Finite Films is a website that co-creates the narrative with the public. Though the films they make are fictional, I believe it is an example not only that co-creation can work, but of the processes used.
Summary
When Finite Films ‘writes’ a film, they don’t begin with an outline, they begin by asking the public for a list of constraints. Afterwards, they pick their favourite 21 constraints and then they are then divided up into scenes and plot devices and then they are voted on by the public (they choose 3) and then the top voted must be included in the film. Sometimes the constraints are scenes, sometimes plot devices, sometimes characters. The 7 most popular are used in the film.
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But plot co-creation isn’t the only way that finite-films has expanded the process of filmmaking to include the public: not only do they log regular production diaries, but the public can vote on what aspect of the production is featured. They produce one short-film a month and one at least one production diary film a week.
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It’s funded by crowdsource. They did an initial campaign on Indiegogo.com, a US crowdsource site and take donations.
(I hope to fill this in a bit more with information from an interview— what they determine successful viewership, their longer term plans.)
What’s important for my research
Useful model of co-authorship
Finite Films represents a successful example (on the basis that they’ve actually made some films and people participate in contributing constraints) of how to involve the audience in authorship.
Finite Films invites constraints but they limit the constraints voted on to ones they think are ‘do able.’ From their FAQ page : “we go through all the submissions each month and choose 21 finalists that are: (A) actually possible to make, (B) the most interesting, and (C) the most diverse.”
Authorship by process is the meaning of authorship in participatory social media.
According to Murray (1997) and Manovich (2002) authorship in the digital age is mostly about establishing processes. Finite Films establishes these processes in a way that doesn’t completely surrender the authorship of the film but does so in a way that includes the public— the same public that are stakeholders in the making of their films— and also provides stability for filmmakers— choosing from manageable constraints.

They give the public a key and very specific set of instruction about how to interact. In that way, as is similar with webdoc.com's findings in the user testing, they give people a narrow and very specific way to express themselves.
Criticism
“Drive”
There is an element of this film work, the filmmakers participating in it, that works with instrinsic motivation: people participate in the making of the film (not the public that submit constraints but the filmmakers, as the actors, and crew get paid) because it’s something they love to do rather than get paid for. It is an open question as to how long these filmmakers will continue organising these films. They aren’t getting paid for it and one wonders whether their time will begin to conflict?
How sustainable is crowd-funding, reliance on donations?
To my knowledge none of these short-films has been picked up by more mainstream media. We know from experience (of indie news orgs like the Global Post, like Not on the Wires (founded on the project The Berlin Project) need mainstream media to survive.
It’s an open question as to whether crowd funding is sustainable for filmmaking like this, whether they will require an effective buy-up from a major media network.