As promised, a summary of the short talk I gave at the marvellous Galway Film Fleadh on Friday July 13th
Ouya, an Android-powered, open-source games console, has used the internet based crowd-funding platform Kickstarter to raise an eye watering $4.8m against a target of $950k in less than a week. Other stories, especially around Kickstarter, are popping up all over the place.
It’s an alluring model for financing movies – if you can finance the film from the crowd you get to own the negative and you get to make the film you want to make without financier ‘notes’. But is it really that easy, can you just post your project on Kickstarter and watch the money roll in? Of course not. But while researching the subject I came across a few tips and case studies that I found interesting and I watched some really fresh and interesting movies too.
I followed her campaign with interest and at first sight it could be said to have been a disappointment, raising only $8,878 out of a target of $41,000 but, as we shall see, her story did have a happy ending.
There are two basic crowd-funding models: the ‘all-or-nothing’ or ‘keep-it-all’ models.
In the all-or-nothing scenario you set a financial target and specify the amount of time your campaign will last. If you hit your target within your timeframe then your funders’ credit cards are charged and you get the money. If you don’t hit the target you don’t get anything and funders don’t get charged.
In the keep-it-all model you get to keep the money raised whether you hit the target or not, funders’ credit cards are charged at the point of pledging.
The fees for each are pretty similar – 4% to 5% of the money raised goes to the platform, plus 3% to 4% credit card processing fees. For the ‘Keep-It-All’ model you get charged an extra 4% fee if you don’t hit your target. This apparently is to encourage you to set realistic targets for your projects.
On Kickstarter Film and Video has been the dominant category accounting for some $75m of the $275m pledged to date. (I suspect these numbers are changing fast and that Games are catching up quickly). Nevertheless the numbers for individual films are not huge. The average donation on Kickstarter is about $75, the median donation around $25.
The most funded film on the platform is called Blue Like Jazz. In common with many of the film projects on Kickstarter it has some crucial characteristics:
- it is a feature documentary
- it speaks to a very engaged and motivated audience, in this case fans of the eponymous book on which it is based and Christians .. the log-line for film and book is ‘Non-religious thoughts on Christian Spirituality’
- there is a ‘this belongs to us’ (‘us’ being ‘the crowd’) feel to the campaign to get the movie funded. The Kickstarter campaign plays on the last minute failure of the film to get financed through conventional means as a motivator for people to donate, even calling the campaign ‘Save Blue Like Jazz The Movie’
Indie Game – The Movie – a brilliant, feature-documentary about the indie game scene tracking three indie games creators as they battle time and their own obsessive-compulsive perfectionism to get their games to market.
The directors did two Kickstarter campaigns to get funds for their film – one at the beginning to get the film off the ground ($23,000) and one towards the end of the project to get it finished and to raise funds for marketing and distribution ($71,000). Here's the movie trailer.
The distribution model for the film is also very interesting. Festivals and other theatrical screenings are part of the plan but at the moment the main effort seems to be going into digital distribution though iTunes, Steam and DRM free through the movie website.
The big win may well be the spin-off opportunity that the documentary has generated though – Producer Scott Rudin picking up the idea to create a comedy series for HBO.
One more example before trying to figure out where crowd funding is heading.
The Age of Stupid was an early example of a crowd-funded film and was made before crowd-funding became fashionable.
The producers raised an impressive £450,000 to produce an environmental polemic, set in 2055, where Pete Postlethwaite looks back at the time between 2010 and 2015 as the era in which, had we taken action, we could have spared the planet the environmental disaster that later destroyed almost everything.
On the Age of Stupid website is a very useful guide to crowd funding your movie including legal documentation that you can download and adapt for your own campaign if you are thinking of doing it without a Kickstarter or RocketHub.
The story of the funding process for Age of Stupid also contains a cautionary tale. They were very close to launching their fundraising campaign but thought they’d just check in with their lawyer who advised them that, brilliant though their scheme was, it was also totally illegal as they were offering financial products to the public but without going through the necessary regulatory frameworks. Hence one of their pieces of advice, hire a good lawyer.
Uniquely among the films mentioned here Age of Stupid offered a profit share to its larger funders. They did underestimate the amount of work involved in paying that profit share out every year – they had 250+ profit sharing donors in the end, that’s a lot of royalty statements to calculate and cheques to write.
So, reading the material and talking to people who have crowd funded their films, there are some definite trends, tips and tricks to think about if you are going to go down the crowd-funding route.
- under-promise and over-deliver: everyone advises setting a realistic funding target. It needs to look like a target that will deliver tangible results, so maybe part of the film rather than the whole thing, but it’s a much better story if you can overshoot a modest target rather than under-perform against an over ambitious one.
- The sales video for your campaign is crucial. Make it personal and speak directly to your audience. If your trailer is too slick or too much like a short film then people will be asking themselves why you need the money and if you do not appear in your sales film people will not know who they are investing in and whether they can trust you.
- The projects that succeed are the ones that engage a motivated community. Christians, gamers and environmentalists are the communities that the films above tapped into. My friend Sara makes lovely films but they appeal to a general audience that is not motivated to fund her activities to the extent that she hoped. However Sara though did raise enough money to develop her film sufficiently to get other producers and funders interested and it now seems very likely that Final Call will get made as a co-production with a Polish Studio and her crowd funded script and animatic are what created that opportunity for her.
- In the funding cycle the most donations will come at the beginning and end of your chosen funding timeframe. In the middle, activity will be flat. This is when you need to work hardest and communicate most with ‘the crowd’. Communication is key at all times but most of all when people’s motivation to donate is at its lowest ebb.
- The rewards that you offer to funders are crucial and you need to think about them carefully. Both the value of them and the practicality of delivering them. According to Kickstarter, campaigns that do not have low value rewards ($20 or less) are 20% less likely to reach their targets than campaigns that do. Study the reward offerings of successful and comparable projects and learn from them.
- Remember to factor in the cost of buying or creating your rewards and the cost of delivering them to your funders. Some Kickstarters recommend allowing 10% to 20% of the funds that you raise for rewards.
One of the really interesting questions that got asked after I shut up was whether I thought this was a fad. Stories abound of people’s Facebook timelines being bombarded with crowd-funding requests. This will piss people off very quickly. Also, sooner or later there will be a fraudulent scheme that will cause a scandal and damage the movement.
But I think it will settle down and persist. It won’t always be as hot as it is now as more and more commercial rather than personal projects seek to fund themselves in this way.
The freshness, the honesty and the passion evident in films like ’Indie Game’ and ‘Stupid’ bear out the advantages of the true independence that crowd-funding and direct to consumer digital distribution give to filmmakers and for that reason I think the funding model will survive, even if not at the level that it will probably reach over the next year or so. We shall see.