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Icebox.com Cuts Staff

Even among the apparent success of the Icebox (www.icebox.com) business model to incubate ideas for offline distribution, there are reports that the site is cutting its staff in half. According to the Associated Press, Steve Stanford, CEO of Icebox, said that 50 workers were notified of the layoffs on Tuesday. Icebox previously employed 100 full-time staff.

The move is apparently designed to allow the majority of the production work to be outsourced; however, there is the possibility that some of those laid off may continue to work for Icebox on a freelance basis.

On the heels of the layoffs, Icebox announced that it has licensed "Zombie College" to the Fox Broadcasting Company to be developed into a half-hour pilot for the upcoming programming season. Zombie College was created by Futurama writer/producer, Eric Kaplan, and the sale of the show was orchestrated by Endeavor, which represents Kaplan.

The sale represents the second successful incubation of a show for offline distribution by the online entertainment site, and the first sale to one of the four major television networks.

In August, the Icebox series "Starship Regulars" was licensed to Showtime Networks, to be produced as a live action half-hour series, and Icebox states that it is currently in negotiations for two of its series to become feature films as well.

"As in film and television, entertainment that starts on the Web will need many different distribution windows to realize its full economic potential. It is currently very difficult to reach profitability on advertising alone. While advertising will continue to be an important revenue stream to us, we will also focus on building a second run Web syndication business, forming international distribution partnerships, and developing pay-per-view and subscription services," stated Stanford.

Stanford believes that the company will reach profitability by the end of 2001 based on this business model and reduced production costs. While the company may be closer to profitability, Stanford did express anguish that economic factors lead to staff reductions.

"We're being forced by our investors to take a very rational look at the business and do the things that were the right thing to do - and we've known were the right things to do - for five months, but didn't want to," Stanford in an interview with the Associated Press.

Icebox was seed funded by eCompanies, the incubator created by Sky Dayton and Jake Winebaum to rapidly launch Internet start-ups and help them to grow into profitable,long-lasting franchises.

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