DEN Receives $26M After Launch Boost

As traditional media and the Internet converge, content is produced that combines the reactive sensation of watching television with interactive capabilities.

The target audience for this type of programming falls between the ages of 14 and 24, or Generation-Y. Not only is this demographic the most coveted among advertisers, but it is assumed by entertainment producers that because Generation-Y has grown up with the Internet, it will most easily embrace interactive programming.

Two weeks after launching its site on the Internet, Santa Monica, Calif.-based Digital Entertainment Network (DEN) received $26 million in its first, and likely only, round of venture financing May 23. The company is expected to file for an initial public offering shortly.

DEN produces and distributes interactive video programming on the Internet. The company offers advertisers, including The Ford Motor Co., the ability to incorporate products and services within DEN programs and links viewers to sponsor information and e-commerce offerings.

“We produce programming for the Internet of today,” said Chief Executive Jim Ritts. “If there is convergence, the hallmark of that convergence needs to place control and customization to the viewer.”

Through a private placement of Series B convertible preferred stock, DEN raised the new capital from Microsoft Corp., Dell Computer Corp., Cassandra Chase Entertainment Partners LLC, Chase Capital Partners and senior executives of Lazard Freres & Co. LLC.

No placement agent was used for the deal. In January, the company raised $14 million through founder’s investments.

Proceeds from the investment will be used to produce more programming. DEN currently has 30 pilot programs in development. Former Disney Television President David Neuman serves as DEN’s programming president.

Concurrent with the financing, the company will launch The den. music group. Gary Gersh and John Silva, principals of The G.A.S. Entertainment Co. will serve as co-presidents of the subsidiary.

Prior to becoming CEO of DEN, Ritts was co-founder of Channel One. He had also served as commissioner of the Ladies Professional Golfer’s Association.