Writers strike turning into incubator for Web start-ups

Few online entertainment ventures today make money. Yet that has not deterred striking Hollywood writers, eager to bypass the studio system, from forming start-ups to distribute their work on the Web.

At least three start-ups, each with a different business approach, are unveiling their corporate monikers and the names of their founders as they intensify the search for venture capital and top management. With names such as Hollywood Disrupted and Virtual Artists Inc., these new ventures have lured investors such as the Oscar-winning writer of "Rain Man" and the Emmy-winning scribe behind "Homicide," along with prominent software developers and technology executives.

These new ventures are incubating in the fiery glow of the 2-month-old strike by the Writers Guild of America. The work stoppage has affected about 10,000 union members, who are seeking higher pay when their movies and TV shows are shown on the Internet. Their studio employers have pushed back, contending that the economics of the Internet are too uncertain for them to ratchet up writers' online pay.

Some writers are now taking matters into their own hands, using their downtime to meet with venture backers, other writers and technologists.

"We should show the studios some gratitude for getting us together," said "Rain Man" coauthor Ron Bass, a member of the WGA's negotiating committee and an investor and director of Virtual Artists. "This is not just an Internet play, but the beginning of what the future is going to look like."

About 20 entertainment and software writers are investing an average of $10,000 for a chunk of Virtual Artists. Co-founded by Aaron Mendelsohn, a screenwriter who created "Air Bud," Virtual Artists plans to fund projects as varied as shorts and feature-length movies. Its other investors include star television writer Tom Fontana of "Homicide" and "Oz"; "Hotel Rwanda" co-writer and director Terry George; "Chicken Run" screenplay author Karey Kirkpatrick; and John Logan, writer of "Sweeney Todd" and "The Aviator." Susannah Grant, who wrote "Erin Brockovich," and Warren Leight, who runs the TV show "Law & Order: Criminal Intent," also have agreed to invest.

More surprising is the participation of major contributors to the movement for free software, who see the writers' fight as a kindred rebellion against corporate control.