So you want to be a viral video? by Scott Olster @FortuneMagazine December 23, 2010, 8:14 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons A look at Xtranormal, the company that makes those sardonic robot videos, and how they plan to be the Zynga of intentionally bad online animation. By Chadwick Matlin, contributor Screengrab from the Xtranormal Geico commercial You’ve likely been sent an Xtranormal video by now. You know the one—it probably skewers your profession, government, or general outlook on life. They usually feature two 3-D characters—animals, robots, or people, usually—talking to one another in voices that sound like Stephen Hawking’s. Flat, monotone, and glitchy, the two characters speak a script while standing completely still. Xtranormal doesn’t write any of the dialogue itself; users feed Xtranormal’s website the text, and Xtranormal makes it come alive. If you’re willing to call the stiff, dry drawl of Xtranormal’s characters “alive.” It’s that dynamic—human dialogue scraped of all emotion—that has made Xtranormal videos a remarkable success online. The company says users have made 9.4 million videos, and those videos have been watched hundreds of millions of times. (Xtranormal doesn’t have exact numbers because the videos are played offsite, where Xtranormal can’t always obtain viewership stats.) The videos have become an emergent genre of web video, a way to offer an anonymous critique of a slice of life that, when one stops to think about it, doesn’t make any sense. And as a result, Xtranormal is convinced it can also become an emerging business, one sardonic quip—and virtual good—at a time. The company started in 2008 with a different focus than it has now. It wanted to be the premier way Hollywood types animated their storyboards. But according to Graham Sharp, Xtranormal’s CEO, “The way they were making animation easy by prepackaging the movements and everything, didn’t gel with the creative people, who immediately said, ‘This is great, you’re really making animation and story creation really simple. But it doesn’t do enough for us.’” So, when Sharp assumed control in May 2010, he scrapped that idea, turning the company’s focus to the average Web user who wanted to make a short movie, but didn’t have the knowhow to shoot it himself. That’s when things started to get interesting. Xtranormal’s first hit was “iPhone4 vs HTC EVO,” a skewering of irrational Apple fanboys written by a guy who worked at Best Buy BBY . (As of today, it has tallied nearly 11 million views.) After that, a litany of viral videos followed. There was “Veterinarians vs. MD,” a look into the condescending relationship between vets and “real doctors.” (Nearly 130,000 views.) There was “Hi, I’m a Tea Partier,” which was actually an incisive and articulate statement of the liberal doctrine in the Obama era. (More than 1.3 million views.) And there was also “Quantitative Easing Explained,” an incredulous analysis of the Fed’s ability to print money that may as well have been written by Ron Paul. (More than 3.7 million views.) And as proof that Xtranormal has gone mainstream, Geico used the company to make 30-second commercials to highlight what can get done in 15 minutes when the company isn’t saving you hundreds on car insurance. Watching Xtranormal’s greatest hits, a pattern emerges. The most successful videos use Xtranormal’s characters to suggest incredulity or a loss of idealism. In the “Quantitative Easing Explained” video, the characters are aghast that Ben Bernanke, who has no business or policy experience, runs the Federal Reserve. “So what qualifies him to run the Fed?” “I don’t know, maybe the fact that he has a nice beard.” “But my plumber also has a nice beard.” And in “So You Want to be a Journalist,” (more than 150,000 views) a cub reporter meets a grizzled vet, and gets his dreams shattered. “I would like to write for the New York Times. I want to do important journalism.” “How about covering the financial services industry for a website until it is bought by another website and they move all the writing jobs to Bangalore, India and then you get fired?” “No, I do not want to do that. I would like to write for the New York Times. Xtranormal’s aesthetic encourages this kind of acerbity. The characters’ voices aren’t just robotic, they’re witheringly dry. Their intonations, in the rare instance they have them, are random and misplaced. Their bodies’ most significant movements are a gradual arm wiggle and an impatient blink. They’re characters out of Office Space, so fed up with bureaucracy that the only way they can struggle against it is by sarcastically resigning themselves to its vagaries. An Xtranormal video works best when the person scripting it is commiserating with others who think the same way. “We seem to [have] become the tool for the in-jokes, for the satire, for the parodies in the workplace,” Sharp says. Inside jokes, by definition, are an exclusive brand of humor. They’re a way to insulate a community from those who just don’t get it, which then reinforces the community’s worldview in the process. The “So You Want to Be a Journalist” video, for example, tacitly suggests that those who still think of the profession as a noble one need not watch. Only the ones who know what it’s truly like are wanted. How animated animals translate into real dollars The difficult task for Xtranormal is discovering how to transform successful videos into a successful, monetizable platform. Because it doesn’t want to be a host and portal to millions of videos, it doesn’t have the same business issues as YouTube. Monetizing its content through advertising is not something the company cares about. It’s happy to leave that up to the sites running their videos. “Let those guys carry the advertising. If they do a revenue share deal, let them do the revenue share deal with the person who’s written the movie, so the person who wrote the movie can make some dollars out of it.” Sharp says. And in order for the service to remain in the zeitgeist, it needs to remain open and free for all comers. Xtranormal never knows which video is going to be the one that goes viral. Instead, Xtranormal is going to try to convince us to buy things that aren’t real. It wants consumers to buy virtual goods, just like Zynga, Facebook, and increasing numbers of app developers do. The idea is that those making the movie will want to make them as unique as possible. And that means they’ll buy supplementary, aesthetic features like new characters and new backdrops for $2.50. Sharp said 1% of Xtranormal’s creators are paying customers, but the company (which has just-under 30 employees) says it’ll be profitable in the first part of next year. For that to happen, Xtranormal needs to make sure people keep making the videos. That’s where their iconic presentation comes in. Sharp, again: “We see ourselves as being an enabler for almost video blogging, although we want to come up with a new name for it. ‘Animated blogging,’ let’s call it.” The hope is that they can convince bloggers and journalists to illustrate their writing with Xtranormal videos, using Xtranormal in place of a traditional cartoonist. Xtranormal, then, is grappling with how it can transition from a genre to a medium. Genres come and go—it wasn’t too long ago that the future of web video was Lonelygirl15-style mockuseries. But new modes of communication become inescapable. Web video diaries, Facebook, Twitter, etc. have all left indelible marks on the culture, creating a kind of language for us to communicate in a digital age. If Xtranormal is to excel, it will have to do the same. But that’s a lofty goal for a company that is just now building its cult following. And lofty goals are the kind of thing Xtranormal’s users so delight in skewering. For the company to succeed, it’s going to have to disprove the very worldview that has made it a success.