IFilm has attracted a few more online film fans, securing $35 million in financing from heavyweights Sony Pictures Entertainment, Eastman Kodak, Liberty Digital, Shamrock Capital Advisors and Paul Allen’s Vulcan Ventures.
The investment provides a much needed security blanket for the future of the San Francisco-based company, which, until recently, has focused much of its attention on building its Web site instead of its profits.
IFilm, which broadcasts short and full-length feature films online for free and operates a series of tracking and message boards, among other services, through spinoff IFilmpro.com for the professional filmmaking community, generates little revenue outside of its online ads. It does not own rights to its pics nor does it license them as its more commercial competitor AtomFilms does. It has no plans to start doing so anytime soon.
IFilm said it will use the funding primarily to expand its presence in Los Angeles, hiring a slew of new staffers in the coming year to schmooze with Hollywood decision-makers.
IFilm already operates an office in L.A. and plans to boost its 20-person staff in the next year. A staff of 30 works out of the home office in San Francisco.
Plans to upgrade its site to offer more content to high-speed Internet users and relaunch sections of IFilmpro, including its “buzz” section to focus less on gossip and more on business deals, reviews and other focused discussions, are also set for the next two weeks. It also plans to incorporate its recent acquisition of directory service Lone Eagle Publishing as an online database.
IFilm’s execs also plan to focus on new revenue streams, such as its partnership with Spike and Mike’s Festival of Animation to sell merchandise (T-shirts, videos) and pay-per-view downloads of pics.
“You have to build value before charging,” said Skip Paul, co-chairman and CEO of IFilm, of its focus to date. “We knew we had to build a community before making money. The core of IFilm’s mission is to provide tools, access and opportunity to filmmakers and would-be filmmakers worldwide. We’re honored that these globally recognized media brands and technology pioneers support our vision and will be working with IFilm to execute our strategy for both the consumer and the professional community.”
The investment round marks the largest by major entertainment players into an existing Netcaster. Soon to bow POP.com, from DreamWorks and Imagine Entertainment, secured $50 million from Vulcan Ventures last year.
And the result can only help boost IFilm’s presence. Sony has a stake in digital video recorder maker TiVo, which potentially could lead to an IFilm channel on the service, not to mention Sony’s other consumer electronics appliances.
“This is our dream team of investors,” said Kevin Wendle, IFilm’s co-chairman and CNET co-founder, who also upped his stake in the company. “The company’s rapid progress has exceeded expectations, and this speaks to the speed with which the broadband entertainment and business-to-business marketplaces are evolving online.”
The investment also signals a growing interest in digital and Web filmmaking for a traditionally conservative Kodak.
“IFilm’s strategy is consistent with ours,” said Joerg Agin, prexy of Kodak’s Entertainment Imaging division. “Providing technology that enables our customers to participate in the production of high quality broadband content is a high priority for Kodak.
“The Internet is an emerging and additional venue for the next generation of filmmakers to display its creative efforts. Our investment in IFilm will enable us to reach those filmmakers in different ways and add new value to Kodak offerings.”
Vulcan’s interest doesn’t come asmuch of a surprise. The company holds stakes in Web plays Drugstore.com, eGreetings, Go2Net and Priceline.com, as well as TiVo and close rival Replay Networks.
Sony’s portfolio includes stakes in music sites AudioBase, Digital On-Demand, Intertainer, Launch Media, Listen.com, OnRadio, Platform.net, Spinner.com, TalkCity and Spanish-language Web site Yupi.com.
IFilm chief financial officer Charlie Ryan, a former Goldman Sachs veep, managed and executed the financing in conjunction with Paul and Wendle.