Funding Woes Seal Icebox Fate

Icebox confirmed Wednesday that it will shut its doors Friday, acknowledging its failure to close a $10 million funding round the company desperately needed to stay in business (HR 2/7).

Seemingly, Icebox becomes only the latest in a string of well-reported online entertainment closures. But its high profile among new-media press outlets and the participation it garnered from established television writers ensures it a place among the more important failures in the sector, along with Pop.com and Digital Entertainment Network.

Icebox CEO Steve Stanford said he is trying to sell the company whole and will not file for bankruptcy. The company's last funding round valued Icebox at $64 million, but, Stanford said, "That's not realistic in this environment. It's worth substantially less than that."

Among Icebox's shared assets is "Starship Regulars," an animated show from "The Simpsons" co-executive producer Rob LaZebnik that is to be made into a live-action television pilot script for Showtime Networks.

The company's business model called for the creation of animated shorts that would gain popularity online then move to TV and film. Talent like "Seinfeld's" Larry David and others well known in TV circles, traded their services for equity in the company and shared revenue generated from product they created.

The company was calling itself "the ultimate pilot incubator" and recently made much of a deal it had to turn its "Zombie College" property from "Futurama" writer-producer Eric Kaplan into a live-action pilot for Fox.

Stanford said any future revenue generated from the done TV deals goes to whomever buys Icebox.

"And there's other properties we were talking to TV about," Stanford said. "There's a lot of value in our library."

Other popular fare at Icebox — some of which created a minor controversy for their politically incorrect nature — includes "Queer Duck," "Hard Drinkin' Lincoln" and "Mr. Wong."

Icebox was among the first companies to come from eCompanies, the well-hyped incubator and venture capital firm from EarthLink Inc. founder Sky Dayton and former Walt Disney Co. executive Jake Winebaum.

"Seventy percent of our companies won't make it," eCompanies spokesman Christian Gunning said. "We don't get to choose which ones do. Market forces do that."

Icebox spent $15.4 million since it was founded 15 months ago, less than other entertainment dot-coms have spent in a similar time frame, but the company was dependent on a $10 million cash infusion that never materialized.

The company has been downsizing recently, to 27 employees from about 90

, the bulk of whom will be laid off Friday. Severance will not be paid, but employees will be given their computers and other selected furnishings.

With Icebox out of the picture, that leaves only a handful of important players left in the nascent online entertainment space, including IFILM and the soon-to-be-merged AtomFilms and Shockwave.com.

And there are still a plethora of smaller content concerns slowly making names for themselves in cyberspace like Mondo Media, considered formidable because of its ability to raise $17 million recently in a very difficult venture-capital environment. And Camp Chaos, famous for its "Napster Bad" parodies of the rock band Metallica, is humming along as well, striking a deal recently with Viacom for a 22-minute pilot, "Camp Chaos," for VH1 (HR 1/18).