Perched over the Starbucks shop at the Third Street Promenade in Santa Monica, a tall, blue-eyed Texan with a buzz cut sits in a little office and hatches a whole new kind of network. Clay Womack is an unlikely media baron. Founder of an Austin, Texas company called Pacific Security Group that runs two private investment funds, his background is in the world of venture capital and private placements not program content and advertising rates. But Womack is running one of those tiny little companies that are pushing the boundaries that separate television from the Internet. Think of Direct Stock Market Inc. as the producer of a pay-per-view TV network for business people and investors that isn’t on television at all, but appears on the World Wide Web. Direct Stock Market is running content that is both better and worse than television, and shows us, perhaps, what the Web is going to look like in the next century. On March 18, the Los Angeles Venture Association will hold its 1998 Investment Capital Conference in downtown L.A., a well-respected annual event intended to help entrepreneurs get access to venture capital. The entire conference will be broadcast (or rather, webcast) over five separate “channels” on Direct Stock Market’s Web site (www.dsm.com). That means all the speakers will be filmed through a digital camera, and the audio and video will be fed into the site. Further, there will be commercials appearing at the beginning and end of each presentation and not the brief animated interstitial spots that currently appear on many Web sites, but actual 30- to 60-second TV commercials that have been digitized and webcast. There will even be 20-minute infomercials spliced into the content. Direct Stock Market is expecting about 10,000 subscribers to sign on for the conference. It sounds rather like videoconferencing with a marketing twist, except that anybody with a 28.8K modem and a decent processor can access the content without paying a whopping hourly fee. It costs $24.95 to access the conference, and for that price you also get to revisit it whenever you want for six months; the entire conference will be stored on the site’s archives. Actually, in some ways the site is better than TV. For one thing, it’s interactive; viewers can e-mail questions to the presenters. A technician with a laptop will relay e-mail to the speakers, who will answer them, live, during the conference. The site is worse than television because bandwidth is still a bugaboo. The video image is jerky, low-resolution and tiny, appearing within a window that on most computers will measure only about 2 inches by 2 inches. Cable has split the TV market into a panoply of niche audiences. There are cable networks for people who like reruns of old TV shows, for people who like to cook, for history buffs and nature lovers. Web networks like Direct Stock Market pursue even more extreme niches in this case, people interested in investment conferences. “There’s going to be so much content on the Web. We could be broadcasting this interview right now,” says Womack, pointing a digital camera at his interviewer. “What will be key in the future is creating meaningful content in a branded environment.” The question, of course, is whether it’s possible to make a profit on this kind of Internet programming. Direct Stock Market started out five years ago in Womack’s garage as an electronic prospectus service, sending out information on companies to potential investors over the Web. It never pulled in any significant revenues until last year, when it grossed about $100,0000, Womack said. This year, based on current contracts, he expects to bring in about $3 million in revenues most of which will come from pay-per-view charges and advertising fees. Advertising for the conference is a relative bargain. It costs $545 to run a 30-second ad, and the “netmercial” (if that isn’t a word, it probably will be) will be stored in the archives for six months so anybody who calls up the conference later will be exposed to the spot. Potential advertisers include all the companies making presentations during the conference (mostly investment banks like Donaldson, Lufkin & Jenrette and Cruttenden Roth Inc.) and manufacturers of high-end consumer products that want to reach the high-net-worth individuals likely to access the event. Direct Stock Market has already netcast a number of finance-oriented conferences, but this one will be the biggest yet. Next on its plate is the Forbes Presidents Forum for Emerging and Middle-Market Companies in New York, and later the Microcap Equities Conference in Houston. So if running content-based sites supported by digitized television commercials is feasible, why aren’t more people doing it? According to Web entrepreneurs, it’s because there’s an extremely limited market for this sort of thing. “If you were on a slow modem, this would look terrible,” said Richard Titus, president of Web development firm Tag Media in Santa Monica. To be financially viable, Web sites typically must be accessible to the maximum number of Web users, and Direct Stock Market’s content is pretty high-end although Womack insists that anybody with a Pentium 166MHz chip and a 28.8K modem can bring it in just fine. Another possible drawback to Direct Stock Market’s strategy is that Web audiences still may not be ready for television-style advertising. “It’s antithetical to the medium,” said Nick Rothenberg, managing partner of Culver City-based USWeb Los Angeles. “If you really want to annoy someone on the Web, take away their freedom to choose” whether to watch something, as commercials are non-voluntary content. Womack isn’t concerned. He knows his niche; he’s not trying to create content for a general audience. “I think there’s going to be a tremendous appetite for content about certain things, and financial information is something there will always be an appetite for,” he said. News Editor Dan Turner writes a weekly column on marketing for the Los Angeles Business Journal.