A run down of Stan Lee Media by Francis Lord

The most well known pen name in comics has been very busy of late, creating new characters for a brand new company. Pop culture icon Stan Lee is co-founder and Chairman of Stan Lee Media, an Internet-based, multi-media production and marketing company. The company is engaged in creating original proprietary characters for entertainment, merchandising and promotional exploitation worldwide. As Chief Creative Officer, Lee is involved on a day-to-day basis in creating content, supervising production and supervising his own creative team.

Not a bad gig if you're 78 years old.

After having worked in comics for 60 years, and having revolutionized the form along the way, Lee has turned his attention to the Internet. Lee's own web site, stanlee.net, is the fulcrum of the new company. Lee's new creations are not comic book superheroes. Rather, they are Internet superheroes, and have been designed specifically for the Internet and for the 'tween' market (between ages six and twenty). The intent is to use the medium in order to brand the characters, and then spin them off into other entertainment mediums, such as theme-parks (which, for non-neophytes, is apparently called "location-based entertainment"), animated features, television, live-action film, comic books, and merchandise such as toys and video games.

Stan Lee Media (SLM), a Colorado corporation, was created in January 1999, and was made public the following July via a reverse acquisition of Boulder Capital Opportunity, Inc. Headquartered in Los Angeles, SLM is aiming big, with its ambitious goal to become the largest independent creator and distributor of content on the internet. In the content-crazed webscape, this will be no small feat.

As for stanlee.net itself, SLM hopes it will pioneer online publishing and animation. Interactivity is a buzzword used constantly in the hype surrounding stanlee.net. According to the company, the website is designed to stimulate new levels of interaction between the viewer and the site, as well as entertain, and generate income through e-commerce and advertiser dollars. And stimulate it has, as one can easily attest by the 7th Portal Swimsuit edition currently running on the website. The 7th Portal is Stan Lee's first superhero creation in several years. The story features an international cast of teenagers who have only met online and who must join forces in order to save the world.

The 7th Portal can be viewed on the website as series of Flash animations. Each webisode lasts between 3-5 minutes, and serves as a chapter in the on-going storyline. The 7th Portal has proven to be very popular, having overwhelmed Shockwave.com's server when it premiered in February. Since then, it has been the No. 1 most viewed site on Shockwave.com, registering more than one million downloads of the seven-minute first episode.

What has been the key to this success? SLM is unlike other dot.coms that have inundated the Internet in recent years. It has one huge and all-important advantage, and that is brand name. The name of Stan Lee is instantly recognizable across all genres. It's virtually synonymous with superheroes, and comics entertainment. It's therefore no wonder that when Lee signed a lifetime contract with Marvel Enterprises in 1998, he was given all right and title to his name, likeness, signature and 'brand', along with clear title to 'Stan Lee Presents', 'Excelsior!' and 'Stan's Soapbox', which are slogans and trademarks developed for Marvel by Lee during his comics career. Lee then assigned all of these rights, along with all future rights to any newly created properties, to SLM as part of a lifetime employment agreement with SLM. Interestingly, given his current position with SLM, Lee will retain ownership of his new characters for the first time in his career.

Brand value has allowed SLM to form strategic alliances with businesses such as Macromedia, Inc., owner of shockwave.com. This has made it much easier for SLM to establish itself, and the results of the last few months have spoken for themselves.

Macromedia acquired a direct $5 million equity stake in the company and arranged an exclusive distribution agreement for five SLM franchises for its Shockwave animation portal. In May SLM entered into an agreement with software maker Toon Boom Technologies to produce its forthcoming animation franchises using Toon Boom software. The technology allows animators to create programming for direct export to, and easy conversion between, Internet, television and film mediums through the utilization of the Macromedia Flash authoring program.

Paramount Parks have partnered with SLM and will create `"Stan Lee's 7th Portal 3D Simulation Experience". Next spring, visitors at all Paramount Parks can experience a 3-D film that follows the exploits of The 7th Portal. SLM was also able to attract the interest of Mark Canton, former studio head at both Warner Bros. and Song to produce a live action film based on The 7th Portal. One should note that Canton was the producer of two of the few comic-to-film success stories, Batman and Men in Black. SLM also scored another major coup in June with the hiring of Ken Williams, the former head of Sony's Digital Studio Division, as president and CEO of SLM. Among analysts in the entertainment industry, this was seen as a strong move for a new company in the global entertainment arena.

Among its other notable projects, one can't forget the Backstreet Project, which sees the members of the boy band The Backstreet Boys turned into superheroes. The Backstreet Project will premiere sometime this summer as an animated series. There was also a comic book produced, but strangely, it was never brought to the direct market. SLM opted instead to sell it only at Backstreet Boys concerts, and over the Internet. It's likely however that the $8 price tag was a factor. SLM has continued its efforts to merge music and animation with the creation of the superhero character called Mary J., based on singer Mary J. Blige. The most recent announcement from the company has it licensing the animation rights for a new Mighty Mouse serial.

A important milestone for the company occurred in May, when SLM was approved for listing on the NASDAQ (ticker symbol SLEE). Stan Lee's stake in the company was recently estimated to be worth near $25 million, leading to speculation that he might attempt to buy out Marvel Enterprises.

Such speculation was thrown in doubt when the company announced its quarterly earnings this past spring. In a report filed to the Securities and Exchange Commission, the company said it "expects to incur losses for the foreseeable future as a result of the significant operating and capital expenditures required to achieve its objectives." The report also said the company would need to generate revenues significantly above historic levels.

SLM's total revenue for the three months ending March 31 was $296,159, based on license fees for its Marcomedia webisodes, and sale of its Backstreet Boys comic, as well as various merchandise. Expenses during this time totaled $5,709,523. The figures are seen on Wall Street as normal for a company just starting up, especially one with 125 employees. However the danger lies in running out of operating capital before revenues can be increased. The company expects to ramp up its e-commerce business by the beginning of 2001, but given the difficulties encountered by companies in the rapidly evolving world of online commerce, nothing is for certain.

To his credit, Lee has surrounded himself with a management and creative team from Fortune 500 entertainment, including co-founder Peter Paul, a veteran media strategist. Paul is perhaps best known for turning romance novel cover boy Fabio Lanzoni into a household name as a marketing spokesman and best-selling author. And one assumes that if Paul can do it for Fabio, he then ought to be able to do it for Stan Lee Media.

Time will tell.