Rogers to become minor stakeholder in Eisner's new web video company

TORONTO - Rogers Communications (TSX:RCI.B) is teaming up with a new web media studio headed by Michael Eisner, the former CEO of Walt Disney Co.

TORONTO - Rogers Communications (TSX:RCI.B) is teaming up with a new web media studio headed by Michael Eisner, the former CEO of Walt Disney Co.

Eisner and the Canadian media and communications company announced Monday they have formed an investment and distribution partnership that will give Rogers the exclusive Canadian rights to future projects from Vuguru, a company that launched in 2007.

Vuguru specializes in bite-sized entertainment, particularly short series that are designed to be watched primarily on mobile phones and the Internet.

The agreement will allow the production company to boost its schedule and create about 30 series per year, it said in the announcement.

Vuguru has been held within Eisner's private media investment company Tornante, which has worked with Rogers before on other collaborations.

Vuguru-produced shows have found homes on some major American media websites like Hulu, which streams network television programming like "30 Rock" and "Desperate Housewives" with paid advertisements.

Unlike the major network programming, Vuguru's shows are best described as "mini-sodes," or brief episodes of programming that can last from about 90 seconds to roughly 15 minutes.

Rogers said it will be able to use the content on its broadband web services, mobile phones and video-on-demand cable channel.

"We are thrilled to partner with Michael Eisner's Vuguru team, as they have a proven track record of making hits and producing innovative, advertiser-friendly new media content," said Claude Galipeau, senior vice-president for Rogers Digital Media.

The agreement is most notable because of Eisner's involvement. He served at Disney from 1984 to 2005, during which the company built a slate of successful franchises including "The Little Mermaid," "Beauty and the Beast."

Eisner also served during less successful ventures like Euro Disney and MGM Studios, both which have been reworked and renamed since.

"He's certainly a marquee name and he's certainly a talented and smart guy, but there's no guarantees in media," said Duncan Stewart, director of research and analysis at DSam Consulting.

"Nobody can make a hit every single time," he said, noting that the Internet has delivered few successful "mini-sode" ventures.

"When people try those things they've had limited success, but none of them have been a game-changer in the industry."

Fellow Internet production companies have had a rough go at making their businesses profitable, and many have either shut down or cut their budgets drastically, like 60 Frames and Stage 9, a company owned by Disney.

However, some ventures have found success, particularly, which is owned by Will Ferrell. The site became a household name with its first video, "The Landlord," in which Ferrell contended with his foul-mouthed, drunken two-year old landlord. U.S. cable channel HBO has a minority stake in the venture.

Vuguru is still in the process of proving its a viable business. An earlier media report suggested Rogers made a multimillion dollar investment but financial terms of the agreement weren't initially disclosed in the official announcement Monday.

The company's slate of programming includes "Back on Topps," an offbeat comedy about the sports-obsessed heirs of the Topps sports card company, who must change their slacker ways when a new owner comes on board. The series features regular cameos from popular athletes.

The more dramatic series "Prom Queen" hinges on high school drama and suspense. It's also working on a new psychological thriller called "The Booth at the End" and "Pretty Tough", an adaptation of a successful young adult novel by Liz Tigelaar.

Eisner said the involvement of Rogers will solidify Vuguru's position as a leader in the new media landscape.

"Rogers is a world-class media organization and we are excited about the opportunities this relationship presents for both companies," Eisner said in statement.

Rogers has the largest base of wireless customers in Canada, owns one of the country's largest cable and Internet businesses, as well as magazines, radio stations, convention TV broadcasters, and cable television specialty channels.

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