Video streaming is booming right now, with companies spending billions launching services like Disney+ and Amazon Prime Video (and streaming being one of the eight forms of human entertainment allowable at this very moment). There's almost more streaming platforms than actual shows, meaning that 30 percent of Hulu is now just the CEO reading his Wario fanfiction, while DCUniverse is desperately trying to cut a bunch of '70s pornos into a new Green Lantern movie. (We had a third joke, but Netflix is spending $45 million turning it into a 13-episode tween dramedy.)
But this is actually the second video streaming boom. The first started in the late '90s, with the New York Post noting that hot startup Pseudo was facing fierce competition from the likes of DEN and Pixelon. Except that each of those companies quickly collapsed into an almost unbelievably bizarre disaster, entirely unrelated to each other. Within two years, a legendary rock band had been tricked into reuniting, a future bitcoin tycoon had fled to Spain out of a fear of assassins, and $32 million had been invested in a company run by a man in clown makeup. Let's start with ...
In late 1996, a guy calling himself Michael Fenne arrived in California, living out of his car and showering at the beach. He announced that he had invented an amazing new way to stream live video over the Internet and launched a company called Pixelon, which became one of Silicon Valley's hottest startups. The company quickly raised $35 million from venture capitalists and signed deals with Paramount and Will Smith to stream trailers and music videos online. Glowing press coverage claimed the "million-channel universe" was "arriving ahead of schedule."
There were just a couple minor problems with this incredible success story: Fenne was actually an escaped con artist named David Kim Stanley who had fled Kentucky after scamming over a million dollars up and down the Appalachians. Also he hadn't invented anything -- Pixelon was just secretly using existing video tech like Windows Media Player in all their demos. It was basically the Theranos gambit, if Elizabeth Holmes had turned out to be Bernie Madoff in a wig. And things only got weirder from there.
Wise County Sheriff's Dept.The major tech breakthrough fell off the back of a truck.
It turned out Fenne was running the company like a bizarre cult, with his disembodied voice regularly booming over loudspeakers instructing employees to "report to the woodshed, your uncle is going to give you a whooping." Engineers were required to attend regular prayer sessions held in near-total darkness, while it wasn't uncommon to walk into Fenne's office and find an employee kneeling on the ground while Fenne laid lands on his head. And it's really not a good sign when your CEO appears to be modeling his leadership style on Jim Jones. No sysadmin job is worth chanting ecstatically while your manager tries to offer his severed tongue to the Tuunbaq.
Things all came to a head when Pixelon spent $16 million, virtually all their available cash, on an insane launch party at the MGM Grand in Las Vegas. The horrendously-named "iBash '99" was a day-long extravaganza hosted by David Spade and featuring live performances by KISS, Sugar Ray, the Dixie Chicks, and the Who. The Who had actually broken up years earlier, but Pixelon threw so much money at them that they got them to reunite. Seriously, the Who reunited for this shit! The whole thing was supposed to be livestreamed around the world, but Pixelon's fake tech obviously failed to work properly.