MILES BECKETT wanted to make television shows, but as a Hollywood outsider, the former physician lacked the contacts and funding his dream required. So Beckett and a few cohorts picked up a handheld camcorder and created a series of short episodes of a teen coming-of-age drama, which they then posted on an Internet video-sharing site.

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The rest is still a bit too fresh to be called history, but lonelygirl15, the online show they created in 2006, will likely go down in the archives as the first really successful episodic web show. It and Beckett’s team’s second series set in the LG15 universe, KateModern, have been viewed on the web a collective 150 million times, Beckett says. That makes the shows created by him and his chief colleague, Greg Goodfried, easily the most popular web shows yet. Also, lonelygirl15 landed kudos for its quality and popularity from the Webby Awards, online video’s equivalent of television’s Emmys.

If you’ve never watched lonelygirl15, you’re missing two-to-six-minute episodes that follow a group of California teens battling a mysterious foe called the Order. The star, Bree, kicked off the series with a set of ostensibly candid videos filmed in her bedroom. Viewers latched onto the episodes almost immediately, believing they represented a girl’s real-life video diary. In September 2006, an investigation by fans uncovered the truth: The show was a staged production, and Bree was actress Jessica Lee Rose.

Unveiling the hoax didn’t hurt the show’s popularity. Its creators went on to tape more than 550 episodes over the course of three seasons, adding multiple video posts each week, until the series finale in August 2008. Rose became the medium’s first star, landing television and movie roles. And Beckett and Goodfried went on to found Eqal, the industry’s most successful and best-funded online-show studio to date.

THE REASON Beckett was attracted to online drama is clear: The combination of quality, low-cost recording technology and easy distribution through video sites like YouTube meant there was a real alternative to television. “For the first time ever, you could film your own things and put it online and maybe make a name for yourself,” says Beckett, who works in Sherman Oaks, California. Web shows also offer something new to viewers, screenwriters, actors, advertisers, and even old-line TV insiders, like Rob Barnett.

A veteran executive of MTV and VH1, Barnett is the founder and CEO of My Damn Channel, a New York–based online video site that features a variety of original content. One of the site’s most popular offerings is Wainy Days, which chronicles the love-seeking adventures of a nerdy comic in New York City who Barnett describes as “kind of an edgy Seinfeld.” Barnett says the web world is a ferment of innovation. “There’s a tremendous amount of creativity here,” he says. “You don’t have a lot of Big Brother stuff going on.” By that, he means it’s possible to get things done without endless meetings with higher-ups. For instance, he says they were able to put together a sports interview show for one of their sponsors, shoemaker Puma, practically overnight by television standards, posting the premier episode online just days after the initial meeting.

The low cost of web shows has to be mentioned as well. Beckett says an entire season of an LG15 web series costs less to produce than a single episode of many television shows. In a testament to both the speed and the economy of the medium, Barnett says, “In our first 365 days, we were able to create 325 original short-form videos, and the average cost for those videos was under $7,000.” That’s something, compared with the $50,000 to more than $200,000 that many network TV shows cost per episode.

From the viewer’s standpoint, one of the biggest attractions of web shows is time control. As long as you have an Internet connection, episodes of web shows are available any time and any place from the moment they are posted until, well, indefinitely, says Adam Wright, director for Ipsos MediaCT, a division of Ipsos, one of the largest survey-based research companies. “It’s not like your only chance to watch that great The Office episode is on Thursday at eight p.m. Central,” Wright says.

Web interactivity bolsters viewer appeal too. Rather than just watching, many viewers engage in simultaneous online chat sessions to discuss characters and stories. The LG15 website has thousands of pages of message postings and user comments; it even has a Wiki-style album of information on the LG15 universe, called LGPedia. Beckett’s writers chat directly with viewers, taking ideas for plot twists and then often working those into the script.

For all their interesting wrinkles, though, web shows also have some tough problems. To begin with, despite the million-view numbers cited by Beckett, their actual audiences are small. The LG15 series’ base of viewers is likely 150,000 to 200,000. That’s comparable to some cable television shows but is no challenge to broadcast networks, which boast audiences in the tens of millions for monster hits such as American Idol.

Even more importantly, the medium has yet to find a reliable way to make serious money. Beckett’s approach has been to place sponsor products in the show. In exchange for a payment from Neutrogena, writers gave one character a job at the beauty-products company, complete with a fake employee website and e-mail address, which Beckett says received thousands of e-mails and spurred great interest among fans. “Because it’s so interactive, they just go crazy,” he says. “There were literally ongoing discussions about Neutrogena products.”

Other shows splice conventional commercials before, after, and sometimes during episodes. But David-Michel Davies, executive director of the Webby Awards, says the nature of the web still puts off many big-bucks advertisers. “A lot of people love online humor and content because it’s not limited,” he says. “But advertisers are still adjusting to whether that’s something they can be associated with.”

Don’t expect to see precise clones of television shows on original web content either. Beckett says the medium doesn’t lend itself to TV’s half-hour format and common storytelling perspective (which is different from the first-person approach of the LG15 series). “If you take a third-person television show and chop it up into pieces, I’m not sure that works great online,” he says.

AT THIS POINT, web shows have yet to deliver much more than promise. Richard Rushfield, entertainment editor for and one of the first reporters on the lonelygirl15 hoax, says that so far, no other web show has come close to the success of Beckett and his company’s pioneering effort. “When lonelygirl15 burst forth, everybody said, ‘This is the television show of the future. This is how people are going to be watching their shows,’ ” he says. “But since that time, not a single show has really followed up on that in terms of being able to develop an audience like lonelygirl15 did.”

Part of the reason for the disappointing lack of successors, Rushfield says, is that much of lonelygirl15’s appeal seems to have been based on the mystery that surrounded its early episodes and the controversy that erupted following the exposé, which provided a lot of visibility for the show. “That’s a very difficult thing to replicate,” he says. “And no one has.” In fact, the chances of anybody believing another slick-looking YouTube video is truly a homemade video diary are probably nil.

Eqal, Beckett’s company, did, however, raise $5 million in venture last spring. And this fall -- after ending lonelygirl15, following its third season -- Eqal premiered LG15: The Resistance, another teen drama set in the LG15 universe. Online-video viewing has been growing at a blistering pace among digital-video users: The percentage of all video entertainment watched by digital-video users on personal computers nearly doubled from 2007 to 2008, rising from 11 percent of all screen time to 19 percent, so television’s share of screen time dropped to 70 percent, according to Wright’s Ipsos research.

The networks are getting into the act, too, producing short “webisodes” of popular series like The Office, which, along with the chat rooms and message boards, offer extra content available online only. NBC premiered a new sci-fi web show in August called Gemini Division, which stars Rosario Dawson. The technical and management infrastructure needed to produce online shows is growing at a rapid clip. But in the end, more important than talent or tools is the appearance of serious interest from the moneyed world of old-line television fundraisers. “They’re as interested in money as the next guy,” says My Damn Channel’s Barnett, “and the money’s starting to flow.”