There’s no doubt the current buzz within the
independent film industry is with crowd funding. Indie film had been struggling to
generate funding long before the credit crunch, and virtually dried to a halt with
the 2008 credit crisis – private investment became impossible to get hold of
and public financing schemes collapsed (the UK film council is a perfect
example of this). With
global funding drying up, alternative methods of funding began to be explored
with crowd funding coming to fore in 2009 with the launch of Kickstarter. Fast
forward to 2013 and independent films have received over $100 million through
Kickstarter alone (almost $58 Million in just 2012), not to mention what the
other crowd funding platforms have raised. All this for the lose of 0% equity
in the filmmakers project, its clear to see why crowd funding is an attractive
funding route for filmmakers to explore and here to stay for a long time to
come.
Continued exponential growth?
A lot of people don’t realize crowd funding is very competitive marketplace. For your film project to succeed at any level a good campaign at the very least has to be well run and it has to have something that makes it stand out. In the early days of Kickstarter, there were a few projects that were pretty ordinary but managed to get funding because the platform was unique. That’s not the case now. Though I do foresee that the number of films made through crowd funding will continue to grow as long as the number of new backers continues to grow. In 2011 Kickstarter recieved its 1 millionth new backer in total and in 2012, 2,251,475 backers for that yeah alone. This number will inevitably continue to rise for some time to come with new people discover crowd funding, Kickstarter opening its platform in new territories and new competitive platforms coming to market, in doing so continuing to push the number of films up with it.
With the rise in successfully projects, if anyone thinks there is likely to be hundreds of films raising hundreds of thousands of dollars every year, think again. Since Kickstarter began, only 79 (less than 1% of all successful film projects) films have raised in excess of £100K and as I mentioned in my last blog – the top 5 most common crowd funding mistakes - over half the successful campaigns on Kickstarter have raised between $1,000 to $9,999. This suggests a campaign better have something pretty special if its targeting a big budget from traditional crowd funding.
That said, I’d be surprised if in the next 12 months we don’t see the first $1million film on Kickstarter or Indiegogo, though I don’t think this will ever become the norm. Its more likely the big budgets through crowd funding will come through independent platforms much like Iron Sky. Or alternatively through equity crowd funding, which is likely to become a big deal in the US over the next couple of years with Obama signing the JOBS (Jumpstart Our Business Startups) Act designed to open up equity crowd funding to the general public. It’s a possibility that mainstream films, may even begin to seek investment through equity crowd funding, as Hollywood studio money dries up over the coming years (read The Economist article on why this may be this case with film profits dwindling). I also see mainstream film using traditional crowd funding platforms like Kickstarter & Indiegogo to raise a small portion of budgets and a more importantly an audience, again much like the way Iron Sky did.
The proportion of where the money came from to make the Iron Sky budget
Crowd... with a bit of funding
This for me, is where it gets really interesting. More important than the money, a successful campaign brings the crowd and this is what will help the continued success of indie film. These loyal and vocal supporters can do the largest possible good for the least amount of money. Indie films have always struggled to generate an audience, but image having 1,000 supporters of your film even before its been shot, let alone distributed. Not only that, these supporters have put their hard earned money into the idea of the film, so of course they are going to what it succeed – after all they feel part of it, not because of financial gain but because they feel a sense of ownership for the project and want to see it succeed.
One of the big annoyances I see in some crowd funding campaigns, is setting rewards too high. It alienates your potential backers, why not set a lot of your entry rewards low and get hundreds if not thousands of backers on board, they will be more important than that one backer who put in $1K when it comes to getting the film out there to as wide an audience as possible. These people will be the cheerleaders for the film (as long as they are engaged with), they will shout from the rooftops telling their friends and family about the film they backed. That’s better than what traditionally happens with an indie film, when it comes to distribution and it’s just the Director, Producer, writer and maybe a marketing/press person trying to push the film. In addition, sales agents, distributors and a like, cannot ignore this level of support through essentially pre-sales, when it comes to getting your film out there.
The Cosmonaut is in the process of doing this right now in their build up to premiere on May 14th 2013. They are using their 5,000 plus backers to be the promoters of their film to find it an audience. If you’re interested in their plan, read more about it by downloading their PDF and have a look at their project video below.
Alternative methods
Larger films will begin to explore raising a small portion of their funding through crowd funding just to create an audience. This could be to prove the concept has an audience to secure further funding, much like the controversial “The Goon“ movie, by securing $441,900 of a huge $35million film. Or to pay for a specific part of the film, like completion or distribution in the same way “Borrowed Time” has done to get the film to a cinema near you securing £21,721 in pledges and potentially more importantly 360 backers of a micro budget feature. Both certainly have a place, if you get the backing before going into production – great you have months to nurture and grow that support. If the funding campaign is to get the film distributed, you can galvanize your supporters straight after the campaign when they are most excited about it – in this scenario I personally think releasing the film as quickly after the campaign as possible has the greatest potential to make it a success. Amongst other things these backers can push a film from online release into cinemas by getting those around them to demand a screening, or once its released digitally lead to it going viral by pushing it out to all their friends and family to rent/buy/donate etc.
An interesting campaign worth watching closely is ‘We are monsters’ they hit their target of £5K within the first 24 hours of the campaign going live, but that’s only part of the story. The campaign is a reboot of an earlier campaign that fell well below its £100K target. They need an estimated £3million to make the film, so I would image they’re using the Kickstarter campaign to prove to investors there is a fan base for this film and use the Kickstarter investment to secure further investment.
Turning £5K into £3million sounds a little like turning water into wine. However if they can continue to secure new pledges on Kickstarter and get somewhere around 1,000 backers they are in a very powerful position to prove there is an appetite for their film to sell and distribute well. Though a lot of film campaigns in particular tend to flat line once their target is reached, it will be intriguing to see if they can continue to generate interest in their stretch goals and find new supporters. Then once the campaign is over, how successful they are in getting the finished film made – after all their current funds are nowhere near enough to make the film. One way or another it will make an interesting case study.
Bold Future
There is no doubt in my mind the current model of indie film sales and distribution is broken, it’s unsustainable and needs a major shake up. Indie film cannot compete with Hollywoods mainstream methods; it needs to think outside the box to reach an audience. Crowd funding offers a potential solution. In the near future I foresee a lot more Indie films being part financed through crowd funding, still in the levels of $1K-$10K. Though the major reason will not be to get funding but an audience of early advocates to support a film. I can imagine campaigns treating crowd funding purely as presales on the film. I’d like to see a project with a low target (around $5-10K) set the HD download of their film at around the $1 mark and see what happens – imagine 10,000 loyal supporters promoting a film before anything is shot and what they could do. That could be an extremely powerful weapon in pushing a tiny indie film to compete with big Hollywood marketing methods, and at no additional cost beyond user engagement.
All opinions are my own and based on research and continued development for my own successful Kickstarter campaign 'The Fitzroy'. If you're interested in discussing any of the points raised in this blog, please feel free to get in touch with me.