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Interview with Michael Wayne, DECA

Southern California has seen a surge in investments in entertainment-related, online content ventures in recent months. One of the latest companies to appear is DECA (www.deca.tv), which was cofounded by Michael Wayne and Chris Kimbell, who were both recently at Sony. DECA recently closed a round of funding from Mayfield, General Catalyst, and Atomico, the investment firm run by Skype founder Niklas Zennstrom. We spoke with Michael, who is the firm's President and CEO, about how the firm fits into the online entertainment world. Michael spoke with socalTECH's Ben Kuo.

What's the story behind DECA?

Michael Wayne: We're a company that I founded with my business partner, Chris Kimbell about six months ago. We closed our round of financing in July, and have just started launching some projects. BoingBoing TV is probably the first big project we've launched. To give you the 20,000 foot view of the company, we're basically a studio. The model comes from the historical, traditional Hollywood studio model. We provide financing and infrastructure, marketing and distribution for ideas. In our case, these aren't TV shows or movie ideas, but are web businesses--digital entertainment properties. So, we might have someone like the BoingBoing guys, who are very creative, and who have a brand, and who want to explore developing that brand into video and media, and we will provide the infrastructure, put up the money, and have a studio with cameras, equipment, office space, technology and legal, and finance and development, and other infrastructure to help make those ideas a reality. We are also developing ideas from scratch. BoingBoing is an example of someone who already has a brand, and we are developing it to the next level. There are also lots of examples where we will launch new ideas and brand new brands.

So do you own the content after you produce it?

Michael Wayne: We do own the content--it's like the historical Hollywood business, which is intellectual property ownership.

What's your background, and how is your company different that the many online entertainment companies which have been cropping up recently?

Michael Wayne: My background is as a traditional entrepreneur. Out of college, I started a magazine, and then I went into traditional media for a short time. I worked for ABC Television in New York, and met Dave Goldberg, who started Launch out here, which I joined in 1998. Chris Kimbell also joined in 1998. For four plus years we worked on the Internet side of things, myself on business development, and Chris on product development. We became Internet guys at that point. We were around for all the fundraising, taking it public, and through when we sold it to Yahoo--Launch is now Yahoo Music. We participated in the evolution of content on the web--from the production side, as well as the advertising side, and the media side. After that, Chris and I went to work for Sony Pictures Digital. I was always interested in the studio side of creating content, whereas Launch was a media company, which aggregated content and sold CPM-driven media and advertising against the property. Going to Sony, it was not a media company, it was an entertainment company. They don't own broadcast or cable in the U.S., they don't own a broadband portal such as Yahoo, or any other online media play. It was a great learning experience, to learn about how content was created--mainstream content for TV and movies. I was there for four and a half years, as was Chris. We were in a role working with advertisers to establish new brands and new formats online, and it just made sense to take the show on the road and do it ourselves. There are lots of opportunities.

Where we're a little different is we're Internet guys. Even when we were at Sony, we were always on the periphery of the core businesses they have, which are music and television. We're a little different from other people trying to do this, who have pretty serious Hollywood pedigrees, for example Michael Eisner, Lloyd Braun, and Will Ferrell. There are lots of people, but not a lot of people who have been Internet guys from the beginning, and who have been working for ten to twelve years evolving the Internet as a platform for content.

Is online content at the point where you can make money at this?

Michael Wayne: I think so. It depends on what you define entertainment as. Entertainment has traditionally been going and watching movies and television--I'm guessing when you were a kid, you watched reruns of the Brady Bunch. I think now, the younger generation does so much more than passively sit and watch TV. The essence of the whole entertainment is evolving. I think it's not going to change overnight, but if you look at entertainment from a broad view, not just video--we are taking our cues from reality television, but also taking cues from social networking. Lots of kids are entertained on MySpace. Mobile is also another facet of entertainment. There is lots of stuff going into what entertainment is today, and it's continuing to evolve. The formats will evolve even farther around new entertainment ideas. We're going to be coming out with ideas which will push the boundaries of premium video, with social media and community, and push the envelope of what entertainment is.

You've got an interesting set of investors--Mayfield, General Catalyst, and especially Niklas Zennstrom. How did you connect with them?

Michael Wayne: Mayfield lead our round, and I met both Atomico and General Catalyst through Mayfield. We really are very excited about the investors we have, not just because they are Tier 1 investment funds, but because the people who are behind the funds bring things to the table. With Mayfield, you have a quintessential Silicon Valley, established venture capital fund. In General Catalyst--which is a younger fund, I'm not sure how old, but something like 7 years old--they have roots in technology, but also are in East Coast media companies. They're based in Boston. They bring a different perspective to venture funding. Niklas and Atomico brings yet another perspective, and we're very lucky to have him involved in the business. Entertainment and new entertainment formats, have historically come to us from the UK and other countries--but mainly from the UK. So, to have an investor based in London, with the European perspective, is fantastic. All three venture funds bring different things. We look at this as a global business, and will look at ideas from anywhere in the world.

What's your distribution model--are you building your own site?

Michael Wayne: We're not interested in building a destination, and not in the short term. I think we're looking at each property we invest, and developing and marketing and distributing it as its own entity. Each will have its own set of challenges and road maps. So, in some cases we'll partner with a distribution partner--an AOL, Yahoo, or MSN--and in some cases we'll partner with a blog, like BoingBoing. In some cases, we will just launch a site on its own, and market it in its own unique way. The beautiful thing about the Internet is you don't have to partner with someone, but certainly we have people like Atomico who have created things like Joost, and we'll look to partner with them. That won't be exclusive, and we'll also look to distribute our content as far and wide as possible.


 

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