Hollywood big screen in an instant message

By Matthew Garrahan in Los Angeles
Published: June 30 2008 03:00 in FinancialTimes.com

Hollywood studios have turned to a web start-up to generate new revenues from film and television content in a deal that will allow e-mail, instant messaging and social network users to send short film clips to each other.

PopTok, which is backed by Mickey Schulhof, the former chief executive of Sony America, launches in test mode today with a library of clips capable of being used in messaging tools.

The service is similar to the emoticons used in instant messaging applications, such as Skype.

But rather than sending an emoticon of a smiley face, PopTok users will be able to send short clips from television programmes and films such as Austin Powers , Scarface and Basic Instinct .

The company has struck licensing deals with CBS, Lionsgate, Paramount Pictures, SonyBMG, Universal Pictures, Warner Brothers and Warner Music.

Scott Kauffman, a former Yahoo! executive who has become PopTok's chief executive, said the company would help content owners increase the value of their library titles.

"This an opportunity to breathe new life into content," he said. "[Mobile phone] ring tones did that for the music industry and we are doing it for video." PopTok, he added, would "change the way we communicate online".

PopTok is being backed by Jerusalem Venture Partners, an Israeli media-focused venture capital firm headed by Erel Margalit and GTI Group, which is run by Mr Schulhof.

Illi Edry, who founded PopTok, said the company hoped to tap into changing trends in online communication.

"People are constantly quoting lines they hear in popular movies, TV shows, and music," he said. "But people have migrated online. We will take these quotes and allow people to use them in their online conversations."

The company aims to generate revenues from advertising and also hopes to tap into the $500m-a-year Hollywood studios and TV networks spend on promoting their content. Clips from trailers promoting new films could also be used on PopTok, Mr Edry said.

The service works with most existing instant messaging and e-mail applications. PopTok plans to expand its capability to include mobile phones and social networks.

"The entertainment community really views this is as an opportunity," Mr Kauffman said. "It's an opportunity to monetise back catalogues and promote new releases."

Copyright The Financial Times Limited 2008