How William Morris and other Hollywood agencies are getting into tech startups and investing

All manner of Hollywood businesses are looking at how they can make themselves profitable online. The future isn’t clear for stalwarts like the larger music labels and movie studios. But there are other power players in the media who are making moves. In particular it’s worth looking at the role that Hollywood talent agencies are starting to play in connecting technology companies with the media and advertising industries.

All four of the largest talent agencies are looking at how to put themselves at the center of digital media. Perhaps the one most open about its efforts is the William Morris Agency, which recently partnered with Silicon Valley venture firms Accel Partners and Venrock, and telecommunications giant AT&T, to co-invest in promising media-related startups. WMA’s rival, Creative Artists Agency (CAA), has also been looking at raising a large digital media fund, together with Draper Richards Jurvetson — although it’s still little more than rumor.

Beyond investing in promising startups, WMA sees itself as a sort of “extended business development” arm of a technology startup, much like the role that it takes for the actors, directors, writers, musicians, professional athletes and other “talent” (celebrities) it represents. Take, for example, its role in helping Sunnyvale, Calif.-based mobile video company MyWaves.

William Morris and MyWaves’ growth

MyWaves, as we’ve covered, has been exploding in growth over the past year or so, largely because it lets people watch professionally-produced videos for free, even though it has competitors like YouTube’s increasingly good mobile site.

WMA played an instrumental role in introducing MyWaves to a wide range of big media companies that wanted to distribute their videos on mobile devices. Through establishing itself with the media industry, it was able to offer users professionally-produced videos that have proven popular with users (note that it also lets users upload their own videos). Nielsen ranks it the number one mobile video site worldwide, and its videos get a total of nearly 2 million views daily.

MyWaves has done deals with guys’ magazine Maxim, guys’ site Ripe TV, another guys’ site DoubleAgent, “indie pop” music site Babel, gossip publication TMZ and others.

It also recently became the only distributor of free videos on mobile devices for Viacom. That means its mobile application is the only place that you can watch clips from hits like The Daily Show for free, from your phone. Your other option is to pay to use a poorly designed mobile TV service from a carrier like Sprint. In fact, as we covered on Monday, MyWaves and Viacom have become so close that Viacom-owned MTV has agreed to co-sell advertising on the MyWaves site. In this sense, MyWaves in turn helping media companies to get new distribution for their videos on mobile devices. It took MyWave’s startup approach of experimenting with new methods of distributing videos — not a telecommunication company’s flawed and relatively unsuccessful perspective — to find an audience.

WMA, for its part, has a business relationship with MyWaves where both companies will see an upside if MyWaves does well, MyWaves’ Rajeev Raman told me. In fact, he said the company specifically set out to become a mobile site that had close relationships with Hollywood and New York, so it made a point of looking up William Morris beforehand to help open doors.

Agencies like WMA also have rich corporate and advertiser relationships, built over the years from brokering ad-sponsorship deals for its clients. In an internet marketplace that is trending heavily to be entertainment-focused in the future, having a connection not just to content, but to advertising may help a startup start making money faster than it might otherwise.

Other startups that William Morris has worked with — publicly — include kid’s virtual world Habbo, avatar-maker Fix8 (which just raised a $2 million round) and ad company Scanscout (which WMA itself has invested in, along with Time Warner ). In kid virtual-world Habbo’s case, for example, WMA will help the company ink more deals for media companies to integrate branded virtual goods, and in-game appearances by celebrities. The two partners are broadly focusing on “new revenue-generating business opportunities with major studios, television and cable nets, record labels, and professional sports leagues.”

The hard part is, of course, execution

Another big rival agency, International Creative Management (ICM) is also reportedly looking at building technology and investment relationships. Interestingly, ICM’s chief executive, Jeff Berg, has been on enterprise software company Oracle’s board of directors for a decade and has been talking with his tech-world contacts about how is company can work closer with them.

CAA has been active forming relationships in the video game space, thanks to Seamus Blackley, the co-creator of the Xbox and a former game developer. As an example, CAA introduced Disney to Junction Point Studios, an Austin, Texas game studio run by veteran game maker Warren Spector. Disney wound up buying Junction Point last year.

The last of the big four, United Talent Agency (UTA), is meanwhile playing more of an incubator role with online TV firm 60 Frames, and others.

The competition won’t just be between these firms, but between them and the world’s newfound ability to cut out the middle-man in things like music and movie distribution, as well independently-brokered relationships.

Start-ups without entertainment industry ties have successfully established relationships in the business without the assistance of firms, such as competition site IBeatYou. Through personal connections, the founders have been able to get movie stars like Jessica Alba and sports stars like Baron Davis involved. Davis is even an investor, along with retired football star Ronnie Lott.

More generally, real success in terms of investments and business relationships between technology companies and these agencies — and Hollywood, in general — will depend on the partners’ ability to truly understand where the web is heading next and pluck projects that fit best with its clients. At least for some tech companies, like MyWaves, working with an agency has already been a good decision.

And one last question: When will an episode of Entourage be filmed in Silicon Valley?

Eric Eldon contributed to this article.

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