Investors in independent film are constantly looking for quality new projects and complaining about not being able to find them. Even the most talented writers and directors often have trouble funding their projects. How can both be true? The problem is the lack of an efficient introduction system to help the two find each other. Enter Slated.com, our 2013 Big Film Idea of the Year. Although the site launched in 2012, this was the year that it really achieved critical mass. The sword that cut the Gordian knot was the decision to make the site a semi-closed, invitation-only architecture. The result has been a signal-to-noise ratio that is admirable—and a quick rise to prominence for co-founders Stephan Paternot and Duncan Cork.
Paste: Tell me about the beginnings of Slated.com, which we think is a really exciting idea for independent film.
Stephan Paternot: My background is a combination of the internet world—where I’ve been for about 20 years and focused on social networking in the ‘90s—and in the last 10 years I’ve started a film production company and have had a lot of experience as an independent film producer And I met a partner whose background was in marketing and branding who was also interested in solving these problems of film finance. So we teamed up, and our idea was an online marketplace that connects buyers and sellers for film.
Paste: And Duncan, your partner, was actually trying to find some more money for a film at the time, right?
Paternot: Yeah, exactly. Duncan had been involved with a film as an art director, and he became fascinated with their usual process of fundraising for film, which is a very labor-intensive process of running around trying to meet different investors. So that set Duncan off on a mission to figure out film finance. And from my side, I had been doing the exact same thing, but as an actual film producer for about six or seven years, with my own production company based in Los Angeles. I had been looking at how to reinvent film finance as well, and kind of remove all of the opaqueness of trying to get into Hollywood and meet the right investors.
So we basically had a meeting of the minds, and in 2010 started developing the platform and the concept and how it would be built, and we took a couple of years to get it right and launched at Sundance 2012. And the idea was very, very simple. It’s to create an online marketplace that connects—starting with a few filmmakers with dependable investors and grow it from there—essentially create an online community for the film industry and investors and distributors and sales agents and filmmakers. It’s pretty much taken off from there and grown, with a very strong word of mouth.
One of the ideas we took that was pretty unique was that we decided this would not be a completely open platform right away. You would have to actually have some sort of social proof to get in. So we gave the ability for people to send invites. We invited in the first 1000 people in the industry that we’d already known, and we knew quite a few of the right people, because I had been in the film industry for six or seven years at that point. And we then gave invite invitations to those people so they could invite in the people they knew, and we made sure that new people coming in to the site had to be vouched for by two existing members. So this allowed us to control the quality of the membership and let the community really police itself in terms of who they want to have as part of this market.
Paste: That’s actually the next thing I was going to ask you about, because I think that’s really an elegant solution to the problem of schiesters and shameless self-promoters and all kinds of ugly stuff that can emerge when you have a totally open architecture. Did you have any blowback from the beginning about that seeming too closed or elitist?
Paternot: A little bit. I would say very little. We did get some, just because you can never be completely inclusive, and so there’s always somebody who feels they should be in, even though they’re not. But it was easy for us to justify because we simply said look, if you know two people that you’ve worked with who will vouch for you, you’re in. And that’s after connecting all your social networks together, which Slated will then automatically tell you who you know. So if you don’t know anybody, well, usually that means you’re the unknown quantity and you have to find a different way to prove yourself, get to know people to get in.
So this was really meant as a way of controlling quality as we started. As we’ve gotten much bigger, we are slowly loosening up the restrictions a little bit. One step at a time. And the idea there is we want Slated to become a community that can help everyone in the film industry. We always have to be careful to build the right type of tools that let users still filter by quality. So that it’s still relatively easy for you to find high-quality films, high-quality people, high-quality investors, and not suddenly be bombarded with a floodgate of anybody. But we don’t want to be elitist, so the goal is definitely to open it up, but we have to open it up carefully and gradually. So that’s where we’re at right now. We are now in sort of the next phase of growth where we’ve now made it easier for even people who haven’t been vouched for to still leverage the platform but without bombarding everybody in the community.
Paste: And you have some great people involved—Alicia Van Couvering, Neil Dodson. You’ve got some big names in there—Jason Ritter, Alicia Keys, Heather Graham. How much of that growth has come in 2013?
Paternot: We’ve seen some significant growth this year in particular, mostly because there has been a strong word of mouth. So we’ve hit a tipping point where more and more people hear about us. But since we were so careful about who’s coming into the community to begin with, it meant that Slated had about it a sense that it’s very well-established filmmakers and producers, and it made people only want to join even more. They know that that’s where the talent is, and also where a lot of the notable investors are that really write major checks.
We also vet every single film and every single investor that gets accepted into the community, so we do a background check on the investors, we speak with them, we ensure that they are legitimate. With films, we also make sure that they are fully packaged with the right directors, cast, sales agents, et cetera before they’re approved on the site. And there’s a qualitative analysis that’s done as well on the film structure, so they’re viable as films.
We’ve had maybe about 5000 films submitted to get into the site and we’ve approved I think about 300 films. We started off approving about eight to 10 films a month and now we’re getting closer to about 30 films per month. The volume has been increasing significantly, but without losing the quality of an approved Slated film.
And on the investor side, we’ve been getting about 20 to 30 investors or investment entities approved every single month, which represents about 50 to 100 million dollars in new capital represented each month. Now we are over 2 billion dollars represented on the platform. What it really comes down to is that we have a lot of money represented on the platform, about 300-plus films on the platform, and now it’s all about matchmaking and making sure that investors can easily find the film that interests them and that the filmmakers can easily find the right type of investors.
Paste: So what developments do you see in 2014 and beyond that are going to help you reach that next step?
Paternot: Well, we are really looking to maintain quality, but also to keep scalability in mind. The business that we’ve had so far has been quite hands-on, a lot of personal diligence by our pretty savvy team of film-industry people and then built on top of the tech platform that our developers have built. We’re going to be looking for more ways to scale, so that we can let in more easily a big number of filmmakers with quality films.
It’s more about using a lot of the data that we’ve been collecting, especially with our partnership with Baseline’s Studio System. They provide a huge amount of historical data on every single filmmaker and every single producer and distributor on our site. With all of that data, we’re looking to create automated quantitative analysis tools. So I know I’m getting a little bit esoteric here, but the idea is we’re going to be looking to become a little more ubiquitous, a little more accessible to most of the film community but while maintaining really great quality control at the user level.
Another major thing we’re looking at, of course, is removing more and more friction out of the transaction process itself. To build a marketplace, it’s all about having liquidity, and that means enough supply and enough demand at any given point so that there’s always something of interest for each party. We’re primarily an introduction platform right now. The goal is to go from being just an introduction platform to a full beginning-to-end transaction engine. So you could do a full complete transaction, all your research on a film and your final investment in a film all online without having to go and meet people in person and pick up the phone. We want to make it as smooth as possible, so that’s really the long-term goal.
Paste: Any one specific success story that you want to talk about?
Paternot: Technically and legally according to the FCC, we’re not allowed to talk about any film that is in the process of fundraising, but we have had about 40 features now that have completed funding out of the first 300, so every month, another half dozen features or more complete their funding. Obviously there’s a number of really great films that are in the process of closing funding, but there’s one I can tell you about that has been publicly announced. We had one great film last year that got into the major markets called Roman Polanski: Odd Man Out, the follow-up documentary to Roman Polanski: Wanted and Desired by Marina Zenovich. She’s the Emmy-winning director of the first part, and then she did the second part of the documentary, Polanski was rearrested in Switzerland, and that film found its funding in under a week on Slated. Introductions happened within a week, although then doing the offline paperwork was still a process. But that film nevertheless completed funding, finished its production, got into the Toronto Film Festival, went to the New York Film Festival, got bought by Showtime, and had its premiere last September. So all in the span of less than a year, it went from funding to festival to distribution.
And I’d say that the vast majority of films that have completed funding on our site are of a notable caliber. They all got to major festivals and most of them have gotten picked up by distributors, so we have a very high conversion rate based on the fact that we curate quality.
There’s another film called Days and Nights, which stars Katie Holmes, Jean Reno, William Hurt, Allison Janney—it has just an all-star cast. And it found its funding as well within a few weeks on Slated, went to production and completed production last year, had its premiere, and now it’s at Palm Springs International Film Festival and hopefully will be getting picked up by a distributor in the next few months.
Paste: This ain’t your father’s Kickstarter.
Paternot: Typically films on our site are of a different caliber than films that get crowd-funded. We’re a pure equity-financing platform. Most of the films that come to Slated have raised up to 10 percent of their budget via crowd funding and now they’re looking for the other 90 percent. And also to get in front of sales agents and distributors and festival programmers. So a lot of crowd funding has occurred first, and then often a lot of those films go on to Slated and raise the rest of their equity and get their market made on Slated.
So typically the films that are made on our site are bigger in budget. They are between $1 million and $5 million in budget, which is typically bigger than your $10,000 to $100,000 crowdfunding films.