Inside D.C. entertainment

Correction:

SnagFilms does not explicitly offer its clients the option of donating their earnings to charity.

Ted Leonsis' SnagFilms aims to make 'filmanthropy' profitable

March 18, 2011 - 08:26 AM
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rick allen snagfilms
Filmanthropist Rick Allen, the CEO of SnagFilms. (Photo: TBD Staff)

Marcy Garriott, a former telecommunications executive, did not get into documentary filmmaking for the money. No one does. Even directors as famous and accomplished as Errol Morris depend on other work, like making commercials, for income. Instead, Garriott and most of her peers make docs for the love of the art and, perhaps more importantly, to make a difference. Of course, the latter isn't possible if no one sees her films. In the pre-Internet age, docs such as The Least of These (2009), which she produced, would have traveled the festival circuit, held a few screenings, and then hoped for enough press to warrant a release on home video. Today, though, Garriott's options are myriad. The traditional routes remain, but now there's iTunes, Video on Demand (VoD), and online streaming.

The possibilities that latter option presents cannot be exaggerated. The Least of These opened at SXSW in 2009, but Garriott opted to release it simultaneously on SnagFilms, a locally based website that streams docs for free. The site was relatively new at the time, having been launched less than a year earlier by Ted Leonsis, who owns the Capitals and Wizards, and Rick Allen, formerly the president and CEO of Sporting News. (Steve Case, the former chairman of AOL Time Warner, is also a principal investor.)

It didn't take long for the film to make an impact. The Least of These is an investigation into Texas' deplorable T. Don Hutto Residential Center, a former medium-security prison converted into a family detention center for undocumented immigrants, and her film became an integral part of the groundswell of support to close — or at least reform — the center. Organizations such as the Center for American Progress and the ACLU held screenings in D.C. and elsewhere, and the SnagFilms link to Garriott's doc was shared among those working on the issue, including politicians.

Such a link eventually appeared in a New York Times story about the Obama administration's decision, later in 2009, to stop sending families to T. Don Hutto. Thing is, the Times had never interviewed Garriott; the link had found its own way to the reporter — that's how effectively word of The Least of These had spread. While Garriott credits activists and organizations with pressuring the government for changes at the detention center, she doesn't doubt that her film played a role.

"The film was absolutely there along with them," she says. "They're the ones who brought about this victory, but the film was a very helpful tool and adjunct to that campaign, and SnagFilms was helpful in getting it out."

This is precisely what Leonsis and Allen had in mind when they founded SnagFilms with the notion of promoting what Leonsis calls "filmanthropy."

Leonsis explained filmanthropy to the Post in 2007: "It's where you can shed light on a big issue. You raise the money around your charity and make something that can drive people to understand an issue. It brings together philanthropy and understanding how media works." At the time, Leonsis had just screened Nanking, a documentary he produced about the rape and murder of tens of thousands of Chinese citizens in 1937-8, at the Sundance Film Festival. With Allen, he would make his second foray into filmanthropy by producing Kicking It, a doc that follows six players preparing for the 2006 Homeless World Cup in South Africa.

The thought, originally, was to continue producing such films, but the two men came up with an even better idea: to find a way to bring together documentaries, like theirs, that highlight a particular issue neglected by mainstream filmmakers. "There's a lot of great content, and the need is on the distribution side," explained Allen, who spoke with me recently in SnagFilms' offices near Dupont Circle. Though Internet providers were unveiling ever-faster service, there was still widespread doubt that users were willing to watch long clips; few companies were entering that online space with confidence. (Netflix' online streaming, for instance, was still in its infancy.) "Nobody was stepping up to it," Allen said, "and we believed whats' proven to be the case — which was, if the experience is enthralling enough, people will watch."

SnagFilms focused on documentaries, Allen explained, because "Ted Leonsis and I had our backgrounds in that part of the business, and because we thought that the dysfunction that pervaded the distribution world was even more manifest for documentarians, and so we thought the need was greatest there." But that was only half of SnagFilms' business. A month after its founding, it had bought the established independent-film site indieWIRE — an acquisition that, Allen said, was part of the original plan: "We always conceived of the properties in harmony."

Both sites have grown substantially since then. indieWIRE has seen its traffic increase 12-fold, partly due to an expanding blog network that includes notables like Leonard Maltin, Peter Bogdanovich, and Eric Kohn; it receives 2.5 million page views per month. Meanwhile, SnagFilms' library now contains 2,000 films, a number it hopes to double this year with the addition of fiction films this summer; it registers about a million streams per month. (SnagFilm's video player allows embedding, thus encouraging the films' dispersal online.) But the sites are, with the exception of SnagFilms' VoD and iTunes offerings, entirely ad-based, and as we know, it's not easy making money with that business model.

While both sites are in the black — SnagFilms' site became profitable in the final quarter of 2010 — they're not making a fortune. "In both instances, I don't want to be disingenuous, the profit levels are modest," Allen said, "and in both instances we've chosen to substantially increase our investment, especially on the SnagFilms side." He was referring to the January announcement of a $10 million investment from Comcast Interactive Capital and New Enterprise Associates, a venture capital firm based in D.C. In paperwork filed with the SEC as a result of that deal, the entire SnagFilms company reported revenue in the $1,000,001 – $5,000,000 range. (The company is privately held, and Allen declined to disclose its earnings.)

But to make any money at all on the streaming of, and writing about, independent films — most of which are obscure even to a film reporter like me — is a feat in itself. Plus, Leonsis has much more significant sources of revenue. He can afford to let SnagFilms survive on modest profits, and to give the company whatever time it needs to grow. Meanwhile, he's using the company to further his already robust goodwill in the D.C. area: Last week, SnagFilms announced a contest that will award online distribution to one narrative film and one doc made by District filmmakers.

SnagFilms offers filmmakers a 50/50 split of ad revenue, which, at least for now, isn't nearly enough to recoup production costs. (That some filmmakers choose to donate their earnings to a philanthropic cause suggests that the revenue isn't substantial.) But it does provide a platform whose visibility can lead to more reliable sources of revenue, like DVD sales or TV broadcast deals. As Garriott says, "I don't think that most people would want to have SnagFilms as their only distribution outlet, but they can play an extremely valuable role in a distribution strategy."

So although SnagFilms might not be the future, it's well-positioned to be a part of it — to somehow find profit, both for itself and its clients, in the distribution of micro-budget films. But maybe that's missing the point. Maybe the company is itself the embodiment of filmanthropy: not extremely profitable, but a priceless tool for filmmakers. "It's a way to start a conversation across the country about a film," Garriott says. "It really is a very strong outreach tool, and it establishes the credibility of the film — that we're here to do so some good."

The Least of These

Nanking

Kicking It

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