Over the past decade, crowdfunding has gained an increasing presence throughout the community of content creators and entrepreneurs. In 2008, Indiegogo launched a crowdfunding platform at the Sundance Film Festival and has evolved as one of the leading players in funding independent film. Kickstarter quickly followed in Indiegogo's footsteps in 2009 and has established a front row position for many successful film projects, which currently account for $60 million of the over $200 million pledged through its art-based crowdfunding site.
It is no surprise that no less than 17 of the films selected for the 2012 Tribeca Film Festival utilized fan-based funding to fulfill a portion of their project's budgets. Crowdfunding not only enables filmmakers to maintain creative control but also empowers fans to stay involved in the filmmaking process through donation-based incentives including, but not limited to, private advance screenings in intimate settings, closing credit recognition, filmmaker meet-and-greets and sometimes prominent producer credits for substantial contributions.
For as little as $1, First Winter Kickstarter campaign backers received invitations to an advance private screening prior to the Tribeca Film Festival World Premiere at the beautiful, upstate New York farmhouse where the film was shot and the entire cast and crew staying during the filming. For only $35, Graceland identified its Kickstarter campaign backers by name in a special thank you section in the film's closing credits. Those who donated $250 to the Town of Runners Indiegogo campaign were entitled to a Q & A Skype session with the director, in addition to other film-related merchandise. Moreover, First Winter made 16 backers who contributed $1,000 to its Kickstarter campaign associate producers. Although High Tech, Low Life offered co-producer credit to backers willing to pledge $5,000, no fans pledged enough money to become a producer. Therefore, developing and pricing incentives appropriately directly correlates with the success of an independent film's crowdfunding campaign.
Without production funds obtained through crowdfunding, feature films such as First Winter, Graceland, High Tech, Low Life and Town of Runners may have never been created. Other films like Future Weather, The Playroom and Rubberneck ran crowdfunding campaigns in conjunction with the Tribeca Film Festival in order to transition from world premieres to more widespread distribution. Filmmakers should not only be strategic regarding when to launch a campaign, but they should also carefully consider fundraising goals to determine which crowdfunding site is best for the particular project at hand. Kickstarter's all-or-nothing approach returns pledges to backers when campaigns fall short of their goal. Conversely, Indiegogo applies a sliding scale (9 percent in fees for partially-funded projects versus 4 percent for fully-funded projects). Accordingly, regardless of whether The Playroom meets the $8,000 goal it set on Indiegogo by May 2nd, the filmmakers can guarantee that they will bring home the funds raised at the end of its campaign. On the other hand, Future Weather and Rubberneck must raise $40,000 by May 9th and $10,000 by May 8th on Kickstarter respectfully to see any of the backers' money and for their backers to receive exclusive donation-related perks.
The results of the Tribeca Film Festival crowdfunding campaigns serve as an excellent case study for future filmmakers pursuing similar projects. Filmmakers now recognize that setting realistic goals and desirable incentives through crowdfunding campaigns can make filmmakers' and fans' dreams a reality. In this new era, crowdfunding replaces large investors, known to exercise control and demand a share of the profits, with real people, their modest contributions and their newfound personal involvement in independent films, previously inaccessible to them. Although, Kickstarter and Indiegogo represent donation-based crowdfunding sites, investment-based crowdfunding sites provide additional opportunities for content creators and entrepreneurs since President Obama signed the JOBS (Jumpstart Our Business Startups) Act into law earlier this month. The JOBS Act promotes crowdfunding platforms by allowing small businesses such as independent film productions to accept investments of up to $10,000 without registering or filing with the Securities and Exchange Commission. As the 2012 Tribeca Film Festival closed with several successful fan-funded films, we can only expect to see an increase of crowdfunded films at next year's festival, and now that the JOBS Act permits easy investments through crowdfunding, we may also see investments gradually replace donation-based incentives in the coming years.
The author wishes to thank Lindsay E. Donn for her assistance in preparing this blog.
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