When Shawn Bercuson and his family went to Park City, UT, exactly one year ago, they may have been the only people not in town to attend the famous Sundance Film Festival, which is held there every January. “I do enjoy movies, but my family and I go skiing every year during Sundance,” he says. “If you go then, the mountains are empty. It’s unbelievable. And then at night, there are world-class concerts and movies. It’s a ton of fun.”

Still, it wasn’t to be a typical January for Bercuson. The former Chicagoan, who was one of the original employees at Groupon and a former principal with venture firm Lightbank, had just moved to San Francisco. He was thinking about his next career move. His friends knew that, and they were peppering him with ideas.

“I had some friends in the [film] industry who know me as their go-to tech entrepreneur, and everybody was talking about distribution and how DVD revenues are declining,” Bercuson recounts. “I started talking to producers and filmmakers and going to meetings my friends had set up. And it was amazing to me, number one, that this business was so antiquated, and number two, that it was such a huge opportunity. They really needed help.”

By “this business,” Bercuson means independent films—those where more than half the financing comes from sources outside the Hollywood studio system. For indie filmmakers, it’s a fiercely competitive world. Of the 4,000 films submitted to the Sundance festival in 2011, only 200 were accepted, and only 50 of those were acquired for theatrical distribution. “The good movies were getting financed,” says Bercuson. “The problem was distribution. And the more I looked into it, the more I realized how similar the problem was to Groupon.”

In a way, Bercuson suggests, indie movies are like coupons for local deals. There are a lot of coupons out there, but before Groupon they were harder to find, remember, share, and use. Similarly, “There were plenty of repositories for movies, like Amazon, iTunes, and Netflix, but they were still having a hard time finding an audience. The question is, how do you connect content to an audience that’s relevant when [the filmmakers] don’t have the money to market these titles?”

At Prescreen, the San Francisco startup Bercuson founded shortly after his Park City trip, the answer also looks a lot like Groupon’s. The company picks one independent movie per day to feature on its website and in its e-mail newsletter. People who rent a streaming version of the movie on that first day get 50 percent off the rental price ($4, as opposed to the usual $8).

As with Groupon, there’s a social and reputation-based element: if you’re among the first 5 percent of people to rent a movie, or if you can get at least three friends to rent on your recommendation, your next rental is free. And just like Groupon’s coupons, Prescreen’s offers are time-bound: once users start playing the movie, they have 48 hours to finish viewing, and most movies get booted off the site after 60 days to make room for new additions.

The only catch is that you have to watch Prescreen’s movies on your computer. The service doesn’t yet work with iPads, set-top boxes, or Internet-connected TVs. (That said, it’s not too hard to play streaming video from a laptop on a big-screen TV, if you have the right connectors. See my 2009 column Cutting the Cable: It’s Easier Than You Think.)

To tap into the excitement around this year’s Sundance Festival, which runs from January 19-29, Prescreen has gathered all of the publicly available trailers for Sundance-anointed films—so far that includes 86 of this year’s 112 features. You can’t stream the full version of these movies, but you might be able to after the festival. The whole point of Prescreen—and the reason Bercuson himself will be in Park City again this year—is to offer an outlet to the majority of filmmakers who, come January 30, won’t have distribution deals.

Also starting this week, Prescreen will spend three weeks promoting films from the previous three Sundance festivals that “didn’t get the love they deserved,” according to Bercuson. These hidden gems might even have turned up on Netflix or iTunes, but haven’t yet found their niche audiences. “We are going to show that there is a lot of great content out there that doesn’t have mass-market appeal but does appeal to me or you,” he says.

Bercuson launched Prescreen on September 14 with $1 million in Series A funding from a group of individual investors including former Facebooker Chamath Palihapitiya, CMEA Capital partner Saad Khan, Kauna Ventures chairman Ed Cluss, Rapleaf founder Auren Hoffman, and … Next Page »

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San Diego-based Legend3D, a private digital media and visual effects company, says it has closed on a $19 million Series E preferred stock offering.

The company, which ranks as the largest studio providing 3D conversion services in the United States, says proceeds from the offering will be used to further research and development, and to help Legend3D finance some post-production 3D film conversions through partnerships with major Hollywood studios—a new business initiative. While major Hollywood studios are excited about the trend in 3D filmmaking, they have trouble justifying the expense of converting existing motion pictures from 2D into 3D, according to Barry Sandrew, Legend 3D’s founder and chief operating officer.

Legend3D says its latest round of financing was led by Northwater Capital Management, an investment firm based in Toronto, New York, and Chicago that makes strategic investments in intellectual property. Legend3D was founded just over a decade ago with $6 million in venture funding from what is now Boston’s PAR Investment Partners, which also joined the latest round with another early venture investor, Augustus Ventures Limited.

By forming partnerships to finance new film conversion projects, Sandrew says Legend3D would share in revenue generated by 3D remakes of tried-and-true motion pictures. As an example, Legend3D screened a 4-minute preview of a 3D conversion of the 1986 blockbuster “Top Gun” in September at the International Broadcasting Convention in Amsterdam. The segment consisted mostly of Top Gun’s “danger … Next Page »

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Seattle’s Hark, an entertainment website that lets users search, play and share audio snippets from movies, TV shows and other pop culture sources, is showing off a new design for its top-tier content. The new approach includes an upgraded display with an easier way to sift through quotes from a particular source, and more prominent buttons for using social channels like Twitter and Google +1.
The look is somewhat similar to YouTube’s, with options for additional plays in a ribbon across the bottom of the screen. Hark CEO David Aronchick says the new “Curated Collection” is in a beta mode right now, testing with the classic film version of “Glengarry Glen Ross,” before rolling out to other offerings.
As we detailed last month, Hark is among the Seattle startups that are trying to build bridges to the entertainment industry, capitalizing on the Seattle area’s strengths to help Hollywood embrace the digital age.

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When Dave Long first started pitching movie studios on a new way to market their old titles, he encountered a fair bit of skepticism. After all, what could a boardgame entrepreneur from soggy Seattle possibly teach Hollywood about selling its own stars?

Nearly 10 years later, the “Scene It?” brand—which builds trivia games around movie and TV clips—has been adapted to iconic titles like Seinfeld, South Park, James Bond, and Harry Potter. The company that Long co-founded, Screenlife, was acquired by Paramount in 2008 and has sold some 20 million games worldwide.

And Hollywood’s major players, Long says, have a different feeling about visitors from up north. ”There is a little mystique around Seattle,” he says. “I’ve had big executives say ‘Hey, what’s in the coffee up there? It seems like there’s a lot of creativity up there.’”

That kind of reception from entertainment bigwigs is helping to fuel an emerging cluster of Seattle companies that are taking innovative approaches to selling entertainment’s products and personalities. These entrepreneurs are building on the area’s traditional strengths in digital media and gaming, with hopes of helping the entertainment industry navigate the fundamentally shifted economics of the digital age.

The roster includes Hark, a startup that aims to spread bite-size chunks of content through the social sphere; Hypershow, a quietly profitable company enabling richly layered digital movies; and Giant Thinkwell, an incubator-stage company that wants to help celebrities of any stripe reach their fans through quirky social games.

Dave Long is back on the job as well. His new company, Exponential Entertainment, is working with the studios to develop promotional digital games—and this time, they’re starting with some major first-run movies.

Building bridges to the star-studded streets of Hollywood still has its challenges, even in a highly networked age. It’s simply harder to build relationships and keep your finger on the pulse of an industry when you’re hundreds of miles away from Sunset Boulevard.

But there are also advantages to being based in the Northwest, says David Aronchick, the founder and CEO of Hark.

“It’s far more cost-effective to work out of Seattle, and you obviously have an incredible depth of technical talent here that allows you to execute very quickly comparatively, and do some really cool things,” he says. “We’re not unique, but we certainly have a lot of cross-pollination because we’re a very migratory city. We pull in a lot of people from all over the place, especially people from on the West Coast. And this is a great place to set up shop.”

Here’s a deeper look at the startups I identified as part of Seattle’s emerging entertainment innovation cluster. I didn’t include folks who produce entertainment-themed content of their own, like the blog publisher Wetpaint, for example. The focus here is mostly on companies that are aiming for business partnerships with the entertainment industry.

Also purposely left off the list was a major name—the Internet Movie Database, or IMDb, which is owned by Amazon.com and headquartered in Seattle. Although it might seem kind of odd to think of … Next Page »

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Streetline Networks, a San Francisco startup profiled by Xconomy in December, said today that it has expanded Parker, its mobile parking spot finder for the Apple iPhone, beyond Hollywood to parts of the Marina District in San Francisco. The app can now guide drivers to blocks with open parking spots in Studio City, CA, as well. In addition, the company said it has released an Android version of Parker, and added features such as live garage data, parking location tracking, and a parking timer.

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San Francisco-based Clever Machine, the developer of a production management tool for film and video producers called Scenechronize, has raised $3.25 million in a round of equity-based financing that could eventually total as much as $6 million, according to a regulatory filing. The company is led by former Switchhouse chief technology officer Hunter Hancock and veteran software product manager Darren Ehlers. According to the company’s website, Scenechronize is the first application built on Clever Machine’s “post-relational database information management platform.” Investors in the round have not been identified, but Climan Sanford, the managing director of Los Angeles-based Entertainment Media Ventures, is listed as a director.

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It’s a universal urban experience: You’re zigzagging around the crowded city streets in your car, looking for an empty parking spot. The person in the passenger seat tells you to go right. You think you’ll have better luck if you go left. An argument ensues—as pointless as it is bitter, since neither of you has any actual data.

That’s exactly the situation that a new iPhone app called Parker attempts to eliminate. A San Francisco startup called Streetline unveiled the app today in Los Angeles, where it’s tied into an existing network of sensors embedded in city streets and parking meters in the Hollywood area. As you cruise along Hollywood Boulevard, Parker can show you a real-time count of the number of empty parking spots on each nearby block, helping you find a precious empty space faster than you otherwise would.

Streetline launched the app in a ceremony this afternoon with Los Angeles Mayor Antonio Villaraigosa and city council president Eric Garcetti. “Sometimes it feels like more movie stars have been discovered in Hollywood than parking spaces,” Garcetti said in a statement issued before the event. “This app will help drivers save time, reduce traffic and air pollution, and make visiting Hollywood even more enjoyable than it already is.”

For now, the $1.99 app only works in Tinseltown, and only on the iPhone. But the four-year-old startup has already built sensor networks in other parts of Los Angeles, as well as three other cities, and Streetline CEO Zia Yusuf says he hopes the debut of the Parker app will inspire more cities to ask for the technology, which was originally designed to help with parking enforcement.

Cities like Streetline’s system because it can tell parking officers how long a car has been in a given spot—which, for better or worse, means they can be more efficient about giving out tickets. The added revenue from writing more parking tickets more than makes up for the cost of installing the system, Yusuf says. But sharing the sensor data with consumers “is going to add a whole new dimension to the value of this information, and that is going to start accelerating [deployment],” he predicts. “I hope citizens will say, ‘I would rather go to a city where I can get real-time parking information than a city that doesn’t.’”

The 30-employee company, which has backing from Palo Alto, CA-based Sutter Hill Ventures, is part of a global “smart cities” movement organized around the idea that metropolises could function far more efficiently if infrastructure such as roads, bridges, water mains, and power lines were loaded with sensors that spit out real-time data. (In fact, IBM named Streetline the “world’s smartest startup” last month at Smartcamp, an entrepreneurship competition in Dublin.) The company’s parking sensors contain magnetometers capable of sensing a car’s presence, along with cellular radio equipment that uploads the information to a mesh of nearby repeaters and gateways, which pass it along to servers on the Internet. The sensor packages fit inside reflectors that can be glued to the pavement, or placed in recessed cans for snow-prone areas. There’s also a version that fits inside coin-operated parking meters.

Streetline has long pitched the sensors primarily as a way for traffic and parking departments to get smarter about enforcement; in a live webcast demonstration last week, I watched as the number of open parking spots in the area of Hollywood and Vine started out at 328, then dropped to … Next Page »

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All this talk about “The Social Network,” and Mark Zuckerberg this and that, got me thinking. What if they made a movie about a technology company that’s doing something really innovative now?

A modest company that’s expanding nationally and helping to set the agenda and culture for a new generation of techie entrepreneurs…One with deep connections to many of the top investors and venture capitalists around the country…

OK, I chose TechStars, the seed-stage investment and mentoring company, mostly because I think Robert De Niro could do a fantastic Shawn Broderick (head of TechStars Boston). I’m sure I’m not alone. Plus I’ve met or seen most of the TechStars folks in person, so I have some sense of their style and mannerisms.

Sadly, Hollywood’s not going to green-light this one unless TechStars makes it big—and a whole lot of backstabbing occurs—but here goes.

This is who I would cast in the key roles of “TechStars: The Movie.” We even have an A-list producer/director (see below). Now we just need a script, perhaps involving AngelGate and/or Y Combinator…

David Cohen (founder and CEO), played by Jon Favreau (photo: Thomas Crenshaw):

Brad Feld (co-founder), played by Seth Rogen (photo: Phil Konstantin):

Nicole Glaros (general manager), played by Mary-Louise Parker (photo: Gage Skidmore):

Shawn Broderick (Boston director), played by Robert De Niro (photo: Petr Novák, Wikipedia):

Andy Sack (Seattle director—photo: Randy Stewart), played by Michael Douglas (photo: Stephen P. Weaver, U.S. Navy):

David Tisch (New York director), played by Shia LaBeouf (photo: Nicolas Genin):

Jared Polis (co-founder), played by Peter Sarsgaard (photo: Patrick McBryde):

David Brown (co-founder), played by J.J. Abrams (photo: David Shankbone):

[Celebrity photos courtesy of Wikimedia Commons]

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OK. You’re a Hollywood director, and you’ve come to the Detroit area to film your movie and take advantage of Michigan’s highest-in-the-nation 42 percent tax credit. You’ve set up your home base in a local hotel and your star—let’s say, oh, Meryl Streep—she’s costing you $100,000 a day. You need to find a local crew right now to begin shooting. And …. action!

What happens next, if all goes well, is that a Michigan-grown crew is available to step in and—for far less than it would cost the director to fly in Hollywood folks—has the expertise and talent to, if you want to use a pure Michigan analogy, put that movie on an assembly line and crank out a quality finished product.

And that’s where a Detroit business incubator and one of Michigan’s few homegrown film studios and film schools enter the stage, with a soon-to-be-announced collaboration that will make sure local film crews are trained to step in. Wayne State University’s TechTown and Unity Studios of Allen Park, MI, and its affiliated Lifton Institute for Media Skills are expected to announce a formal agreement in the next couple of weeks, under which the institute will teach the would-be crews how to make movies and TechTown will teach them how to become entrepreneurs to sell their services.

“Everybody in the film industry has to be an entrepreneur because everybody is a freelancer,” says Randal Charlton, TechTown’s executive director. “They have to be. There are very few long-term gigs.”

Jimmy Lifton, president of the studio and institute, grew up in the Detroit area, then moved out to Hollywood to work in the film industry in the ’80s. He came back to Michigan about four years ago with the hopes of launching his studio. Michigan’s tax incentives made it easier for him to convince partners that, yes, this state really can be a center for filmmaking. He recently graduated his first class of about 100 students, whose average age is about 40. So, these are people whose auto-industry jobs were cut off in mid-career, but whose skills can translate easily into filmmaking. Lifton says he’s doing very little training from the ground up, but more retraining of existing skills.

Take, for example, people who formerly worked in computer-aided design for the auto industry. That is a skill that lends itself to digital effects and animation in the film industry—a skill that is increasingly in demand in the age of Avatar.

“These are people that have 20 or 25 years of design experience,” Lifton says. “Twenty years of design experience at Chrysler. Well, that translates immediately into the art department.”

Digital media training, Lifton says, is an increasing focus at his institute because of the demand. He says he knew he would find great, untapped skills in the Detroit area, but … Next Page »

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Barry Sandrew, who was once a staff neuroscientist at the Harvard Medical School, now presides over one of the fastest-growing companies in San Diego—with a business that has nothing to do with medical research.

As a matter of fact, the company known today as Legend 3D no longer resembles the digital colorization studio that Sandrew started here almost nine years ago (with $6 million in venture funding from what is now Boston’s Par Investment Partners). Legend 3D has about 260 employees at its San Diego headquarters, which is 100 more workers than it had here last year, according to Sandrew. And Legend 3D has another 700 employees in Patna, India—and plans to increase that number to 1,200 in coming months.

So what does Legend do now? What began in 2001 as Legend Films, one of Hollywood’s leading technology centers for digital movie colorization, has morphed seemingly overnight into Legend 3D, a fast-growth business that specializes in digital 3D conversion of TV commercials, feature films, and previously released movie titles. Sandrew calls it the “dimensionalization” of cinema, and he says studio demand for the technology is exploding.

The San Diego company completed work for Disney in February on about 25 minutes of 3D footage for Tim Burton’s “Alice in Wonderland,” and is working on three new feature film projects for Dreamworks, along with other major projects. “We have been turning away work,” Sandrew says. “We just don’t have the capacity. But we are moving to have the capacity.”

As anyone who’s been to the Cineplex knows, the reason for the rush to 3D is Avatar—the 3D science fiction epic written and directed by James Cameron. Avatar ranks as the highest grossing film in history, having generated nearly $748.5 million in domestic box office receipts and $2.7 billion worldwide, according to Box Office Mojo.com.

But what Sandrew refers to as a “tsunami” in 3D filmmaking has been building in … Next Page »

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Seattle-based MOD Systems, a digital-media delivery company, announced it has made deals to distribute videos from Warner Bros. and Paramount Digital Entertainment via downloads to SD (secure digital) cards in retail stores. MOD is demoing its video downloading technology at the Consumer Electronics Show in Las Vegas, together with Toshiba, which was one of the companies involved in a $35 million investment in MOD announced in September.

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[Addendum, 10/6/08: RealDVD has been offline as of this weekend---the result of a restraining order requested by the Hollywood studios and granted by a federal judge. The RealDVD site says, "Due to recent legal action taken by the Hollywood movie studios against us, RealDVD is temporarily unavailable. Rest assured, we will continue to work diligently to provide you with software that allows you to make a legal copy of your DVDs for your own use."]

Last week, we reported on the lawsuit filed by the big Hollywood studios against Seattle-based RealNetworks—and Real’s countersuit against Viacom and the DVD Copy Control Association. At issue is whether Real’s new DVD-copying software, RealDVD, violates digital copyright law, as the Motion Picture Association of America contends. The software, which has been on sale since last Tuesday, enables users to copy DVDs to their computer’s hard drive and a limited number of other computers.

For some informed local reaction, I reached Seattle-based Cozi’s chief technology officer, Bill Baxter. He knows a thing or two about digital rights management, having been the founder of Snaptune, which some described as “TiVo for the radio.” True to form, Baxter had some compelling thoughts on the impending court case, and on the interpretation of copyright laws for digital media.

“Real has a rich history of pushing ‘fair use’ to the limit,” Baxter writes in an e-mail. “Real Jukebox was the industry’s leading tool for enabling illegal file sharing to reach massive scale. Real Jukebox made ripping CDs very easy and, hence, accelerated the illegal file sharing revolution. But, were there substantial non-infringing uses of it? Yes. Hence, they could not get in trouble. Here, I think they have a similar opportunity. At least in this case, they do not allow ripping to non-DRM’d movie formats. Therefore, it is highly unlikely this could result in a legal way to power illegal file sharing networks.”

Here’s the problem: “I think there are two questionable features of RealDVD,” says Baxter. “First, and this has nothing to do with copyrights, per se, did they violate the DRM protections on DVDs meant to allow copyright holders to control their content? If so, they are in violation of the DMCA [Digital Millenium Copyright Act]. I think it is clear that they have. Second, they seem to be gaining monetary advantage by enabling multiple PCs to view these ripped DVDs, for which they have circumvented copy protections. I think the studios would rather set the rules for how many PCs and for how long can a user watch a DVD. You see this in legal alternatives like iTunes and now, more recently, TiVo. I think this may expose them to liability. Real is going to argue… ‘fair use.’ The MPAA is going to argue that it violates the DMCA. Fair use is not an argument you can use to defend against the DMCA. Real is in trouble.”

But the case strikes at the heart of an even deeper issue: what constitutes “fair use” of digital media? “In my mind the biggest problem is that U.S. copyright laws and the DMCA are so antiquated or are so inflexible in protecting legitimate technologies that the only recourse is to litigate,” says Baxter. “Ignoring the alleged DMCA violation for the moment, it is clearly the case that anyone who uses RealDVD is violating U.S. copyright laws. The question that must be asked is whether the copyright infringement constitutes a ‘fair use’ infringement. There are four tests that were established by the Supreme Court that must be applied in order to determine if the infringement is fair use. These tests are vague at best and require a court to address and, most likely unless there is a negotiated settlement, it will land in the Supreme Court. A company like RealNetworks has deep enough pockets to fight this battle. Because of this cost, small technology companies are squashed because they cannot afford it.”

“If the substantial application of RealDVD is deemed to not fall under the fair use doctrine, then RealNetworks could be found to be a contributory copyright infringer which makes it liable for all the infringements of its users,” Baxter continues. “I hope it goes to the Supreme Court. I hope consumers win by being given more control over their content. If I buy a DVD, I should be able to rip it and watch it anywhere, on any device and any time I want to. I should not be limited to watching that movie on a DVD, which the MPAA hopes will get scratched, lost, etc., which implies I will have to pay for again the content I’ve already purchased.”

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Digital rights management, here we go again. First, it was the music industry. Now Seattle-based RealNetworks and Hollywood’s big movie studios are suing one another in California federal court, after yesterday’s release of RealDVD on RealNetworks’ site. The software, which costs $30, allows DVD users to make copies of their videos on their computer and transfer the copies to no more than five other computers (paying an extra $20 for each). The studios, which include Disney, Paramount, Sony, Twentieth Century Fox, NBC Universal, and Warner Bros., assert in their complaint that RealDVD violates the Digital Millennium Copyright Act, and are asking for a restraining order on its sale.

RealNetworks saw this coming, but went ahead with its release anyway—and fired back with its own lawsuit. In a statement, the company said, “RealNetworks took this legal action to protect consumers’ ability to exercise their fair-use rights for their purchased DVDs…We are disappointed that the movie industry is following in the footsteps of the music industry and trying to shut down advances in technology rather than embracing changes that provide consumers with more value and flexibility for their purchases.”

The reaction in the media so far has been fairly non-committal. The New York Times and others point out that RealNetworks thought its software would be legal, in part because of a recent court case involving Kaleidescape, a maker of media servers, in which the ruling was favorable towards media duplication. The Los Angeles Times says the case may hinge on the exact wording of the license RealNetworks obtained from the DVD Copy Control Association; the article quotes Stanford law professor Mark Lemley as saying, “If Real has a legitimate license to do this under the contract, the circumvention claim goes away, because they’re not cracking the encryption system.”

Meanwhile, the Seattle P-I says the suit is about the money, not the copyright law. Which, of course, it is—movie studios and retailers stand to lose up to $16 billion in annual DVD sales (2007 figure from the Digital Entertainment Group) if people can just borrow or rent the discs and copy them instead of buying them. The impact on DVD rentals, a $7.5 billion market, is less clear.

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Over the past couple of weeks, I’ve been exploring the relationship between tech startups in Seattle and investors in the San Francisco Bay Area. We ran a story about what Seattle entrepreneurs can do to attract more attention from Bay Area VCs, and then a follow-up about whether there might be a brain drain of early-stage startups from Seattle heading south in search of funding. The pieces have generated some pretty spirited feedback.

One of the most provocative responses I got was from Shan Sinha, an MIT alum, former Microsoftie, and co-founder of DocVerse, a collaborative-document software firm originally based in the Seattle area. This summer, Sinha and fellow co-founder Alex DeNeui raised $1.3 million from Bay Area investors and relocated their company to San Francisco. Sinha has a very interesting take on Seattle versus San Francisco, for early-stage entrepreneurs. “After reading your article, most of the folks seemed to espouse a viewpoint that there is no advantage to being in the Bay Area and that starting a company and trying to raise money from Seattle is straightforward. There also seems to be a second thread through your anecdotes attempting to espouse that Seattle investors were plentiful and competitive,” he writes. “Our experience did not support either of those observations.”

For balance, I should point out that I recently spoke with data-visualization firm Tableau Software, which moved from the Bay Area to Seattle a few years ago because its founders wanted to live here. So it’s not like there’s an exodus of startups in one direction, or any big trend yet—these are just individual cases. (But I am curious to hear what others have to say, particularly those on the early-stage side of things.)

Sinha wrote, “We moved to the Bay Area for the same reason why people move to Hollywood to make movies. The Bay Area is for startups what Hollywood is for movies. Starting a company is hard enough, not being in the Bay Area is just introducing another hurdle in an already risky endeavor. Why not eliminate as much risk as possible? Any reasoning to justify not being in the Bay Area is a rationalization, in my opinion (often times valid… like “my family is rooted here”… but nonetheless a rationalization that must be overcome).”

He then fleshed out four concrete observations from his experience. The most interesting part to me is his discussion of meeting logistics—trying to build relationships and do deals from afar—as well as the idea that Bay Area VCs move faster and may be more willing to take risks. But I’ll let Sinha speak for himself:

— “Bay Area investors are made of a different ilk than anywhere else. In our experience Bay Area investors just moved at a different velocity. There were some exceptions…we did meet some amazing folks in Seattle … Next Page »

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U.S. residents have access to a growing number of online video portals, such as Movielink, Cinemanow, and Apple’s iTunes store, where they can buy or rent movies for download on the same day they’re available in retail stores on DVD. Thanks to the complexities of international licensing, however, most of these services aren’t accessible to people outside the United States. But yesterday Bell Canada, with help from Newton, MA-based video software company ExtendMedia, launched the Bell Video Store—the first site in Canada to offer same-day movie downloads, and the first telecommunications company anywhere to do so.

“Bell is farther ahead than a lot of telcos down here,” says Keith Kocho, president and founder of ExtendMedia, whose “OpenCase” software runs the video store’s back end—pulling in content, presenting an online catalog, handling customer transactions, encoding the content for download, and then playing it on customers’ computers. “But I think you’ll see more of them down here [offering Internet video-on-demand] too.”

In fact, ExtendMedia’s whole business is to provide hosted or turnkey video delivery systems to companies that want to get into the Internet video market, and Kocho says the company expects to announce more partnerships similar to the Bell Canada deal soon. Unlike many competing platforms—including software from local competitors like Maven and Brightcove—OpenCase is agnostic when it comes to business models and delivery methods, according to Kocho. It can handle download-to-own movies, time-limited rentals, and free ad-supported downloads (it’s been handling the latter for NBC Direct since this winter). It can send movies to almost any type of computer or media player—including video iPods, Archos media players, and the Xbox 360. “We’re a little different from most other folks,” says Kocho. “Our service was purpose-built to let customers choose the business model they want.”

The Bell Canada deal isn’t surprising, given that ExtendMedia has production facilities in Toronto and previously assisted the company with its video-on-demand coverage of World Cup soccer matches. Moreover, Kocho himself is Canadian, and admits to subscribing to cable sports channels “mainly so I can watch the Maple Leafs fall on their swords every year.”

But “it’s an interesting time,” in Kocho’s words, and video-download options are only going to multiply over the coming months. “We have long maintained that the large service providers will have to start to give into the pressure created by services like iTunes and launch direct entertainment services over the Internet,” he says. “But a lot of the companies that wanted to follow that lead earlier found there were a lot of barriers: incompatible devices, low-quality viewing experiences, people’s unwillingness to pay for a service that was going to be bound to a particular computer. Slowly but surely, those things are breaking down. Bell is one of many companies that we expect to see come into the mainstream.”

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First there was fantasy baseball: competitions where participants buy rosters of athletes at the beginning of the season and watch their imaginary teams rise and fall in the “standings” based on the real players’ statistics. Then came fantasy football, fantasy basketball, fantasy name-your-sport, fantasy investing (e.g. The UpDown) and even Fantasy Congress—in short, a fantasy league for almost every public activity that generates a continuous stream of data. Perhaps it was inevitable, then, that someone would figure out how to score the shenanigans of our beloved celebrities, from Britney to Brangelina, and make them fodder for a fantasy celebrity league.

The honor for achieving that feat goes to Fafarazzi, a creation of Somerville, MA-based Web startup Eastland Media. The name is a combination of “fantasy” and “paparazzi,” and the site itself is a gloriously wicked combination of celebrity gossip and serious mathematics.

Co-founder Todd Galloway, who gave a brief presentation about the site at Monday night’s Web Innovators Group event in Cambridge, says the site grew out of the dual realizations that existing fantasy-sports fans might enjoy applying the fantasy-league model to realms outside sports and that celebrity hounds can be just as intense about their obsession as fantasy-league addicts. “All of my guy friends were playing in five or six different fantasy football leagues, and as far as I could tell that was the only thing they did at work all day,” says Galloway. “At the same time, my sister Megan had just started a new job, and she said it seemed like the only thing her friends did all day was read the gossip blogs. Some friends and I had been talking about why there isn’t a fantasy league for real-world stuff, and so we started talking about scoring celebrity gossip.”

Great idea—but how it would it work? Celebrities don’t score home runs and touchdowns, after all. The answer, it turned out, was blowing in the blogosphere. For the first six months after the site was born in mid-2006, Galloway and his sister would monitor a set of celebrity gossip blogs manually, alotting points for every event in a celebrity’s life. “In fantasy football, a touchdown earns a certain number of points. In celebrity gossip, a dating rumor might be worth a point or two, but if you get married or have a baby it would be like eight points,” Galloway recounts.

The original scoring method was “fun,” but it was also both highly subjective and time-consuming, Galloway says. “So we started an experiment where we monitored the blogs automatically and based the scores on the number of mentions per celebrity. It turned out that it pretty much jived with the manual scoring we were doing.” So Todd and Megan (who run the site together) turned the work over to their software, which continuously analyzes the RSS feeds of about 40 celebrity blogs and news sites such as CNN Entertainment, E! Online, Star Pulse, and TMZ, and PerezHilton.com, tracking about 500 celebrities and awarding one point to a celebrity for each mention of his or her full name.

The pair now devote their time to business development and cultivating the community features of the site, which has “tens of thousands” of registered users, according to Galloway. Banner ads generate revenue for the company (although Galloway isn’t saying how much), along with the fees paid by the “commissioners” of invitation-only “VIP leagues.”

Players earn “trophy points” if they finish a season in first, second, or third place in their league. Members of VIP leagues can convert trophy points into Amazon gift cards, but everyone else plays simply for bragging rights and a position atop the site’s leaderboard.

Among the site’s other attractions are graphical tools that allow users to compare celebrities’ blog scores over time. I will admit to making a graph pitting “Grey’s Anatomy” star Isaiah Washington, now infamous for his allegedly homophobic remarks about fellow star T.R. Knight, against Patrick “McDreamy” Dempsey, who allegedly came to Knight’s defense in a near-fistfight. (Washington’s numbers have sadly overshadowed Dempsey’s for more than six months.)

In August, Eastland Media launched a companion site for Fafarazzi called Dirtlocker, managed by Marc Hedegore from the company’s Cleveland office. The new site completes the fantasy-league circle by giving users the chance to trade on gossip about sports celebrities.

“It’s exactly the same model as Fafarazzi, except that our database is a lot bigger, with about 7,500 athletes tracked on 46 blogs,” says Hedegore, who also tends bar at an undisclosed location near Browns Stadium. “Fantasy sports has a pretty fanatical following—people spend a lot of time researching and analyzing their teams. For the people who are really into that, it’s easy for them to join one of our leagues, because they’ve already got all this sports information at the top of their heads.”

Eastland Media is a highly distributed company, with Todd and Megan Galloway and co-founder Chris Keller in Somerville, Hedegore in Cleveland, and Dirtlocker community manager Jon Sistowicz in Philadelphia. It’s useful to have the company’s center of gravity in a sports-crazy region like Greater Boston, says Galloway. “We’ve met a ton of people, and it’s very beneficial for us to be here.”

So, how long before Eastland launches a fantasy business league, with users bidding against each other for draft picks like Steve Jobs and robots scoring blog mentions on TechCrunch and Xconomy? For now, Galloway is staying coy. “Believe me,” he says, “we’ve thought about all the different ways we could apply this.”

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Quick, which local company’s name is more recognizable in Hollywood than it is here in Massachusetts? A gold star for you if you answered “Avid Technology.” Among filmmakers and TV producers, the Tewksbury firm’s Avid Media Composer brand is virtually synonymous with nonlinear film and video editing, the digital-age version of the cut-and-glue techniques used for decades to arrange film clips on celluloid.

But the company isn’t winning any stars for its recent performance. Its stock (AVID) hit a 52-week low on the NASDAQ yesterday, capping a difficult month marked by the resignation of embattled CEO David Krall and a quarterly earnings report on July 26 that detailed slow revenue growth and an overall operating loss.

For the three months ending June 30, Avid reported a net loss of $6 million on revenue of $225.3 million, compared to net income of $2.7 million on $222.2 million in revenue for the same period in 2006. Krall called the numbers “solid” and “in line with expectations,” but at the same time the company announced a restructuring that will eliminate 150 jobs in the company’s video division.

After breakneck expansion and a string of Oscar-winning technical achievements in the 1990s, Avid now faces increased competition from consumer-oriented rivals in both of its core markets—professional and consumer film and video editing—as well as computer graphics, an area it entered with the acquisition of former Microsoft subsidiary Softimage in 1998. If the company can’t find new leadership and innovate its way out of its current stagnation, some observers say, its falling stock value could leave it vulnerable to takeover.

In the world of professional video post-production, Avid’s Media Composer is still dominant, with more than 90 percent of members of the American Cinema Editors saying they still use the system in a late-2006 survey. But Apple’s Final Cut Pro is creeping up on Avid’s product, especially among independent film and video producers outside of Los Angeles and New York. Even some Hollywood movies, including director David Fincher’s 2007 film Zodiac, have been edited using Apple’s system.

“For a long time, [Avid] has been dismissing Apple’s product as not customizable enough or not sophisticated enough, but it certainly seems that professional video producers and moviemakers are embracing it,” says Irina Logovinsky, an analyst who follows Avid for Morningstar. Logovinsky notes that NBC, CNN, the BBC, and MTV have also begun to supplement their traditional Avid editing suites with Apple software. “Users actually think Apple’s products are easier to use than Avid’s, and on top of everything else, Apple’s products are cheaper.”

It’s possible, as the broadcasting industry goes entirely digital, that demand for professional digital video editing solutions will increase fast enough to keep Avid afloat, Logovinsky says. But the company also faces a challenges on the consumer side. Avid’s Pinnacle Studio—added to its product line after the August 2005 acquisition of Pinnacle Systems—competes directly with popular Apple offerings, including iMovie HD and iDVD, which come pre-loaded on new Macintosh computers.

Avid is also working to stay competitive in professional computer graphics. A new advanced version of Softimage’s 3D animation software package, Softimage XSI 6.5, will be cheaper than previous versions and will have more features for rendering crowds and character behavior, the company announced yesterday at the SIGGRAPH 2007 computer-graphics conference in San Diego.

But that news didn’t seem to budge Avid’s stock, which hovered between $30 and $31 yesterday, its lowest level since mid-2003. The stock has taken a severe tumble since reaching a high of almost $60 in January 2006. Analysts blame part of the decline on Krall’s handling of the Pinnacle acquisition. The company paid $462 million for the 800-employee company, representing a 30 percent premium over Pinnacle’s stock price at the time; a year later, in the fourth quarter of 2006, Avid was forced to take a $53 million write-down to reflect the difference between the “goodwill” value Avid had assigned to Pinnacle and the division’s actual fair value. “It’s basically another way of saying, ‘We paid too much for Pinnacle,’” says Logovinsky.

Krall’s resignation took effect July 31. He is succeeded by interim CEO Nancy Hawthorne. Logovinsky says Morningstar won’t revise its estimate of Avid’s fair stock value downward or upward until the company has found a permanent replacement. “We think they have lost some of their competitive strength, and we don’t know if they’ll be able to regain it or not,” she says.

Avid wasn’t able to immediately accommodate Xconomy’s request for comment.

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