KateModern is either a lonely art student in London, with serious personal issues, or a podcasting target of some crazed cultists. Or she is the future of entertainment in our new multimedia world. Or, quite possibly, she is none of the above.

Although she has a boring boyfriend, a wacky co-student called Charlie, and a nice but dim mate called Gavin, Kate’s life is otherwise empty. She spends a lot of time loading her video diary onto a website called Bebo. Anyone who pays attention to her podcasts, or her pals’, will gradually sense the sinister presence of the Order, a twisted version of the Jedi knights who are convinced there is something in Kate’s blood. In this, she is an electronic cousin of LonelyGirl15, an equally isolated young woman, with similar religious stalkers, who briefly turned the YouTube site upside down.

LonelyGirl15, or Bree, started her video diaries on YouTube in June 2006. She complained of isolation because her religious parents home-schooled her and discouraged her from making friends. She posted video replies to other popular bloggers and gradually encouraged their fans to look at her diaries and MySpace page. She was clearly in trouble. Her parents were more than controlling, and distinctly unusual things were happening to her. People wanted to help. As she chatted away, however, web users and journalists suspected a sting, and ultimately outed LonelyGirl as a fictional character played by a New Zealand actress, Jessica Rose, and created by a screenwriter, Ramesh Flinders, a lawyer, Greg Goodfried, and a former doctor, Miles Beckett.

Some people felt conned. Others didn’t care. In March 2007, six months after her cover was blown, LonelyGirl was voted fourth best series in the inaugural YouTube awards. Now Bebo, a site where people paste photos, write blogs and chat, has commissioned her makers to create KateModern.

Bebo has a problem, the same one afflicting other social networking sites: though it is the UK’s sixth most popular site, it can’t attract high advertising rates. KateModern offers not just daily two-minute clips, but puzzles and mysteries in the plot that carry over into “real life”, allowing viewers to participate in the story line. KateModern, the site hopes, will be filled with product placement.

“At every stage, a user is involved with the story, whether blogging, uploading photos or simply watching the latest episode. There will also be the chance to be involved with the brands that take part,” explains Bebo’s Joanna Shields. “I’m not talking about traditional product placement, but the integration of brands such as Gillette, Pantene, Microsoft’s Windows Live, Disney and Orange into the plot, in a way that gives users a reason not only to remember the brand, but to create a long-term relationship with it.”

For an example of how this “integration” works, it’s worth looking at a LonelyGirl episode. In March, as part of a sponsorship deal, Bree met her friends, pulled out a packet of Hershey’s Ice-breaker Sours Gum, offered it to them, then snatched it back and scoffed the lot. Too good to share.

The low cost of internet dramas, coupled with advertiser interest, has spawned imitators. Big Fantastic, the team behind a popular online series called Sam Has 7 Friends, is developing Prom Queen, a scripted, serialised mystery told over 80 90-second episodes and backed by Vuguru, the indie studio set up by the ex-Disney chief Michael Eisner. Expect more. The problem is, they’re likely to feel a bit similar: the internet, for now, has found only one good story.

As far back as 2000, a video diary from a girl calling herself Online Caroline was tempting and teasing users in much the same way LonelyGirl15 does. A team of writers interacted with viewers by e-mail, drawing them into the plot. Over 24 days, Online Caroline was gradually starved to death by her creepy boyfriend as part of a strange scientific experiment involving his mysterious corporation. At the end, the viewer felt complicit. A sequel, involving less mystery, performed badly.

The key moment in any new medium is when it finds its defining voice. The printing press began by producing books in a literary form its audience understood – the letter – and relied heavily on the epistolary novel until Robinson Crusoe et al settled things down and the omniscient narrator emerged. A new medium may prove better at a particular type of story and, effectively, steal it, as broadcasting took cliffhanger tales away from magazines and newsreels away from cinema. So far, the only fictional form that seems to work online is KateModern’s short-form mystery.

LonelyGirl’s Beckett admits that this problem has yet to be solved. “We’ve found a format,” he says, “but maybe not the format. The blogging works, as do talking to camera and characters filming video – that’s all crucial. On television, you don’t care where the camera is, but for stories like this – because the idea is that the character is real – you have to explain how they can upload video and so on. That’s why you’ve only seen comedy writers do skits, rather than develop a sitcom or romantic comedy online.”

The television industry will be watching Beckett’s attempts keenly, aware that daytime viewers are drifting online and that illegal downloading is hitting its pockets. There is a sense that the net must be the answer. In America, CBS is contemplating a virtual world based on the Star Trek franchise, into which players can walk – rather like the role-playing game Second Life. The problem with placing storytelling in the hands of the public, however, is that Old Curiosity Shop World would be unlikely to let Little Nell die. And try to imagine a future where Big Brother contestants controlled the plot lines of our entertainment.

It’s a point I’d like to put to KateModern. She seems like a smart girl – her profile shows her looking attractive and intelligent, she is an art student and she is keen to chat to people online. The thing is, her story isn’t live yet, and her team of writers has still to arrive. So, all I’m left with is her enigmatic smile and a deep electronic silence.

KateModern starts at www.bebo.com from July 16

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