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Technology Stocks : Aahh...iNEXTV (AXC) The NEXT Thing! -- Ignore unavailable to you. Want to Upgrade?

To: wlcnyc who wrote (3899)	6/7/2001 10:47:32 PM
From: Hal Campbell	Read Replies (1) \| Respond to of 4169

OT LOL community-2.webtv.net

To: wlcnyc who wrote (3899)	6/8/2001 9:36:38 AM
From: killybegs	Read Replies (2) \| Respond to of 4169

Nibblebox and Hypnotic Merge in Diversified Media Play, Raise $15 Million next By Ben Fritz In yet another positive sign for entertainment companies looking to make online content one part of a diversified media strategy, Hypnotic and Nibblebox are merging and the combined entity has raised $15 million. The investment was led by Vivendi Universal, which previously owned 49 percent of Hypnotic, and German bank Dresden Kleinwort Wasserstein, with additional funds from previous Nibblebox investors Knowledge Universe, Windsor Media and Entertainment Media Ventures. The combined entity, which is taking the name Hypnotic, will be headquartered in Los Angeles and New York and will focus on identifying and developing new filmmakers online and distributing their content through a variety of offline outlets. David Bartis, who was CEO of Nibblebox, will serve as CEO of the new Hypnotic, while Hypnotic CEO Jeremy Bernard becomes President and COO. "From a creative point of view, we both have the same approach to nurturing new talent," Bartis told DCD. "But we both have the bigger end goal of being a lot more than an online site for content. We're going to be very aggressive in the distribution area so that we can take any valuable shorts we develop and exploit them around the world." Nibblebox has previously focused solely on developing films by college and film school students, which it would show on its website and then try to distribute elsewhere. Hypnotic similarly identified and produced films by new talent, although it did not restrict itself to students. It was best known for its million-dollar film festival, which recently awarded filmmaker David Von Ancken a production deal with Universal based on a short film he submitted. The relationship with Universal is expected to be a key asset for Hypnotic. With its new investment, Vivendi Universal is likely a controlling owner of the new entity, although details were not disclosed. In addition, Hypnotic has a number of on- and offline distribution deals that could prove valuable, with partners such as HBO, Sundance, WindowsMedia.com, and all of the major airlines. -------------------------------------------------------------------------------- The merger has been in the works for seven months, starting when CEO David Bartis approached Universal as a potential investor in Nibblebox's second round. -------------------------------------------------------------------------------- The new company also expects to generate revenue from "advertainment," or sponsored content where it will connect emerging filmmakers with sponsors who want to produce films. The merger has been in the works for seven months, starting when Bartis approached Universal as a potential investor in Nibblebox's second round. "The more we talked the more we realized how much overlap we had with Hypnotic," he recalled. "That same week, an executive VP at Hypnotic that I went to college with called me and said our two companies should meet. So we started to work together on some business deals, and eventually we realized that we would be much more attractive to investors if we combined." Hypnotic's $15 million round is an impressive total in a year when the only other significant content investments have been Mondo Media's $17 million, IFilm's $10 million, and AtomShockwave's $22.9 million. For Hypnotic, as for most Internet-related content plays these days, raising the new funds was a long process, but Bernard said it was a combination of the company's diversified outlets and conservative approach that made it happen. "Both we and Nibblebox realized a long time ago that a pure ad-supported online content company wasn't going to work, and we've been working on strategies for a long time to convert stuff offline," he stated. "That was definitely one of the things investors recognized. We also both keep our overhead low, with few employees, and I think that helped investors to realized we have a solid foundation for running a business." The new Hypnotic will operate with 37 employees in L.A. and New York. Bartis said both firms laid off some staff in preparation for the merger. The $15 million investment brings the total raised by Hypnotic to around $26 million, as both companies raised first rounds of approximately $5.5 million. In addition to Bartis and Bernard, Hypnotic executives include Elizabeth Hamburg as chairman and film director Doug Liman (Go, Swingers) as vice-chairman. Feedback: letters@digitalcoastdaily.com