One of the topics I first wrote about on this blog (before I even made it public) was the MyspaceTV series Quarterlife. 

Quarterlife was the product of two fairly well known TV producers teaming up to make an hour long series just for MySpace.  I found the idea interesting because the cost was so low and the creators said they would could approximate the look and feel of mainstream TV shows. 

Things took an odd turn when the Writer's Guild Strike got it promoted to Prime Time TV (specifically NBC).  It aired once, but didn't do so well...

NBC has pulled the plug on its Internet-to-TV experiment "Quarterlife" -- a decision that apparently won't bother its creator too much.
After a premiere that pulled in historically low ratings on Tuesday, the series from "My So-Called Life" creators Marshall Herskovitz and Ed Zwick has been pulled from the 9 p.m. Sunday timeslot where it was scheduled to air for the next several weeks. "Deal or No Deal" and a "Law & Order" rerun will fill the hour for the next two weeks.

A lot of people see this as a set back for Web based projects in the future.  To quote Carolyn McCarthy of Cnet's "The Social"

It's undoubtedly a setback for those hoping to see Web video make a clean transition to the living room TV: Quarterlife, the hyped-up Web series from the co-creators of Thirtysomething and My So-Called Life, had a very disappointing network debut on NBC and may be on the chopping block.

With all due respect to the people she's referring to they're dramatically missing the point. 

Network TV is expensive which means they need a lot of people watching it to justify the cost.  That means they must play to several different demographics at once.  This is why you see romance in your Sci-Fi thrillers or action in your family dramas.  They need to draw a wide swath of people.  Cable made niche shows a little more viable through an alternate revenue stream but even cable shows need to draw several million people to get by.

The opportunity in Web based projects is they can play straight to one demographic.  Web shows only need a few hundred thousand viewers to be profitable so they can play strictly to one niche and (hopefully) create a more enjoyable show for that niche. 

So the goal isn't to transition to TV its to be more focused than TV (and hence more enjoyable).  

The promise of Quarterlife was that it was established TV producers who could bring those sensibilities to the Web based world and define a way to film and produce a web based show that would appear to equal the quality of a mainstream show.  Not to make something that could actually exist on mainstream TV (the only reason it ended up on NBC was because the networks were desperate)

That all said this is a set back in another way.  Quarterlife failed on its first episode which means it wasn't that people thought it was bad its that people didn't bother to watch it at all.  This shows that web based video has a nasty stigma attached to it in the eyes of your average viewer.  For the web to become a viable platform for scripted video it will have to overcome that prejudice which is no small task.