SnagFilms, founded in 2008 by Ted Leonsis, has raised its first major outside capital: a $10 million round led by New Enterprise Associates and *Comcast* Interactive Capital. Known until now for its documentaries, SnagFilms will use some of the funds to expand to fiction, to distribute its library across more devices and platforms, and to expand indieWIRE.
NEA and Leonsis share another investment on a much grander scale: Groupon. NEA general partner Peter Barris and Leonsis serve together on Groupon’s board; Barris is joining the SnagFilms board with this investment. SnagFilms also has a connection with Comcast’s cable operation, which, along with Verizon FiOS, launched its VOD channel last year. The startup’s existing investors, including Leonsis, who was vice chairman of AOL (NYSE: AOL), and fellow AOL alum Steve Case, also joined in the round.
SnagFilms CEO Rick Allen told paidContent the company is “modestly profitable.” It has more than 2,000 non-fiction titles distributed through an ad-supported streaming, pay-per-view through Comcast (NSDQ: CMCSA) and FiOS, and rentals via iTunes and YouTube (NSDQ: GOOG). It’s also featured in the Starbucks (NSDQ: SBUX) Digital Network. Allen describes SDN as a “great point of visibility” but said they’re still exploring which films work best in the in-store environment. In coming months, he said SnagFilms will bring some titles to SDN in the first window. As for Youtube, SnagFilms seems to be caught in the warp as other distributors who have prime real estate on a major platform that isn’t delivering transactions on a large scale. Allen’s tactful take: “The relationship is in the early stages where we think there’s a lot of potential.”
The company just launched an iPad app and plans to roll out across digital platforms but that takes money. Allen estimates it costs in the six figures and sometime higher to develop distribution for a new platform or device.
What he won’t be spending on are all-rights acquisitions. “That’s not what we really want to do. There are folks who do that very well.” The initial emphasis on documentaries came from Leonsis’ passionate interest in making them himself and a desire to make working in the genre possible — and profitable for others. Now they want to expand that focus to fiction.indie films reach a full audience.
As part of the effort, SnagFilms is bringing on Bingham Ray as an advisor. Ray is a former president of United Artists, October Films and Kimmel Entertainment.