on the problem of the arrivistes. "Everyone is here from the dot-com world carpetbagging their way into the movie industry," he says.

"It is Hollywood vs. the Internet." Observers trace the antipathy between the two parties to a lack of respect for tradition on the part of the Internet companies, and the movie industry's fear of technological change. The business going on behind the celebratory facade is rooted in tradition, a complex process of buying, selling, meeting, greeting and wooing during cocktail parties and lunches. Because they have shown little respect for the process, the theory goes, Internet companies are getting the cold shoulder. Even those who've recently turned from a career in the film industry to building an Internet company have been surprised at the reception.

Sonia Sondervan recently left a job at a mainstream film company to join Pop.com. She was surprised to find herself persona non grata in her old circles. "You do the same meetings you always do, but suddenly you find yourself shoved back and shoved back," she says. "This is our first year of buying here, and we're having a difficult time convincing producers and directors. They don't think it does their film any justice to be on a computer.

There's a lot of resentment." Sondervan says a sales agent chased her out of the Russian Film Commission booth, screaming, "We will never sell our film to the Internet!"

Although some of the dot-coms worried that simple fear was holding back the movie folks, others suggested that a lack of demonstrated profit had given the Cannes film gurus pause. "I don't think it's fear of the unknown, it's fear of not making a profit," says John Sloss, an entertainment lawyer and partner in Pop.com. "The studios are watching it but [won't commit] until they figure out how to monetize it." The tradition in the Internet is to stake a claim first and make money later, so some of the dot-coms here weren't too worried about the way they were received.

"It's my hope that all these Hollywood people get fleeced by dot-coms the way they fleece everyone else," says Traci Lind, a scriptwriter and director of communications for ShowBiz Data. Riesman was content to issue a warning: "Come five years, we will be Cannes," she says. "You'll be seeing our films in competition. This is built on relationships. The future of film is in its infancy."

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