Fandor Launches Indie Movie Rentals—Sundance Meets Netflix

4/6/11Follow @xconomy

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real live people, and not an algorithm. “One of the issues with indie and international films is that you can’t just use an algorithm to make recommendations,” Reinhardt says. “It doesn’t fly. There is this editorial curation needed.” He believes that algorithm-based recommendations from companies like Amazon or Netflix fall flat because they are too closely tied to genre—consumers who like one big box action movie will surely like another. But whether a person likes one indie or international film or another is rarely tied strictly to genre.

Fandor relies on a number of different people to help them find out about great new films, and commissions film buffs to write about movies in their collection for its blog, Keyframe. The idea is that you don’t have to be an indie freak to enjoy Fandor—the service will help guide you through different genres and recommend movies you might want to see, based in part on what you’ve already seen. The company has also been creative when it comes to defining film, like “dysfunctional families” and “seafaring and swashbucklers.”

“By and large, the experience we’re trying to recreate in the Fandor service is the experience you get in a good record store or a good movie store,” Marlow says.

Social media is a part of it too—Fandor wants you to be able to chat with your friends and recommend films for each other. Users can even log into the site from Facebook. “We believe the social circles will help bring that great stuff to life,” Reinhardt says.

To that end, Fandor has partnered with BlipSnips, a service that lets its users take 60-second clips from films and post them onto Facebook. Others can check out the clip and then click on the link to watch the whole movie for free, to see what the service is like. “You can have a dialogue about specific parts of the movie,” Reinhardt says. “It’s not about trailers anymore. It’s about this emotional connection to this very real scene.”

All that sharing is great for promoting the site, but it also benefits the filmmakers. Half of the total revenue that comes in goes into a communal pool for the filmmakers, which is then parceled out based on the number of clips shared, the percentage of the movie that is watched, and the percentage of Fandor viewers that watch it. It’s a particularly good deal for makers of short films, who rarely have a way to distribute them, other than bundling them together on a disc. “Because it’s subscription, we boil it right down to every minute someone is watching something, the filmmakers and the producers and distributors get paid,” Marlow says.

So far, Aronson has funded the whole operation himself. With all the buzz over Fandor at South by Southwest, there’s “a lot of interest,” Reinhardt says, but the company isn’t sharing subscriber numbers yet or talking about outside investors. The day-to-day team is still pretty small—about ten employees—and the company has managed to keep costs down by staying lean. A big part of that has been relying on outside technology and “not trying to reinvent the wheel,” Marlow says. “Some of our competitors have decided that they wanted to corner the market for social in the film space, and for Fandor I always believed that Facebook was the Facebook for film. I’m not trying to recreate social networking.”

It may seem like Netflix and other movie services are Fandor’s obvious competitors, but Marlow says the bigger competition comes from the “monopoly cable companies. Folks are spending far too much of their income [on] those companies and it’s difficult to make the case that a supplemental service like Fandor is something they can add on top of that,” he says.

To Marlow, the real challenge for the company will be getting to subscribers outside of the obvious markets—big cities like New York, San Francisco or Seattle. People in smaller cities like Dubuque, IA, or Baton Rouge, LA, generally don’t have the same access to film festivals. “That’s where the opportunity really lies for us,” he says.

And though it’s an inevitable comparison, Reinhardt and Marlow actually take umbrage at the “indie Netflix” moniker, which Reinhardt calls “the prototypical Hollywood pitch.”

“I don’t necessarily find a lot of parallels between the two companies, except for the basic model of subscription,” Marlow says.

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