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Fourth Wall studios lays off staff, halts production

November 28, 2012|By Ben Fritz
  • Fourth Wall Studios co-founders Elan Lee, left, Sean Stewart and Jim Stewartson were forced to lay off most of their staff this week as part of a strategy shift.
Fourth Wall Studios co-founders Elan Lee, left, Sean Stewart and Jim Stewartson… (Francine Orr / Los Angeles…)

An effort to reshape the world of entertainment backed by Los Angeles' wealthiest man has taken a big step back.

Fourth Wall Studios, a Culver City-based firm that produces interactive video series called "rides" for digital platforms, abruptly laid off the majority of its staff this week and stopped financing new content.

The sole investor in Fourth Wall has been Patrick Soon-Shiong, a Los Angeles billionaire who made his fortune in the healthcare business and is a minority owner of the Lakers.

In March of 2011, Soon-Shiong agreed to invest at least $15 million in Fourth Wall, providing funding long sought by the company's three leaders to help them develop their technology and produce original content for multiple screens called "transmedia."

In an interview Wednesday, Soon-Shiong said he had decided to refocus the company on its technology that can enable users to consume and interact with content on two screens simultaneously, such as a television and mobile phone.

"Instead of spending resources building content, we've decided to drive the engine, which is already very beautiful and powerful," he said. "We're staying true to the original focus."

Soon-Shiong said he remains particularly interested in using Fourth Wall technology for his healthcare and wellness businesses.

On Monday, between 25 and 30 of Fourth Wall's approximately 40 employees were laid off. Most of the staffers who lost their jobs were involved in original content production. The remaining dozen or so are working on Fourth Wall's technology.

Fourth Wall Chief Executive Jim Stewartson acknowledged that the layoffs the day after Thanksgiving weekend caught most employees by surprise. However, he declined to explain why the company leadership decided to make the strategy shift now.

"It was a sudden decision and not necessarily expected by everyone, and I have to leave it at that," he said. "It was a refocus, and as a major shareholder, Patrick was part of that decision."

Over the last year and a half, Fourth Wall hired a team of producers, development executives and others with experience in movies, television and video games to produce content. Since releasing its first series, a dark comedy called "Dirty Work," in April, the company has launched 10 more, all of which utilize its Rides platform to connect with viewers on multiple screens.

In September, "Dirty Work" won an Emmy Award for original interactive television programming.

With its content team gone and financial resources cut, Fourth Wall's leadership team now hopes to find partners to finance new transmedia content using their platform.

"The content will continue, but we are not going to be directly involved in building it," said Soon-Shiong.

Hollywood is a conservative town, however, and most studios and networks have previously utilized "transmedia" only for marketing efforts to promote movies and television shows.That's why so many who thought entertainment needed to be rethought in a digital age when young people are watching TV with a tablet in one hand and a smartphone in the other were excited by Fourth Wall's ambitions, enabled by Soon-Shiong's aggressive backing.

"I wouldn't be human if I went through what happened this week without being very disappointed and extremely sad," said Stewartson. "It has been an amazing team, an incredible environment, and certainly we have taken a step back."

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