Web Studio Stays Strong in Lean Times.

DNA Studio defies conventional wisdom. The Beverly Hills firm is in a business -- Web content and Web marketing -- that is supposed to be withering. Its clients are mostly Hollywood entertainment companies, which are supposed to be slashing budgets for anything entangled in the Web.

But DNA is not only still standing in the Web development space, it was barely wobbled during the shakedown.

The Internet winter was frigid for Web developers like Razorfish Inc., IXL Enterprises Inc. and MarchFirst Inc. While those high-profile firms have cut local workers in recent months, DNA has been putting its staff of 82 to work on Web projects for USA Films' "Traffic," Warner Bros.' "Harry Potter and the Sorcerer's Stone," Sony Pictures Entertainment's "Charlie's Angels" and Universal Pictures' "How the Grinch Stole Christmas."

Last week, DNA announced that it has partnered with Michael Davies, executive producer of ABC's "Who Wants To Be Millionaire," to create programming for various Web, wireless and interactive television platforms. Their first project is a television series for the Arts & Entertainment Channel that will originate on the Web. Davies' Diplomatic Productions also has an eye on future gaming applications for wireless devices and plans to use DNA as part of that effort.

"Programming for future platforms will rely on understanding technology, how people use it and the ability to bring old media television programming principles to this new discipline," said Diplomatic executive vice president Matti Leshem. "This alliance positions us to be successful in the interactive landscape."

Hollywood access

Winning that kind trust and confidence from the entertainment industry has been crucial to DNA, which gets almost all of its revenue from movie studios, record labels and television networks.

Besides Sony, Warner Bros. and Universal, DNA has completed projects for Walt Disney Co, DreamWorks SKG, Island Records, Maverick Records, Miramax and others.

The company was founded in L.A. in 1995 by John Moshay, Chris Gibbin and Josh Mutcnik. The trio left jobs at movie studios to form DNA so they could produce digital content for what was then a dubious new medium.

Since then, DNA has evolved into a Web development firm that the entertainment industry turns to in part for content, but mostly for strategy.

"Other shops focus on the thing they're building and its design and functionality," said DNA Chairman and CEO Moshay. "The creative experience is a focus for us, but we are much more focused on strategy than other shops are."

To DNA, a cool site is nice, but it's how that coolness motivates audience behavior that matters most.

"There must be some return on the money they're spending with us, and it must be measurable," Moshay said.

That approach lets DNA piggyback on the already-strong content coming from client properties like "Harry Potter" and "Charlie's Angels."

Distinctive approach

"We're very focused on building audiences for the properties, while a Razorfish might want to build a customer," said Gibbin, the chief operating officer. "Razorfish was focusing on building business, but we just want to build an audience, to find the people that already like what our clients are doing, grow it out and then track our effectiveness."

The company founders would not disclose revenues or what the firm charges for projects.

It has been reported that the cost of the "Harry Potter" Web site will run as high as $3 million, a figure that DNA would not confirm.

Whatever its cost, the extensive production -- a collaboration between Warner Bros., author J.K. Rowling and DNA -- is a coup for DNA. Several Web developers competed aggressively for the project, which Warner Bros. plans to make the official source for all "Harry Potter" information.

While DNA has already collaborated with Warner Bros. on other projects, the "Harry Potter" deal will probably pave the way for future collaborations.

And that future is all about successful marketing, according to Moshay.

"Entertainment companies are beginning to understand how they can use the Web to market their brands and connect audiences to their products on an ongoing basis," he said. "The lines between content creator and advertiser are blurring on the Internet. That's the space we're enjoying playing in."

Will consumers go for it?

"Consumers like to be marketed to when they like what's being marketed to them," Moshay said. "The notion that marketing is offensive and bothersome to consumers is true when consumers aren't opting in. The Web is unique in that it allows them to immerse themselves in a marketing experience that they might actually like."