Internet Start-Ups: TV's Brain Drain.

The Internet start-up phenomenon is tempting top executives away from the traditional broadcasting industry to work in the new "country without frontiers," as UnoDosTres.com's founder and CEO Carlos Barba called it. Formerly serving as president of Univision Television Group and programming director at Columbia Pictures, Barba said he abandoned the world of television because "no one understands the Internet better than a broadcaster. The Internet is the continuation and evolution of broadcasting. I believe it's the television of the new millennium."

Especially in demand nowadays are "people familiar with media and entertainment" to help dot-commers maximize the value of new technology, asserted Bill Simon, managing director of the Global Entertainment, Media and Convergence division at Korn/Ferry International, an executive search firm used by many web start-ups. He believes a major allure of the Internet is the fact that it "gives people a chance to reinvent themselves."

The growing field is drawing from a pool of talent in such related industries as television; that is until the first crop of web-savvy kids grows up and enters the job market. Practically every week another television executive is lost to the world of Internet start-ups. A recent defector was ABC president Pat Fili Krushel, who opted earlier this year to take the reins as president and CEO of WebMD Health, the consumer division of Healtheon/WebMD. And former TV industry vets Frank Biondi and Greg Meidel announced the creation of Massive Media Group, a startup which protects copyright holders online. These are just a few members of the brain-drain parade.

Simon cautioned that while there are some hits in the "cowboy frontier" of Internet-land, there are also a lot of misses. It's a very competitive business and "you have to be interested in this or you won't be successful." He added that many executives take less money at a new Net venture but are attracted to "high-growth opportunity and long-term equity"

According to a recent Los Angeles Times article, the L.A-area shortage of new media start-up managers is skyrocketing salaries higher than last year. With entertainment becoming more important to digital media, salaries in Los Angeles are approaching those of San Francisco and New York, the most competitive markets for web talent. Based upon an L.A.-area survey, web start-up CEOs made an average of $250,000 in 1999, compared with $300,000 at a publicly-held corporation. Chief financial officers at start-ups pulled in $180,000 compared with the non-start-up wage of $190,000. Although the pay is a bit lower, the web companies entice executives with hefty stock options.

Barba pointed to the massive amount of money involved in Internet ventures. With a value of around $10 million six months ago, UnoDosTres.com is now worth an estimated $100 million. Reported the CEO, "It took 28 years for TV to make $30 billion but it took the Internet four and a half years to make the same amount." To further illustrate the money involved, he added, "When we go public in a year, we could buy Univision."

Not only are Internet companies gobbling up or merging with television (e.g. AOL and Time Warner), but the web has the capacity to reach a global audience. "All those people are consumers," Barba pointed out, referring to the potential eyeballs in Asia, Europe, Latin America, Africa and other corners of the globe. "They all buy products. More than television, with the Internet you have the possibility of shopping, banking, TV, news, stock-market information, anything you want." When you study its marketing potential, "it's as simple as uno dos tres" to understand the Internet's allure.

Internet start-ups offer the chance to be at the forefront of an experiment, cast a mark on a new media form and possibly earn a nice chunk of money. Is it any wonder that innovative executives are jumping ship?

Korn/Ferry International's Simon added that some executives opt to migrate within their company to interactive and web-related divisions. "It's happened at Time Warner and Viacom." Whether they choose a start-up or a division transfer, entertainment executive talent is at a premium.

Barba invited "anyone who wants to face the [Internet] challenge and discover a new way of life" to join the world of new media, where "imagination has no limits."