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The South by Southwest (SXSW) interactive festival started in 1987 as a local music festival, and after adding the Film and Interactive festivals, has come to represent one of the premium festivals featuring cutting-edge discussion of new media issues and ideas.

This year, one of the highlights of the festival was the “Comedy on TV and the web” panel, which featured five panelists who brought a unique perspective on the development and distribution of comedy over the web. The panel was moderated by Ricky Van Veen (Co-Founder/Editor-in-Chief, CollegeHumor.com) and featured Meredith Scardino (writer for ‘The Colbert Report’), Keith Richman (CEO, Break Media), Avner Ronen (CEO, BOXEE) and B.J. Novak (The Office).

The first question asked by Van Veen was why has comedy led the way of driving shared internet content. Richmond suggested that the short videos featuring humor allows a quick payoff to the watcher, unlike more serialized content where character development is intrinsic to the enjoyment of the videos. Scardino suggested that many of the comedy videos shared are like America’s Funniest Home Videos, except without all that messy Bob Saget dialog and it can easily be shared with your friends. Novak suggested that the videos were like music, like a song, with logic and structure and a payoff to it. It’s also like music in the fact that you either “get” the humor or you don’t.

Meredith Scardino was asked what some of the big differences were in the internet content for Letterman (where she was a writer) to the content featured online for ‘The Colbert Report’. Scardino said that with Letterman, the online content was very supplemental to the show. However, with ‘The Colbert Report’, the Colbert Nation army is motivated to do what Stephen tells them to do. The marketing of the online content is simply Stephen every night telling the Nation to do what he asks. She used the recent NASA voting as an example, and stated that the stats are high for the Colbert Nation participation. The show was created at its inception with the Nation in mind. User submitted content has always been featured prominently in the show. She mentioned the McCain Green Screen Challenge, mentioning that a writer saw the video with the green screen in the background and suggested that it would be an excellent call for the Nation. She stated that the Nation uploaded a thousand videos after Stephen issued the challenge. She also mentioned the Lawrence Lessig interviews that were remixed, using Stephen’s “copyrighted” material. Many of the remixes were quite unforgettable. And she once again emphasized that the Nation is a big part of the show.

B.J. Novak was asked about the differences between creating webisodes of “The Office” verses actual shows. Novak said that everyone is trying to figure out the role of the webisodes. They’re funny and popular and people like them.

Van Veen then mentioned that those in the audience of the panel were on the cutting edge of web content, and then asked whether the panel thought that this crowd was living in a bubble? Are the trendsetters the people canceling TV subscriptions to watch television exclusively online, or are they an anomaly? Ronen suggested that lots of people are canceling or downgrading their cable. People can now easily stream music and watch TV through the internet with just a $10 investment in a cable to hook up their TV’s to their computers. Just because content is produced for television doesn’t mean that people care how it gets there. This process of getting access to media without having to go through cable companies is going to get easier, and cable is going to have to adjust.

The next question for the panel asked that in five to ten years, will people be able to tell the difference between web and TV content? Novak suggested that there are places for both. But people don’t care if it’s NBC providing the content or just “some guy”. When asked how people will find this new content, it was suggested that Online brands might be the vehicle. Richmond said that in general some of those brands are challenged, the brand is the show not the network. To which Scardino responded, won’t that cut down on your site since most of your videos feature local newscasters?

Van Veen then explored the relationship between TV and online. He used the example of the popularity of the Louis CK on Conan clip – would this content be enough to go viral on its own, or does NBC give stamp of legitimacy to clips like this? Scardino said that Conan gave it the exposure, but the web 2.0 people who made the video go viral gave it the stamp of legitimacy. She went on to state that the question is where it’s seeded, not who produced it, but the push is needed, how do you get it discovered? In this case, Conan is the filter.

In a follow-up question, Van Veen brought up the issue that asks does television give content more legitimacy than the web? Scardino then told the story of how her parents are a little behind with the times on what is on television. They could brag to their friends when she worked for Letterman, but her parents have a much harder time bragging about her writing job at ‘The Colbert Report’, as her parent’s friends have not heard about Colbert.

Touching back on the issues of legitimacy, Novak asked if the Chocolate Rain guy moved you to tears, would you pass it on? Or was it driven by the comedy? Van Veen stated that people like sharing jokes better than a sad story. Scardino added that amazement is also good, such as the Christian lion reunion, mentos diet coke guys, those tend to be the things that move people, but comedy is huge part of being moved as well. Richman also made the point that if you look at the numbers, there is much more comedy than “moving” content on the web.

Van Veen’s next question asked if the panel felt that people producing content online saw their exposure as a stepping stone, or does the panel see the end of the game as a successful online presence? Scardino responded with the fact that a person can can throw out a site with no validation, but it’s harder to get on TV. There’s a million places that would validate the content online. Novak used the example of the Lonely Island guys, who could not skip the TV step, although they could be big online once they had been established on television first. Ronen made the point that some content can transition to TV, while some cannot. But today, while TV is limited and controlled, some lines are going to blur. Richman discussed the end result by saying that more money is made by being on TV, but creative freedom is often lost.

Novak was asked if he thought celebrities are scared of the internet. Novak responded by saying he felt that the infrastructure isn’t there, so yes, Hollywood is scared. Someone doesn’t always know if the product is going to be good. The stars often don’t know who they are working with, and the internet still has a Wild West feel to it. Richman stated that the internet is a democratic environment, and not everything will be big. Small names can do better than big names – with the internet, there is no guaranteed distribution or audience.

Scardino used the example of successful comedians like Michael Cera and Zach Galifianakis who have made it online. Novak responded with “Now, imagine bragging to your mom that you work with Zach – Go online, go to this site …”

The panelists were asked how they felt that social media sites like Twitter were affecting social viewing and if it might save appointment TV. Novak said no. Ronan mentioned that Twitter is more challenging, because there is no such thing as appointment TV anymore, and maybe people can invite their friends to view the shows with them online.

Novak stated that the best answer to that question is what you want it to be is probably what it will be. Whatever people are hoping happens will happen. He used the example of speaking to his father and asking if he thought that books are going to be all electronic someday. Novak’s father responded a resounding – NO! He then said, “Then they won’t be, as that is not what the consumer wants. But then the Amazon Kindle looks exciting, so the consumer decides these things. No one is going to shove anything down your throats, that’s what she said. You’re going to pay for what you want and that’s it.”

The panel’s next question was – do you think that the era of watching a 60-minute show are over? Ronan explained that it all depends on what the consumer wants. If a person is on a train, they may just want simple and short clips, while if the same person is at home, they may want to watch a whole show or even a movie. There will be more niche content, but there will still be a place for big budget. Novak made a very interesting point that the ‘passive’ shows, the one you watch after the show you actually tuned in to see and just don’t feel like changing the channel, are in big trouble with the control that people have with their media content.

When asked what technology are they most excited about, Richman mentioned that he was enjoying the blending of the internet and TV models, which hasn’t fully happened yet but is on the way. Because of economics, networks are going to have to make smarter bets. Hits are still going to be hits, but there’s just not going to be much mediocrity. Scardino added that the platform doesn’t matter, good content will survive, it’s just how you watch it that will change. Richman then added that multi-talented people will be placed well, people that can direct and act and write. Sasha Baron Cohen was used as an example, as was Novak, who both writes and acts on “The Office”.

As for who is getting that multi-talented work model correct in mainstream entertainment, Scardino suggested the ‘Tim and Eric Awesome Show’. She has never seen the show on television, and always watches it on her computer or on iTunes. She said that it doesn’t matter where you watch that show, it works.

The audience was allowed to ask a few questions. One question that was asked was their thoughts on the influence of social media on distribution. Van Veen mentioned that Facebook has been a big help in distribution of their independent contact. Then when Richman discussed the penetration of the different sites into distribution of content, Novak gave the audience another little “That’s what she said” wink. And stated that he had done that after the front row busted out in laughter.

Another audience member asked about the difference online between sketch and character driven comedy, as sketch was what was mostly discussed during the panel. Novak said that with character comedy, people need to get exposed to characters, and Van Veen said that people needed the same amount of time to be exposed to characters, but with online videos they are exposed in shorter segments.

The question was asked of Novak if there was any scene that took off in a surprising way, and does he have a feedback loop for the content that is featured online? Novak said that remixes [fanvids] are watched very often and that fanvids are another way to for the fans to communicate with the show. He discussed how every day at lunch on the set of “The Office”, there is a “video DJ” who plays videos on everyone’s computer monitors on the set, and often these videos are fan remixes. He mentioned that everyone was thrilled with the recent Ryan Started The Fire fanvid. The writers can gauge interest in a particular topic from these videos. He also said that the feedback loop is different from TV to web. On the web, people see comments and hit counts and traffic links of where people found the content, whereas on TV, there is simply one Neilsen number. Scardino mentioned at this point that there is a “certain person who she works with” who checks online to see if people liked his jokes. When Van Veen suggested “Colbert?”, she just flashed a coy smile.

Someone asked if they though that networks take the online buzz seriously and does it have influence? Novak mentioned that Family Guy came back after strong internet buzz, so the internet can definitely work lke that. “Beloved” works for internet, like funny videos, but “events” like the Oscars, the Emmy awards, sports events, work best on TV.

I really enjoyed the panel and am glad that the different participants put so much thought into their answers and gave such an interesting perspective on how the internet is changing the distribution of comedy.

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