Ex-AOLers Set Up Documentary Film Site

Plan to Lure Filmmakers by Splitting Ad Revenue

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NEW YORK (AdAge.com) -- Former AOL executives are looking to get into the online-video market by setting up a site to stream documentary feature films.
Ted Leonsis
Ted Leonsis Credit: AP

SnagFilms, headed by longtime AOL Vice Chairman Emeritus Ted Leonsis, eschews traditional video domains such as AOL and Microsoft's MSN, instead adopting a YouTube-esque route and allowing users to embed films on their own web pages or Facebook and MySpace pages.

SnagFilms has about 200 documentaries, such as "Super Size Me" and "State of the Union" and films from reputed outlets Arts Alliance America, PBS and Seventh Art Releasing, available to stream for free.

No user-generated content
Unlike other video sites, including ones Mr. Leonsis is banking on to "snag," or share, the site's films, SnagFilms is not open to user-generated content. Instead, professionally produced videos must be submitted and accepted. The company promises filmmakers 50% of ad revenue generated from 90 seconds of advertising threaded into each hour of film (divided into six 15-second ad slots).

The advertising is sold through AOL, which will have rights to use SnagFilms content on AOL sites.

The business is backed by AOL co-founder and Revolution chairman Steve Case and former AOL executive and former Time Warner board member Miles Gilburne, now a venture capitalist. Former Discovery Communications executive Rick Allen is SnagFilms' CEO.

"Because everything is digital now, costs are down, quality is up, and we have this whole new generation of nonfiction filmmakers," Mr. Leonsis said in a statement. "There's more product but less distribution. I wanted to solve that problem."

Struggle for attention
The documentary has long been a category that has struggled to gain mainstream attention. Mr. Leonsis' experience in the genre and watching quality films lose momentum, often because of minimal exposure, prompted him to create SnagFilms.

"The Oscar-winning documentary of 2007 did $250,000 at the box office, which means that only 25,000 people saw it," Mr. Leonsis said. "Most videos on YouTube see at least 100,000 views, which would be like $1 million at the box office."

Mr. Leonsis' own documentary "Nanking," about the Japanese invasion of the Chinese province, was eventually picked up for theatrical release and distributed by HBO but fell short of the 120 selections at the 2007 Sundance Film Festival.

With SnagFilms, however, Mr. Leonsis expects to broaden the appeal of the genre to viewers outside of the traditional documentary fan.

'A YouTube world'
"Everyone has a camera in their telephone. Everyone's growing up in a YouTube world," Mr. Leonsis said. "Documentary reality-based programming won't be a [niche] but a major way for self-expression."

The site, which urges users to become "filmanthropists," will also allow viewers to support the causes promoted by featured documentaries by linking them to participating nonprofits.

"I believe it will be a big, important business," said Mr. Leonsis, who is chairman and majority owner of the company. "It's an entrepreneurial endeavor. We will be investing tens of millions of dollars eventually. I think I can show a lot of movies and raise money for a lot of causes while we are building an audience and building value for this company."
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