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Beckett tried to explain to the executive that the central theme of online entertainment was interactivity, as opposed to the passivity of television.

each portal wanted the series to stream on its site only.

Unlike television, where writers sit in a room and come up with a single script, the Lonelygirl15 team comes up with a general plotline and then sends its writer-directors out to produce independent but interconnected videos. All the characters, in essence, have their own show.

It's enough to keep the operation afloat until they can find a way to take serialized online entertainment to the next level.

The exec responded by walking them through his fall lineup and pointing out that the network's Web site had great supplemental video material for the season's upcoming shows.

If it couldn't be shared – if hard borders were put around it – how different was it from TV?

The way the networks look at the Internet now is like the early days of TV, when announcers would just read radio scripts on camera.

f it couldn't be shared – if hard borders were put around it – how different was it from TV?

If it couldn't be shared – if hard borders were put around it – how different was it from TV? If this was going to be the first successful Internet TV show, they felt it needed to embrace the medium

Flinders can't write and film them all, so new writer-directors have been hired and paired with actors playing the new characters.

What's needed, he says, is content that's built specifically for the Web. It doesn't need to be lit like a film – that would make it feel less real.

Beckett tried to explain to the executive that the central theme of online entertainment was interactivity, as opposed to the passivity of television.

9 Unlike television, where writers sit in a room and come up with a single script, the Lonelygirl15 team comes up with a general plotline and then sends its writer-directors out to produce independent but interconnected videos. All the characters, in essence, have their own show.

13 They don't have a big TV deal, or even a big Internet deal, but they're convinced that what they're doing is important anyway. And they're still here, in Flinders' bedroom. Rose leaps onto the bed and jumps up and down.

This Web series not only looks different, it's made differently than other filmed entertainment.

They don't have a big TV deal, or even a big Internet deal, but they're convinced that what they're doing is important anyway.

outing benefited from the publicity surge and pushed a few of Lonelygirl15's clips close to the million-viewer mark.

Emails flooded in – Amanda now responds to roughly 500 a day. The show has a reliable viewership of 300,000 per video, and the team posts two, sometimes more, each week.

supplemental material is boring.

It hadn't taken them long to figure out, by trial and error, what worked in this new genre. Viewers wanted family and relationship drama mixed with a rich, mysterious backstory that could be explored and debated.

In return, she had to stay home as much as possible and wear sunglasses and a hat when she went out. For Rose, it was a dream come true – she was a working actress. She just couldn't tell anyone.

The YouTube community was sucked into the plot and speculated endlessly about Bree's faith. Some thought she was Mormon; others insisted she was a Satanist. Another group tried to figure out where she lived: The leading guess was somewhere in the Midwest. Viewers spent hours Googling the possibilities and posting their results on YouTube.

Fair enough," the fan wrote back, and then went on to tell Bree the latest news in his life. To many, it didn't seem to matter whether she was real or not. A number of posts appeared on YouTube denouncing the series, but many more responded with variations of this simple statement: If you don't like it, don't watch.

ithin 48 hours, the video had half a million views.

That couldn't have happened on television. A conventional TV episode airs once at a certain time; even if it's great, it can only serve to attract viewers to future episodes. On YouTube, a video can be streamed at any time.

The good ones are watched again and again, sending a clear message about what works and what doesn't. When "My Parents Suck …" broke 500,000 views, Beckett and Flinders realized this wasn't just an experiment or a setup for a film.

Meanwhile, the online celebrity started spilling over into the real world. Rose was browsing for a book in Santa Monica after "My Parents Suck …" was posted and noticed two girls watching her closely. That night, Amanda received an email from a fan: "Hi Bree. My friend and I thought we saw you at the Barnes & Noble in Santa Monica, but it couldn't be you, right?"

If you want to talk to Jessica Rose, you can go to her MySpace page. If you want to keep talking to Bree, use this email."

The editing was too sophisticated and the music too well integrated,

IN EARLY SEPTEMBER, MATTHEW FOREMSKI, the 18-year-old son of a Silicon Valley tech reporter, dug up an old version of Rose's MySpace page. She'd deleted it when she became Bree, but Google cached a copy, and Foremski posted the link to his father's blog. Within 48 hours, The New York Times, the Los Angeles Times, and a slew of TV stations ran the story. The jig was up.

hadn't taken them long to figure out, by trial and error, what worked in this new genre. Viewers wanted family and relationship drama mixed with a rich, mysterious backstory that could be explored and debated. > The YouTube community was sucked into the plot and speculated endlessly about > Bree's faith. Some thought she was Mormon; others insisted she was a Satanist. > Another group tried to figure out where she lived: The leading guess was > somewhere in the Midwest. Viewers spent hours Googling the possibilities and > posting their results on YouTube. >

explored

(One viewer annotated each item with its SKU number.) Could it be, one fan wondered, that the whole thing was an elaborate ad

lucrative career as a surgeon before he started making little videos and posting them online.

Miles, it's time you quit being a doctor," he said. "We just passed 200,000 views."

When viewers suggested that he had a crush on Bree, they changed the story line to include a romance.

#4 The YouTube community was sucked into the plot and speculated endlessly about Bree's faith. Some thought she was Mormon; others insisted she was a Satanist. Another group tried to figure out where she lived: The leading guess was somewhere in the Midwest. Viewers spent hours Googling the possibilities and posting their results on YouTube.

"I don't want you to ever set foot in another TGI Fridays," he said, explaining that he'd pay her #14 $500 a week to play Bree full time . #13 In return, she had to stay home as much as possible and wear sunglasses and a hat when she went out. For Rose, it was a dream come true – she was a working actress. She just couldn't tell anyone.

so his father, a marketing executive at an IT company, agreed to invest in the newly formed Lonelygirl15 production company. Beckett immediately called Rose

but Google cached a copy

#17 "I don't want you to ever set foot in another TGI Fridays," he said, explaining that he'd pay her #16 $500 a week to play Bree full time . #15 In return, she had to stay home as much as possible and wear sunglasses and a hat when she went out. For Rose, it was a dream come true – she was a working actress. She just couldn't tell anyone.

It was a medium in its own right.

It hadn't taken them long to figure out, by trial and error, what worked in this new genre. Viewers wanted family and relationship drama mixed with a rich, mysterious backstory that could be explored and debated.

IN EARLY SEPTEMBER, MATTHEW FOREMSKI, the 18-year-old son of a Silicon Valley tech reporter, dug up an old version of Rose's MySpace page. She'd deleted it when she became Bree, but Google cached a copy , and Foremski posted the link to his father's blog. Within 48 hours, The New York Times, the Los Angeles Times, and a slew of TV stations ran the story. The jig was up.

In short, they were planning to exploit the anonymity of the Internet to pull off a new kind of storytelling, and they worried they were on shaky legal ground.

Plastic surgery might be an essential part of the entertainment industry, but he wanted more. He wanted to direct.

Now, as a result of Lonelygirl15, he's represented by a top-tier Hollywood talent agency and has been interviewed on MTV, CNN, and NBC Nightly News. He even has business partners: a former doctor named Miles Beckett and husband-and-wife lawyers Greg and Amanda Goodfried. Together, with next to no budget, they have created a show that illuminates the future of television.

So today, two weeks after the revelation that the show is fictional, Flinders is filming the 45th two-minute installment of the series and pushing into new territory. What began as a quirky story about a religious girl fighting with her strict parents and her boyfriend is poised to break out of the bedroom and into a full-blown international thriller.

Last week, he spotted his neighbors – two Playboy playmates – and invited them in. They glanced at his room, got suspicious, and quickly left.

It's all the more engrossing because viewers can correspond with the characters and even affect the plot.

Welcome to the set of Lonelygirl15, the breakout Web hit that, in September, was unmasked by fans as a work of fiction. What nearly a million people thought was the room of a sweet, charismatic teen named Bree is actually the Beverly Hills bedroom of Lonelygirl15's cocreator Mesh Flinders, an unshaven 27-year-old who is fighting the flu and running a fever of 101. He hasn't left this room for more than 24 hours. "I've got no reason to leave," Flinders says, rubbing his bloodshot eyes and then blowing his nose. The room smells like sweat. "I write the scripts here, we shoot them here, and I sleep here. Why leave?"

A Hollywood movie is understood to be fictional. Vlogging on YouTube is not.

But this isn't what it appears to be: Almost everything in the room was bought from Target on the same day, and the price tags are still hanging from some of her stuff. The closet is filled with men's clothing, and in the corner two guys huddle around a laptop and stare at the webcam feed.

When the show started in June with a two-minute YouTube posting by Bree – played by actress Jessica Rose – Flinders would rearrange his room after each shoot.

When the show started in June with a two-minute YouTube posting by Bree – played by actress Jessica Rose – Flinders would rearrange his room after each shoot. >

So today, two weeks after the revelation that the show is fictional, Flinders is filming the 45th two-minute installment of the series and pushing into new territory. What began as a quirky story about a religious girl fighting with her strict parents and her boyfriend is poised to break out of the bedroom and into a full-blown international thriller.

He'd take down the pictures of Rose as a baby, stash the stuffed animals, and swap out the girly bedspread for his more masculine blue-and-white-striped blanket. Now, three months into the project and with hundreds of thousands of regular viewers, he doesn't bother

He wrote short stories about her, and when he tried to make it as a writer in Hollywood, he put her in his screenplays.

As a camp counselor, he told fireside tales about her experiences.

Welcome to the set of Lonelygirl15, the breakout Web hit that, in September, was unmasked by fans as a work of fiction. What nearly a million people thought was the room of a sweet, charismatic teen named Bree is actually the Beverly Hills bedroom of Lonelygirl15's cocreator Mesh Flinders, an unshaven 27-year-old who is fighting the flu and running a fever of 101.

He got picked on for being small, and there was no escape: The children attended classes taught by the adults of the commune, which was isolated in the windswept hills of western Sonoma County. When he turned 14, Flinders was sent to a Catholic high school, where he was regarded as a hippy devil worshipper, beaten up, and thrown into a dumpster.

He thought that a dramatic story from the point of view of a video blogger would be more captivating. Flinders, it turned out, had the perfect character.

Beckett ordered a pitcher of margaritas and explained that they wanted the vloggers of the YouTube community to believe that Bree was real.

commune

Plus, to fully harness the medium, they intended to carry on email correspondences with YouTubers while posing as Bree.

Flinders rationalized the deception, noting that viewers wouldn't expect Mark Hamill to point out at the beginning of Star Wars that he wasn't Luke Skywalker.

Flinders shrugs it off; the room is an upgrade. Six months ago, he was living with his 96-year-old grandmother in rural Central California. Now, as a result of Lonelygirl15, he's represented by a top-tier Hollywood talent agency and has been interviewed on MTV, CNN, and NBC Nightly News. He even has business partners: a former doctor named Miles Beckett and husband-and-wife lawyers Greg and Amanda Goodfried. Together, with next to no budget, they have created a show that illuminates the future of television.

"It's the producers from Law and Order," she says. "Do you want me to answer it?" "Let it ring," Flinders tells her.

Beckett says. After four years of medical school and a year of residency, the 27-year-old dropped out of the

Lonelygirl15 is a mashup of homemade video diary, soap opera, and mysterious, hint-laden narrative like Lost

it's a thrillingly uncharted creative landscape, and he has no interest in abandoning it for the tired conventions of film or television

Flinders himself is startlingly uninterested in traditional TV. He grew up without it and rarely watches it now.

Plus, to fully harness the medium, they intended to carry on email correspondences with YouTubers while posing as Bree. In short, they were planning to exploit the anonymity of the Internet to pull off a new kind of storytelling, and they worried they were on shaky legal ground.

But nobody bought his scripts: Agents and producers didn't think much of the character he had created.

The room behind her could be anywhere in America – there's a pink floral-print bedspread, a half-dozen stuffed animals, and a framed picture of a rose on the wall.

It's too much work, even though it has blown some great opportunities for him.

After working a few years as an assistant to an independent director

After working a few years as an assistant to an independent director

YouTube is basically going under the assumption that there's this community in place to blindly create content on YouTube's behalf without much in the way of compensation."

What Uncle Miltie and the Super Bowl and Survivor have always offered is something to talk about at the water cooler, at the nail salon, or on IM.

For instance, if you are, say, Meow Mix, and you bought ads adjacent to cat-related videos, how surprised and disappointed you might be to learn you have sponsored a YouTube video uploaded by someone named mrwheatley and titled "exploding cat." Or the one from qu1rk89 titled "exploding cat." Or this one: "ma907h eats dead cat," which shows a guy … oh, never mind.

Will advertisers risk associating themselves with violence, pornography, hate speech, or God knows what lurks out there one click away?

#2 Will advertisers risk associating themselves with violence, pornography, hate speech, or God knows what lurks out there one click away?

that so many people are already on YouTube

Everyone else wants to see what everyone else is seeing and enjoying."

Advertisers and brands are enormously risk averse,

Supan insists that YouTubers have done an excellent job of policing their own space

Will advertisers risk associating themselves with violence, pornography, hate speech, or God knows what lurks out there one click away?

Will advertisers risk associating themselves with violence, pornography, hate speech, or God knows what lurks out there one click away? " Advertisers and brands are enormously risk averse, "

And with a $177 billion total domestic ad budget at stake, nobody wants to be monkeying around.

And prosper, despite everything, for one overriding reason: 100 million streams a day.

"What it has going for it is its sheer size. In a fragmented world, there is a need for community and a need for massness."

"There's still a desire to have a shared cultural context. We hunger for things we can discuss."

waiting for a technological solution

that ask members to rate each video against various quality and suitability criteria.

but also to make much of it available to amateur video makers in exchange for a split of ad revenue.

What Uncle Miltie and the Super Bowl and Survivor have always offered is something to talk about at the water cooler, at the nail salon, or on IM.

The Web has become the land of the free.

He sold razors in bulk to banks so they could give them away with new deposits ("shave and save" campaigns).

Milton Friedman himself reminded us time and time again that "there's no such thing as a free lunch. "But Friedman was wrong in two ways. First, a free lunch doesn't necessarily mean the food is being given away or that you'll pay for it later — it could just mean someone else is picking up the tab. Second, in the digital realm, as we've seen, the main feedstocks of the information economy — storage, processing power, and bandwidth — are getting cheaper by the day. Two of the main scarcity functions of traditional economics — the marginal costs of manufacturing and distribution — are rushing headlong to zip. It's as if the restaurant suddenly didn't have to pay any food or labor costs for that lunch. Surely economics has something to say about that?

Chris Anderson (canderson@wired.com) is the editor in chief of Wired and author of The Long Tail. His next book, FREE, will be published in 2009 by Hyperion.

Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.

But tell that to the poor CIO who just shelled out six figures to buy another rack of servers. Technology sure doesn't feel free when you're buying it by the gross. Yet if you look at it from the other side of the fat pipe, the economics change. That expensive bank of hard drives (fixed costs) can serve tens of thousands of users (marginal costs). The Web is all about scale, finding ways to attract the most users for centralized resources, spreading those costs over larger and larger audiences as the technology gets more and more capable. It's not about the cost of the equipment in the racks at the data center; it's about what that equipment can do. And every year, like some sort of magic clockwork, it does more and more for less and less, bringing the marginal costs of technology in the units that we individuals consume closer to zero.

From the consumer's perspective, though, there is a huge difference between cheap and free. Give a product away and it can go viral. Charge a single cent for it and you're in an entirely different business, one of clawing and scratching for every customer. The psychology of "free" is powerful indeed, as any marketer will tell you.

this business model is now the foundation of entire industries: Give away the cell phone, sell the monthly plan; make the videogame console cheap and sell expensive games; install fancy coffeemakers in offices at no charge so you can sell managers expensive coffee sachets.

Free! Why $0.00 Is the Future of Business

As much as we complain about how expensive things are getting, we're surrounded by forces that are making them cheaper.

What does this mean for the notion of free?

Soapbox in direct competition with YouTube

So what about "Evolution of Dance," for instance? To put together this medley, did Laipply license 30 songs? "Don't know," replies YouTube senior marketing director Julie Supan. "You'd have to ask Judson." In the next breath, though, she suggests that the brief music excerpts fall within the bounds of fair use.

Until about five minutes ago