Fortune - Former AOL executive Ted Leonsis was frustrated: He'd produced a critically acclaimed documentary called Nanking, a film that looked at some Westerners who had protected Chinese civilians during a brutal, six-week attack by the Japanese army in 1937. But he was pretty sure the film, which premiered in 2007 at the Sundance Film Festival, would reach a relatively small audience.

Only a few hundred movie theaters in the U.S. will even show documentaries, and even those cinemas don't always give non-fiction films prime spots on their schedules. Distribution is a source of aggravation for many documentarians.

Unlike most filmmakers, though, Leonsis, who stepped down from day-to-day management at AOL at the end of 2006, had the wherewithal to do something about the situation. Last year he launched SnagFilms, a company that aims to distribute documentary films via the Internet. But rather than just stream its library of 650 titles through the SnagFilms site, the company is enabling portals, news sites and individual fans to share the movies through their own Web sites, blogs, Facebook home pages and other sites MORE...