A new online distribution system for documentaries launched in July has found widespread consumer adoption, but is still not close to providing substantive income to documentary or low-budget filmmakers.
SnagFilms, launched by former National Geographic Films chief C. Richard Allen and former AOL executive Ted Leonsis, is geared to using the social networking tools of the web to feed a new distribution model for low-budget films.
Users can download widgets for any one of more than 550 documentaries available on the site, and watch the film -- which has about 90 seconds of advertising interspersed through it -- for free. SnagFilms shares the revenue, half and half, with the filmmaker.
But the films need to be seen hundreds of thousands, or even millions, of times before filmmakers can see substantive income from advertising revenue.
On the other hand, the site allows filmmakers to earn full revenue from any DVD sales, which are promoted along with the free download. And viewers are also encouraged to donate money to non-profits associated with some of the films.
“We want to start to open up the expansiveness of the audience by making it free, reducing the friction of trial and error,” said Allen. “A lot of people love documentaries but if you say documentary, they say ‘Ugh, that's a little too much work.’ So we make it easy for viewers to find it, explore, and check things out.”
So far, so good. The widgets, thanks to an alliance with AOL, has been embedded on some 20,000 websites since July, and by this week will have placed on more than 300 million web-pages, Allen said in an interview with TheWrap.
“That’s a significantly bigger number than what we had projected,” he said.
Films featured on the site include well-known and already successful documentaries such as “Paper Clips,” a documentary about the Holocaust, and “Supersize Me,” a cult hit about the fast food industry.
But it also promotes more obscure docs. The site’s homepage [4] now features a documentary about the TED technology conference, “The Future We Will Create: Inside the World of TED,” and “Life is for the Living,” a documentary about the debate over embryonic stem cell research.
The system comes as low-budget documentaries and independent films struggle to find distribution outlets in a landscape of shrinking opportunities. Traditional theatrical exhibition has been overwhelmingly dominated by big studio releases, crowding out independent films that have small marketing budgets and little time to gain a word of mouth following.
If it works, the model could prove useful for many low-budget films, as independent film distributors have been shuttered by major studios are gone bankrupt in the past year.
But “The Secrets of the Pharaohs,” a documentary promoted by AOL, demonstrates the revenue limitations for the model. The advertising rates online -- known as “cpms” -- do not add up to much income for the filmmakers until the number of viewers gets to be in the millions. “Pharaohs” was downloaded 60,000 times in a period of two weeks, said Allen; but at a $20 cpm, that amounted to only $1200 in advertising revenue.
Allen declined to discuss precise revenue amounts, saying that was proprietary information.
As viewers turn increasingly to their computers for entertainment, the web has provided a potential outlet for distribution, but the problem has been how to let viewers know that any given small film exists.
Allen says the rapid acceptance of Snagfilms made him optimistic about the future of movies on the web.
“Do you need another revenue stream?” asked Allen. “Absolutely. Is the revenue stream going to be something that starts out so large that you're going to be able to do distribution? No. Do we believe it's a revenue stream that you can track is growing? Yes.
“And we've seen it dramatically, number of views going up dramatically. It starts with the product being out there.”