(FORTUNE Magazine) – Hey, Ben Affleck! What's your quick take on broadband?

"What's exciting about broadband is that it essentially expands the possibilities for what you're able to do with the Internet, kind of across the whole spectrum, so it's difficult to really separate what is a broadband component from a narrowband component, but ultimately what it means is that you'll be able to use the Internet in a more fluid and interactive way in almost anything that you're doing, if you're designing and building for that kind of eventuality. I think that you're definitely behind the curve if you're not developing and designing your product for the time when broadband becomes pretty much ubiquitous, which I think is a year and a half. Within four years, there will be 50 or 60 million people using broadband connections to the Internet, between cable and satellite. What we're now calling broadband, I think ultimately will seem incredibly slow, I mean the next generation beyond T3, as that becomes more affordable. We're sort of banking on a third generation of broadband wireless connectivity, which is I think maybe three, four, five years out. But I think that will be really expensive and only available to a few people initially, and then the prices will come down and it will be available to more people. One of the reasons why even traditional entertainment transposed to the Web right now frankly doesn't work that well is that it doesn't look that good and doesn't sound that good. It's cumbersome, it's balky, because the connectivity is so poor that you can't really get anything. We're developing stuff that's applicable today and stuff with an eye particularly toward this point of convergence...."

Whew! Actually, Affleck didn't stop there. He went on for another couple of minutes, 4:37 in total. (If you don't believe it, go to "Ben on Broadband. Uncut." at www.fortune.com/fortune/broadband.)

To give this unbounded soliloquy some context: Affleck and I are in Santa Monica talking about a brand-new company that Affleck, his pal and fellow Oscar winner Matt Damon, and two hotshot young Hollywood producers, Chris Moore and Sean Bailey, have created. It's called LivePlanet, and it aims to do what no Web startup or giant studio has been able to pull off--that is, launch a successful new-media entertainment company.

A few minutes earlier, a comely young blond woman approached Affleck and asked him about LivePlanet. He explained it to her, and she asked him provocatively, "Oh, but you're just the figurehead, right?" Affleck looked at her, a million dumb-blond lines flooding his brain. But he just took a deep breath and said slowly, "No. Not at all."

In fact there's good reason to believe that this company is more than just a vanity project for young men of a generation that considers startups cool--even though some of the best in the business have been unable to succeed. If you've been following the new-media space, as they call it, you know that these appear to be the worst of times for this nascent subindustry. Older companies like Oxygen Media have failed to generate much buzz, while more cutting-edge outfits are on (or over) the brink. Pop.com, the vaunted venture backed by Steven Spielberg of DreamWorks and Ron Howard of Imagine Entertainment, recently announced it was essentially shutting down. DEN (Digital Entertainment Network)--backed by Intel and Chase Capital Partners--recently filed for bankruptcy. And Shockwave and Scour are laying off dozens of employees.

A big reason that we're seeing all this carnage is that nobody has been able to articulate what broadband entertainment is. Is it movies on your computer? Games on your telephone?

Another problem is structure. On the one hand, piecing together cross-platform projects (to slip into the vernacular) at the tribalistic media conglomerates is nearly impossible. On the other hand, a startup looking to put programming on the Web and in movie theaters, for instance, doesn't have access to top-tier content or the muscle to get it distributed. "That's the beauty of LivePlanet," says CEO Chris Moore. "We think we have the Web know-how and great content, plus we know we can get traditional projects made."

When you hear LivePlanet's business model, it actually sounds rather simple. But it's safe to say that no one in Hollywood or New York or New Delhi for that matter, is doing anything close to it. What LivePlanet is attempting to create is entertainment that will be enjoyed by audiences in traditional media (e.g., TV and movies), in the real world (like, say, a live sporting event), and on the Internet.

The only way to convey this particular vision of convergence is to describe a LivePlanet project. Take Runner, a radical multimedia production for which ABC has agreed to pay many millions. It's possible that Runner will become the most watched show on television, or induce nationwide rioting (or both). The show goes like this:

Some person in the U.S. is selected to be the Runner. This person has to elude capture in the continental U.S. for 30 days while accomplishing 15 tasks, such as visiting a McDonald's in New Mexico during a set 48-hour period. If he succeeds, he wins $1 million. Television and Web audiences track the Runner and try to find him, in the real world. If anyone catches the Runner, that person gets the money instead. The Runner will carry a hidden camera (and hidden cameras will follow him) as he, for instance, moves from a Caesar's Palace buffet in Las Vegas to a Miller brewery tour in Milwaukee to a rock concert in Atlanta.

ABC plans to air the show once a week starting next summer. It's possible, though, that the real action will be on the Runner Website (not up yet), which, if accessed with broadband (though you don't need it to play), will look like something out of Mission: Impossible. The demo has maps of where the Runner has been, his heart rate and blood pressure, his credit history, panting audio, and real-time video clips. A ticker shows how much prize money he is accumulating. "And if the show's a hit," says LivePlanet's Bailey, who came up with the idea, "what's to stop ABC from airing it more often, running 15-minute updates, or checking in with the Runner on Good Morning America?"

The folks at ABC are going gaga. Says Andrea Wong, the network's vice president of alternative series and specials: "The thing I love about Runner is that anyone in America can be involved in the show whenever they want to be. It is a huge initiative for the network. We think it's going to be a huge event, and we're putting a huge amount of resources into it." Huge. ABC keeps the revenue from the TV show of course, while LivePlanet gets the bulk of the ad revenue from the Website. Can you imagine the Web traffic? Think about it this way: What if Survivor had been a live show and America had cast the final vote? (See ya, Richard!)

A second project that LivePlanet has sold, called Green Light, will integrate film, TV, and the Web. (Go to projectgreenlight.com.) Green Light is essentially an online script-writing contest with several twists. Aspiring screenwriters--no professionals, please--submit their scripts to the Greenlight Website. There is no entry fee; instead, contestants are required to read and review three screenplays that others have submitted. Miramax will make the winner's movie on a $1 million (or so) budget (no word on whether meetings with Harvey Weinstein are included). Affleck and Damon will serve as executive producers. The making of the movie will be a 13-episode series on HBO, scheduled for fall 2001. "It's cool, isn't it?" says Billy Campbell of Miramax. "We view it as an 'evergreen'--we'd like to do it every year."

These ideas may sound far out, but the singularity of LivePlanet has attracted high-powered investors: Larry Ellison of Oracle and other tech potentates on the one hand, and Joe Roth, former studio chief of Disney, along with various L.A. types, on the other. The investor pool reflects another LivePlanet goal, to marry Silicon Valley capital and infotech brainpower with L.A. storytelling and distribution. Sure, this formula has blown up in the test tube a couple of times already. But, says Moore, "most times when people in Hollywood talk about new media, they're talking about slapping up entertainment that's not good enough for traditional media, or a Website for a movie which is really just an afterthought. We're looking to bring it to a whole other level."

Though LivePlanet is only months old, the ideas behind the venture go back more than a decade. Back, in fact, to Affleck and Damon's teenage years in the mid-1980s in Cambridge, Mass. "We used to play those early videogames like 'Bruce Lee,' sometimes all night," says Damon. "We collected them. Ben was the real computer geek." Indeed, though Damon's infotech IQ is above average, Affleck's is truly impressive. We are talking about a guy who can distinguish between models of Cisco routers, for goodness' sake! "I've always loved technology," says Affleck. "It's not like I tried to, I just do. Matt and I have always wanted to be involved in technology, interactive entertainment, and the Web." Adds Damon, who is wedded to a wireless two-way BellSouth e-mail device: "Hey, I nominated The Matrix for best picture last year."

Affleck and Damon both dropped out of college (like Bill Gates, Ellison, and Michael Dell)--Affleck from the University of Vermont and Damon from Harvard--to become actors in L.A. (Damon had already landed small roles, including a bit part in Mystic Pizza.) Damon and Chris Moore, who knew each other vaguely at Harvard, met again in L.A. in the early 1990s when Moore was a promising agent at ICM. "I left ICM and was making a movie called Glory Daze," recalls Moore. "I asked Matt if he wanted to be in it, but he recommended his buddy Ben. So we made the movie with Ben, and we all became close."

Then came the group's big break. It was a script that Damon and Affleck completed in the fall of 1994 about a tortured South Boston savant and his struggle to come to grips with his extraordinary intelligence. It was Good Will Hunting. The plan was that Affleck and Damon would be the stars and Moore would produce. Miramax picked up the project, added Minnie Driver, Robin Williams, and director Gus Van Sant, and released the film in 1997. It was, of course, a smash. Affleck and Damon won Academy Awards for best screenplay, and the careers of all three took off. Affleck went on to do Armageddon, Shakespeare in Love, and the upcoming Pearl Harbor, while Damon starred in Saving Private Ryan and The Talented Mr. Ripley. Moore produced American Pie.

Here it may be worth noting that there is an element of truth to all those stories in People and Vanity Fair about Affleck, 28, and Damon, 30: In some ways, they're still just a couple of dudes from Boston. That becomes apparent as we buzz around L.A. in Affleck's black Cadillac, with Damon riding shotgun. Affleck is sharp, engaging, and loves to talk. Damon is quieter, often deferential, and more cerebral. Regular movie-star Joes, smart enough to know they could never do something like LivePlanet on their own.

Luckily they have Moore, 33, who is himself an interesting story. The son of a crusading labor lawyer, Moore grew up in one of those land-that-time-forgot kind of towns, Easton, Md., on that state's sleepy eastern shore. A big bear of a guy, Moore was a star lacrosse player and played some hoops too. He graduated from Harvard in '89 and beelined it to Hollywood. "I always liked the entertainment business," he says in a DelMarVa twang. "Besides, Wall Street at that time wasn't too appealing." (Another reminder of Moore's roots: He drives a late-model white GMC Sierra Crew Cab pickup. And this is L.A., where you are what you drive.) "Chris is the real deal," says Allison Brecker, executive vice president of production at Universal. "His people skills and powers of persuasion are first rate."

After the success of Good Will Hunting, Affleck and Damon set up their production company, Pearl Street (named after a road that ran between their houses in Cambridge), in the ramshackle offices in West Hollywood where Moore's company, Fusion Studios, is situated. Moore chose the name Fusion with an eye toward the merging of old and new media.

In 1998 another young producer, Sean Bailey, joined forces with Moore, moving his production company into Fusion's offices. The 30-year-old son of a biochemical engineer had a pretty impressive track record himself, producing the award-winning cable-TV game show Debt, among other things. He and Moore made a movie called Best Laid Plans together. Then, "late last year, we all began brainstorming about what kind of projects we wanted to do and what kind of company we wanted to have," says Moore. "The four of us came up with the idea for LivePlanet, and we folded our companies together."

The LivePlanet guys set out to find technical help. There wasn't much nearby--Hollywood has long been considered an infotech dead zone. One oasis, however, is the media center at CAA, the agency that happens to represent Affleck and Damon. "I heard their vision and immediately found it very compelling," says Dan Adler, CAA's new-media agent. "Plus, these guys really have the track record to pull something like this off." Adler took the boys back to Boston to visit the MIT Media Lab and to New York to meet with new-media companies such as Razorfish and Viant (which created the CD-ROM demo for Runner).

That was all well and good, but the guys understood that they needed more expertise. "We began to realize that if we ever wanted to build a real company with the potential to scale, we had to go to Silicon Valley both for the technology and the capital," says Bailey.

Bailey had a friend named Marc Bodnick who was a partner at Silver Lake, the Silicon Valley buyout firm. Bodnick took the LivePlanet idea to Silver Lake's Dave Roux, a former Oracle executive, who is beginning to assemble his own keiretsu of companies.

"The first time I heard about LivePlanet I was intrigued, though highly skeptical," Roux explains. "But Marc convinced me to meet with the guys." In early May, Affleck, Moore, and Bailey flew up. Roux told them, "Look, this seems like a great idea, but I don't really want to fool around with this stuff. I don't know if you guys are serious. And it'll just look like star fucking." Go back to L.A., Roux said, and draw up a real business plan.

So the guys did, and they flew back to meet with Roux again. And again. And again. Finally, in June, Roux was persuaded to fund their project. As they shook hands on the deal, Roux whispered to Bailey, "Sorry for the tough love."

Roux brought with him a group of top-tier investors, including Ellison, Liberate CEO Mitchell Kertzman, Dave Limp, also of Liberate, Andy Laursen of Phone.com, and Peter Relan of Webvan. (Bailey calls them "the Roux Tang Clan.") These guys would provide LivePlanet not just seed capital but also experience and technical expertise. Extreme late-night whiteboarding kind of stuff. In the end, the Roux Tang Clan put in somewhere north of $2 million; they are now 20% owners of the company. Minority holders, including ex-Disney studio chief Joe Roth and Dave Goldberg, CEO of Launch, an online music company, own about 10%. The four founders have retained about 50% of the company and have set aside the final 20% for current and future employees.

LivePlanet will in fact be very much a Southern/Northern California mesh. The creative work will be done in L.A., where Bailey and Moore will eventually hire 40 people or so. To head up the team in the north, the company just brought in Jonathan Katzman, formerly an ace programmer at Microsoft. Katzman plans to run all the technology and write all the software in a to-be-determined locale in Silicon Valley. As for the numbers, well, the company should be generating significant revenues next year, once ABC and HBO begin sending in their checks. And the LivePlanet guys say they expect their company to be cash-flow positive by 2002.

Questions certainly persist, though. Sure, Damon and Affleck are smart, but so is the guy who runs the local Ford dealership. Could he make a go of it as an online car dealer? And just how committed are the Fab Four to the project? Are they willing to make this their top priority? Moore, for all his skills, is said to be "stretched pretty thin," according to a Hollywood executive who works with him. And Damon and Affleck will continue to make feature films on their own. "But look at it this way," counters Damon. "We don't need to do this. All of us are so busy now that time has become our most precious resource. We wouldn't be doing LivePlanet if we weren't taking it seriously."

In a strange twist of fate, the LivePlanet crew and I are hanging out in Santa Monica on the day that the failed new-media company DEN is auctioning off its assets--tens of millions of dollars' worth of information technology. And we are only blocks from the bankrupt company's headquarters. "Let's go," I say. "I'll go," says Affleck, who knows the address. We hop in Affleck's Caddie, and in a few minutes we're there. Affleck eases the car up to the curb and jumps out. "I'm staying," announces Damon, slouching down in the seat, baseball cap pulled low, looking to catch some Zs. We stroll into DEN's offices, where Affleck is like a kid at Fenway again. "Look at this Cisco T1000 router," he says. "I should pick some of this stuff up.... Check out those Power Macs. Oh, but they're G3s. Probably only 350 megahertz." And so on. We spend the better part of an hour examining hundreds of sub-notebooks and servers and cell phones. And there's an epiphany too. At one point Affleck looks up and says, "Hey, this is really the end of the road for these guys. This is where we don't want to end up."

It's way too early, of course, to tell if LivePlanet will be a hit. You have to admit that Runner, at least, looks to be a radical, next-step kind of idea. There's no doubt that the rest of Hollywood will be watching this one pretty closely. Down the road LivePlanet could be a mega-IPO or get bought out or be beaten at its own game by the big studios. Or it could simply fail. If that's the case, it will be joining a growing club of fallen high-profile ventures. On the other hand, someone's going to get this right. And the LivePlanet guys have beaten the odds before. Ah, but this is no ordinary sequel.

REPORTER ASSOCIATE Julia Boorstin