The top floor of United Talent Agency looks the part with its expansive glass-walled offices, chic artwork and an army of fashionably dressed agents working deals for the likes of Harrison Ford.
And then there are the four guys toiling downstairs.
"This is it," says Jason Nadler, 28, waving at a crowded space that would barely cut it as a waiting room upstairs. Here, Nadler and Ryan Reber, 28, Barrett Garese, 27, and Jon Zimelis, 27, scour the Internet daily for The Next Big Thing in entertainment and pop culture.
In these dorm-room-style digs — unused foosball table, joke poster of O.J. Simpson — the young scouts who make up the talent agency's 2-year-old Web division, UTA Online, have been feverishly signing up dozens of digital mavericks in hopes of finding that rare bright light who can build a lucrative entertainment enterprise.
"There's a huge cultural change going on out there," Nadler says. "The model of how people consume their entertainment is totally up in the air."
That's not the only thing up for grabs. The foundation of Hollywood's dominance in pop culture and the entertainment industry is being threatened by the democratizing force of the Internet, which posits that anyone with a snappy idea and a video camera can dish up features to the masses.
As a result, top Hollywood agencies such as UTA, Endeavor and Creative Artists Agency are diligently mining the Web for raw talent. The process quickly has become as crucial to entertainment talent scouts as trawling smoky comedy clubs or screening obscure movies has been for generations.
Meanwhile, network executives are busy signing deals with online content producers with a knack for wooing audiences with short attention spans. This month, CBS brought on EQAL founders Miles Beckett and Greg Goodfried, the duo behind the first successful Web serial, LonelyGirl15, to help create unique extensions of CBS shows for the Web.
"The media companies know they will ignore this trend at their peril," says Larry Gerbrandt, principal with Media Valuation Partners, a consulting firm that advises entertainment companies. "The Internet is what cable TV was two decades ago. At first, the big guys balked at it. Now, they own it."
There are bargains to be had
There are some encouraging signs for the executives diving into an unpredictable world of entertainment fueled largely by the whims of twentysomethings:
•For companies used to spending millions of dollars on talent and programs, the Web is a bargain on both fronts.
"For what you spend on one TV pilot, you could do an endless online serial," Gerbrandt says.
Precise budgets are rarely discussed by talent agencies or networks, but producers agree a two-minute video can be made for a few thousand dollars.
"The beauty of the Web is that you can easily test an idea and move on," Gerbrandt says.
•Although media companies of all types continue to wrestle with how to make money from the Web, money is flowing into that part of the entertainment industry at a time when TV and film are finding it increasingly difficult to capture audiences.
Online advertising spending is projected to double to $50 billion by 2012, according to forecasting group eMarketer.
"There's no question this is a new and valued marketplace," says Lori Schwartz, director of Interpublic Group's Emerging Media Lab, which advises Web advertisers. "The convergence of broadcast and broadband will really make this big."
Well, maybe — if the Web can become a reliable source of watchable programming.
Right now, however, "it's nothing more than a flea market," Schwartz says, using a description that is a favorite among those studying the Web entertainment space. "There are lots of content producers and lots of sites begging you to hang around. But to find anything good really takes digging."
Even when an Internet video is a success among the masses, it doesn't mean it will be a marketing success that can be copied.
Consider the all-time king of YouTube clips, Evolution of Dance, which features motivational speaker Judson Laipply grooving through various dance crazes. It has been viewed a staggering 85 million times, but apart from perhaps boosting Laipply's speaking commitments, the video has not made its protagonist a mainstream star or a mountain of money.
Another example is comedian Will Ferrell's site, FunnyOrDie.com. It routinely showcases the work of talented A-list and amateur jokers, but the portal has yet to laugh all the way to the bank. The reason? An onslaught of competitors.
"There are 1,700 sites and counting that offer Web video content, and because that group is fragmenting, few sites are emerging as true destinations," says Chad Cooper of OVGuide.com, which studies the online video phenomenon. "As for what people will go to the Web to watch, there's still a discovery process going on."
That's why some of the giants in the entertainment world are treading carefully. In February, Disney launched Stage 9 Digital Media, whose sole mission is to generate original online-only content. It's debut offering was Squeegees, a series about window washers that was created by an L.A. foursome dubbed Handsome Donkey.
"We want to see if we can re-create the TV model on the Internet," says Handsome Donkey's Aaron Greenberg.
"Admittedly, we have a more run-and-gun style than what you normally see on television."
Not just 'skateboard wipeouts'
The style doesn't matter if the work is compelling, says former Disney chief turned Web entrepreneur Michael Eisner.
"Ultimately, what will win out on the Web is story-driven content," says Eisner, whose new-media studio, Vuguru, has produced the popular online series Prom Queen. It's a horror saga geared toward teens and young adults who want their entertainment in short (typically about two minutes), frantically paced episodes.
Eisner's newest offering is an episodic prequel to a forthcoming book by Robin Cook called Foreign Body. About 50 two- to three-minute videos soon will begin appearing online daily, stopping the day before the book's Aug. 5 release. The Web episodes are the work of Cook and UTA clients Big Fantastic, another quartet of friends whose Web work is leading them into the mainstream.
The group, which produced Prom Queen, also has plans to team up with Charlie's Angels director McG to create the online mystery drama Sorority Forever for TheWB.com, Warner Bros' online resurrection of its defunct WB television network.
"We want to grab a piece of land in this space and pioneer it, legitimize it," says Chris Hampel of Big Fantastic, whose attitude is echoed by a declaration on its website: "We believe Web video won't be limited to skateboard wipeouts."
Hoping to capitalize on that same episodic trend is Brent Weinstein, UTA Online's former chief who last year started 60Frames.com, which has a commitment from Oscar-winning directors Joel and Ethan Coen to produce short features for the Web. Weinstein's current feature is Blood Cell, a Web-only horror thriller starring Jessica Rose.
In 2006, Rose was the star of the LonelyGirl15 online series, which began in 2006 with Rose posing as a video blogger who mused about her family and life as a teenager. Many viewers mistook Rose for a real blogger until a few viewers, suspicious about the blog's relatively slick production, outed her as an actress who was part of a production backed by Creative Artists Agency.
"Online entertainment is as different from TV as TV is from film," says Weinstein, whose company aims to have 50 Web series in production by the end of the year. "When you're telling stories in two-minute bursts, it's much more like a comic strip that you come back to day after day to see what happens. Not everyone can do it, but slowly we'll figure out who the Aaron Sorkins of the Web storytelling world are."
Great tales also are what ultimately should bring in the bucks, whether they feature unknown faces or tabloid regulars, says Interpublic's Schwartz.
"Advertisers will want variety. Some like the idea of signing up with online fare produced by big stars, while others prefer to be associated with edgier sites that might be discovering new talent," she says. "The question is which business model will ultimately work."
Talent agencies are covering both those bases. Among other things, the agencies are steering established writers and actors toward online projects that ensure broad exposure.
"The level of interest in this space by our A-list clients is expanding," says Chris Jacquemin, head of the Endeavor agency's digital department. He cites a deal Family Guy creator Seth MacFarlane made to create a series of Web shorts to run on Google.
'To us, it's big bucks'
Endeavor recently signed Brandon Hardesty, a 21-year-old mimic from Maryland whose re-enactments of scenes from famous films have become hits on YouTube. But the Hardestys of the Web world are rare.
"Just because we now have the Internet, it doesn't mean there's more talent out there. In fact, it's as finite as ever," says Michael Yanover, head of business development at CAA. "We're looking for people whose talent works across many platforms, not just online."
CAA has helped to launch several video portals; it partnered with Ferrell and Silicon Valley's Sequoia Capital to start FunnyOrDie.
Says Yanover: "The Internet's emerging talent is where the future lies."
An example: David Young, 25, and Joey Manderino, 23. The two buddies from Indiana started their own website two years ago as a repository for the videos they had starting making while in college.
After developing a following on websites such as CollegeHumor.com and YouTube, the duo was signed by CAA. The result: Besides a deal with Warner Bros, the two are writing a comedy pilot for TBS with the support of fellow CAA clients Mitch Hurwitz (Arrested Development) and Eric and Kim Tannenbaum (Two and a Half Men).
"It's especially cool to have more support for our online work," Manderino says. "The budgets per episode are modest, four figures. But hey, before that, we were paying to do this out of our own pocket. To us, it's big bucks."
There's another reason Young and Manderino feel fortunate: The number of amateurs hoping to be discovered by Web talent scouts has mushroomed during the past year, making it increasingly difficult to catch an agent's eye.
"The Web's almost oversaturated with videos now," Manderino says. "It's getting really hard to stand out."
Vetting the videos
At UTA Online's office, Nadler cues up an episode of Bus Pirates, the work of a group of prospects whose online video skits imagine what it would be like for commuters to run into pirates on the Los Angeles bus system. The clip is clever, but the UTA crew doesn't quite see it as a winner.
A few minutes later, the UTA guys are united in their admiration for another video. Called Duck Tales, it features the bouncy theme song from a Disney cartoon featuring Scrooge McDuck and his brood. But the darkly outrageous scenes that unfold feature a female duck who is kidnapped, bound, tormented and returned to the front steps of her uncle's mansion.
To the UTA crew the clip is funny — and a source of frustration. Fatal Farm, the L.A.-based duo that produced the video, has resisted UTA's overtures to sign a deal.
"We're working on something right now, and prefer to talk later rather than get distracted," says Fatal Farm's Zach Johnson, 25.
That attitude might seem foolish to some. But it's a sign of confidence that springs from taking a look around at Hollywood's changing landscape.
Just ask the Handsome Donkey gang, whose group meeting places have gone from coffee shops and living rooms to offices within the Disney empire.
"When we first started getting attention, people would say, 'Hey, you've got a great steppingstone into the world of real entertainment,' " Greenberg says. "But from Day 1, we never felt the Internet was some sort of proving ground.
"It's a new platform, period."