To start with, I'm putting some interesting articles that I came across. Take a look -

Three-Minute Moguls (from December 2005, Businessweek)

Can a converted barbershop off a main drag in Santa Monica, Calif., really be the new epicenter of entertainment? Evan Spiridellis, 31, a director, takes his spot in front of a computer on this December afternoon as his team of twentysomething computer animators puts the finishing touches on his latest creation, 2-0-5. The two-minute film is a none-too-subtle lampoon of President George W. Bush's 2005 lowlights. Set to a banjo rendition of Auld Lang Syne, the short features a marionette-like Dubya bouncing from one calamity to another singing "there's a special investigator after my friend Karl." Along with his 34-year-old brother, Gregg, Spiridellis runs JibJab Media Inc., a onetime commercial animation house that first became an Internet hitmaker with the 2004 election spoof This Land. Now, feverishly working his computer's mouse as the President tiptoes sheepishly through Iraq, Evan is rushing to make a deadline: Jay Leno wants to see a finished version for The Tonight Show.

By the time 2-0-5 aired on NBC on Dec. 15, the film was already on its way to becoming an Internet smash. "We were seeing a huge spike in traffic," says Rob Bennett, product manager for video, TV, and movies at MSN, which licensed JibJab's short to be shown on the online service. Within two weeks, about 2 million additional folks watched it directly on JibJab's Web site, says Gregg Spiridellis.

Those may not be the blockbuster numbers of, say, a Spider-Man or Lord of the Rings, but six years after the Internet bust dashed hopes that original movies and shows would fly in cyberspace, online production is back. And it's not being fueled by Hollywood suits and high-priced directors like Ron Howard and Tim Burton who crowded the Net in 1999. Today a small army of computer jockeys from Santa Monica to Brooklyn is quietly creating a New Hollywood by conjuring up hundreds of short bursts of animated or live-action entertainment from their second bedrooms or kitchen tables.

AD MAGNETS

Even though the online flicks can be crass, irreverent, even downright gross, companies such as Ford (), Miller Brewing (), and AT&T () are taking notice, placing products in the films themselves or running ads next to the videos. Going a step further, companies eager to connect with a younger audience are hiring these new filmmakers to create commercials. "It is becoming a business instead of a pastime," says Frank Dellario, a co-founder of Brooklyn's ILL Clan Productions, which has created shorts for MTV2 and other channels and commercials for Audi.Improved broadband speeds and penetration, as well as growing demand for content for wireless devices and game consoles, are giving the genre a boost. Soon, plans for Internet protocol TV (IPTV) by giants like Google () and Yahoo! (), which lets viewers see shows on both TV and computers, could create an even bigger opening. In fact, edgy fare is precisely what's connecting with teenagers, college kids, and, increasingly, older folks getting hip to the Net's vast offerings. "There's a wealth of cool content out there that plays well with our demos," says David Cohn, general manager of MTV2, which airs the shorts on its show Video Mods.

As with any kind of fringe media, these new filmmakers pride themselves on producing their work on the cheap. Three-minute shorts can cost as little as $1,000 and rarely more than $50,000 to produce. They often star girlfriends or feature the voices of out-of-work comedians. And because it costs so little to get started -- a computer, some software, and a digital camcorder -- there's no shortage of counterculture Spielbergs flooding the Net. Atom Entertainment, founded in 1998 and today the reigning site of this category, has 6 million monthly visitors to its various Web sites that act as a distributor for the films, much like a cable channel. Atom pays as little as $500 per short, say online producers. But the site also gives content creators a small cut of the ads preceding their flicks. That can mean popular shorts can make more than $200,000, says Atom Entertainment Chief Executive Officer Mika Salmi.

BOTTOM DOLLAR

Still, it's a tough way to make a living. The hippest Web sites of the moment, like MySpace.com, purchased by News Corp. () ()last summer, build communities of young videophiles by offering viewers a chance to show their work. That free content drives the price down for even the hottest pros cranking out films for the Web. "It has become like independent filmmaking," says Internet investment banker Michael Montgomery. "The good ones will get attention and money. Lots of others get nothing." It has also created a rarity among the online crowd: bidding wars. Last year, JibJab left AtomFilms to jump to MSN after the site agreed to host JibJab's advertising on its servers.

Internet filmmaking also serves as a showcase for directors eager to hit the big screen. Jason Reitman, the 28-year-old son of Ghostbusters director Ivan Reitman, says he was able to raise money for his upcoming independent film, Thank You for Smoking, in part because of the attention he got from three live-action films he made for AtomFilms. Icebox Inc. is producing one of its shorts, Queer Duck, into a full-length movie for Paramount Pictures Corp. () More telling, Creative Artists Agency Inc., which represents such directors as Steven Spielberg and Robert Zemeckis, now represents the JibJab brothers.

Some of these newbies, however, say it's best to keep some distance between the old and new cultures. By steering clear of large studios, John Evershed, CEO of Mondo Media, says he has gotten better deals from smaller middlemen to distribute DVDs and merchandise based on Mondo characters. Its hit short, Happy Tree Friends, in which cute critters are often torn to pieces, has sold more than 500,000 DVDs through stores like Blockbuster and Best Buy. And its stickers, key chains, and plush toys are big sellers in retail chains like teen-centric Hot Topic. "Large media companies have their own way of doing things," says Evershed, "and it's not always the right way for us." Now there's a creed for the alternative Hollywood.
By Ronald Grover

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France: Thousands of Young Spielbergs (Machinima -- making movies using video game software -- starts to explode )

Alex Chan simply wanted to make a political statement, countering what he deemed inaccurate coverage of the riots in French suburbs. Instead, the industrial designer created an emblem for a hot new form of entertainment. Working on his laptop with software from a $70 video game -- a technique called machinima -- Chan made a rudimentary but powerful 12-minute animated film about racism, The French Democracy, that is winning applause worldwide. "What I love is how neatly it blends the culture of games with the aesthetics of film," says Clive Thompson, a journalist in New York who has written about machinima and runs a well-known blog on technology and culture.

Since it emerged in the late 1990s, machinima has been the playground of mainly hard-core gamers who cobble together characters and sequences from favorite games, adding voice-overs laced with references that only fellow gamers can grasp. But with more user-friendly software tools on the market, novices can create their own narratives. That will democratize the movie business, machinima enthusiasts say. Anyone with a computer and off-the-shelf game software can now make and distribute animated movies over the Internet. "This is to the movies what blogs are to the written media," says Paul Marino, executive director of the Academy of Machinima Arts & Sciences, a New York nonprofit.

Many entertainment executives see machinima as an opportunity rather than a threat. One is Evan Shapiro, general manager of Independent Film Channel, a unit of Cablevision Systems Corp. () that reaches 36 million U.S. homes. IFC has sponsored a machinima film festival and commissioned six films from animation companies such as the ILL Clan and RoosterTeeth Productions. The films are cheap and appeal to IFC's tech-savvy viewers, Shapiro says. "This is grassroots moviemaking at its best."

1 MILLION HITS
Chan produced his film using a video game called The Movies, in which players make their own films. He then posted the film on a site hosted by the game's developer, Lionhead Studios Ltd. of Surrey, England. The site is hot: Within three weeks of the game's November release, users posted more than 15,000 films. New ones are being added at a rate of one per minute. The French Democracy helped the site hit 1 million unique viewers in the past month.

No one is more astonished than Chan. The 27-year-old from the Paris suburb of La Courneuve was upset by news reports suggesting the violence was linked to Islamic fundamentalism. The film weaves together the experiences of three dark-skinned characters, all French citizens, to back Chan's contention that racism was a key reason for the riots. "I wanted to get people to understand why this happened," he says. It's not a polished work of art: The street scenery provided by The Movies is in Manhattan, so Chan's French characters act against a backdrop that includes the Empire State Building. Still, the film packs an emotional wallop.

The buzz over the film could help Hollywood and machinima move closer together. Directors George Lucas and Peter Jackson already have tried the technique for special effects. Who knows: The maker of the next blockbuster may be hunched over a computer right now, ignoring Mom's calls to dinner.
By Carol Matlack, with Ronald Grover in Los Angeles

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Views on the Digital Age ( I think this is from Business week too :-))

“PAIN is temporary, film is forever.” That hopeful thought, which found its way into the original script of Peter Jackson's recent re-make of “King Kong”, might be seized upon by today's beleaguered entertainment industry. Media companies are suffering intense pain—and it is starting to seem worryingly permanent. In America shares of “old” media firms such as News Corporation, Comcast and other giants of television, film, radio and print, have fallen 25% behind the S&P 500 in the past two years, despite some heroic financial results. Meanwhile, the market value of Google, which made its debut on the stockmarket in 2004, is now equal to the combined worth of Walt Disney, News Corporation and Viacom, three beasts of the old media jungle. One investor, who recently moved two-thirds of his $1 billion fund out of American media and into emerging-market companies, moans that “the market thinks something's going to get them, whether it's piracy, personal video recorders, or Google.”

Desperate to rescue its share price, Viacom broke itself in two on January 3rd. Time Warner, the biggest media group of all, is under attack from Carl Icahn, a corporate predator perfectly adapted to sniff out the weak and vulnerable. The big groups have seen their newspapers and magazines lose readers and advertising to the internet; their music businesses suffer piracy and falling sales; and someone else's video games captivate new generations of consumers. Now come fears about film and TV, the bedrock of their business.

Hollywood took 7% less at the box office in 2005 than in 2004 and growth in sales of DVDs has slowed. Internet video threatens the satellite and cable systems of companies such as News Corporation and Time Warner. Dozens of advertisers are shifting budgets from television to such places as the internet and billboards. Brand-owners hate it that people are using digital video recorders to avoid their pitches. And if media firms move on to the internet themselves, they risk losing their films and television programmes to pirates.

Moguls still
No wonder that on media island they are downcast. Yet, if Hollywood teaches one thing, it is that stories can be re-made and dreams can come true. Rather as big retailers, including Wal-Mart and Tesco, have discovered advantages online, so too will big media companies.
True, the internet and digital devices will eventually break those companies' grip on distribution. But they gain something else: a digital world in which what you supply matters far more than how you supply it. In satellite radio, for example, Sirius has crept up on XM Satellite Radio thanks chiefly to its content, in the controversial form of Howard Stern. And this world holds another promise, too: an abundance of virtually costless ways to supply consumers with what they want to watch, whenever they want it—things established media are ideally placed to provide.

The internet is still in the digital equivalent of the silent-film era. It has been formidable for text, still images and music, but is only now, with broadband access, entering an age of high-quality video. As it does so, Time Warner, News Corporation, Disney and other media companies will be able to cash in on their film and television archives. Selling video direct to consumers, without distribution getting in the way, lets media firms, and viewers, mine their vaults for old episodes of “The Outer Limits”, Johnny Carson, or whatever: minority tastes, to be sure, but taken together, a vast new market.

Moreover, old media will command audiences for many years yet. New media understand this: Google has just bought dMarc, which sells old-fashioned radio advertising. Websites, such as BabyCenter.com and AlwaysOn, have recently launched print-magazine versions of themselves, to capture advertising that was out of their reach online. As the best remaining source of a mass audience, TV and film are the best places to create and promote the next “Simpsons” or “Narnia”.

Some people worry that new media companies may over time shunt old ones aside as producers of content. Certainly, digital media will create new stars and new businesses, but making high-quality video content will always be a daunting and expensive task. Music or a blog can be composed from a bedroom, but not an episode of “Friends”. Just last month DreamWorks, Hollywood's youngest studio, sold itself to Viacom, despite its strong financial backing and the talent of Hollywood luminaries. It made some money, but could not afford a billion-dollar investment in films year-in, year-out. Yahoo! has a media unit, but so far it hasn't had any hits. Responding to the news this week that Yahoo! intends to spend up to $10m on a reality-TV concept called “The Runner”, analysts complained that the investment would damage its margins.

By contrast with Yahoo!'s dabbling, old media is now investing in digital media in earnest. It all went terribly wrong before 2000 when bewitched executives squandered money on the internet and Time Warner sold itself to AOL in one of history's worst-ever deals. But now they are back. Rupert Murdoch, chief executive of News Corporation, made a series of acquisitions in 2005 (see article). Disney is supplying two hits, “Desperate Housewives” and “Lost”, using Apple's iTunes download service. Last summer Viacom bought Neopets.com, a virtual-pets site. Old media is well placed to steer its huge offline audiences to its websites.
Helpfully on cue, piracy now seems less of a threat. The music industry now has a healthy business in legal downloads. Operators of peer-to-peer networks, such as eDonkey, are going straight. And Hollywood is realising that it has no equivalent to a big musical weakness—that many albums consist of a few decent tracks padded by dross.

Any media business has two products to sell: its content (to readers and viewers); and its audience (to advertisers). The task for old media is first to protect its advertising revenues by amassing audiences online and, second, to offset their viewers' intolerance of mass-advertising by making them pay more for content—which they are increasingly willing to do. It will not be easy, but then saving the heroine never was