The Democratization of Film Financing: a comparative analysis of crowdfunding sites and projects for independent movies

Miguel Afonso Caetano and Gustavo Cardoso miguel.a.caetano@gmail.com / gustavo.cardoso@iscte.pt Instituto Universitário de Lisboa (ISCTE-IUL), Centro de Investigação e Estudos de Sociologia (CIES-IUL), Lisboa, Portugal

Crowdfunding

Crowdfunding: definitions

"...the process of one party financing a project by requesting and receiving small contributions from many parties in exchange for a form of value to those parties" (Rubinton 2011). “...involves an open call, mostly through the Internet, for the provision of financial resources either in form of donation or in exchange for some form of reward and/or voting rights" (Belleflamme et al. 2011, p. 7).

First used in 2006 to describe the business model behind the Dutch start-up Sellaband where people contribute with small amounts of money to music artists and bands to help them record an album. .

Crowdsourcing: Why The Power of The Crowd is Driving The Future of Business .Crowdsourcing In June 2006. The article would eventually originate a book published in 2008. Jeff Howe wrote an article for Wired magazine called “The Rise of Crowdsourcing” where he introduced the neologism as being a more democratic version of outsourcing. .

User-led innovation .

Consumer co-creation .

Web 2.0 .

Commons-based peer production .

Barack Obama's campaign .

pre-ordering of products and voting rights. Main motivation: the "ideology or the desire to support a particular project out of pure conviction" (Metzler 2011). DVDs. and books).Crowdfunding: why do people contribute? Artistic patronage. In the expectation of receiving non-monetary rewards (CDs. Financial return is a secondary concern.     . sponsorship.

not investment or lending for profit maximization. Microlending sites like Kiva.   .Crowdfunding: a new kind of patronage  Collective financing. Project creators offer unique products and experiences.org and Prosper fit better within the finance sector because they charge lenders interest rates.

Film financing: the next frontier for crowdfunding .

Crowdfunding everywhere and anywhere .

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Portuguese crowdfunding sites PPL.com .pt RedeBiz.com.net MassiveMov.

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Kickstarter .

Only US residents are allowed to create a project.262. . $60 million collected by successful projects. $9 million not collected by unsuccessful projects. this restriction doesn't apply when it comes to making pledges to projects. Collection rate: 80%. $75.  Launched on April 28.   5% commission on successful projects.447 million in“pledges”. 2009. However.

March 2011) .Number of days it took for $5 million to be pledged Dollars Pledged by Month (April 2009 .

620 projects submitted      10.119 still live Successful rate: 44% .113 unsuccessful 3.26.338 successful 13.

362 “backers” 118.  793.308 (18%) repeat backers $20 million (28%) of the dollars pledged came from repeat backers.  .

“Music” is the most popular.Of all the 13 categories available. “Film & Video” comes close .

2011) .Funding totals by category (April 28.April 27. 2009 .

717.601.063 10) Games: $1.492 13) Fashion: $554.184.732.501 6) Theater: $2.790 2) Music: $13.547 3) Design: $3.361 9) Food: $1.732 Funding totals by category (April 2011) 5) Publishing: $2.118 12) Dance: $645.570.679.503 7) Technology: $1.109 8) Photography: $1.557 11) Comics: $943.1) Film: $19.048 .583.094.052.851 4) Art: $3.748.

386.078.54 6) Fashion: $4.210.396.81 2) Technology: $12.469.47 10) Writing & Publishing: $4.224.09 4) Food: $6.446.655.87 7) Photography: $4.36 11) Art: $3.96 13) Dance: $2.29 .782.259.54 Average amount collected by a successful project according to each category: (total amount collected by each category as of April 2011 / number of projects as of July 2011): 3) Film & Video: $6.435.23 8) Comics: $4.71 12) Theater: $3.009.22 5) Games: $5.1) Design: $16.847.59 9) Music: $4.

000 Percen t fun ded 276% 103% 140% 107% 300% 108% 121% 139% 112% 111% 187% 140% 525% 100% 184% 107% 103% 182% Nu mber of backers 4495 1937 3631 2001 518 2336 1514 1814 466 902 2601 1228 1495 187 1686 840 888 1239 SAVE Blue Like Jazz! Rise and Shine: The Jay DeMerit Story Minecraft: The Story of Mojang Neil Gaiman's The Price My Reincarnation Man-child More Business of Being Born Urbanized: A Documentary Film ThanksKilling – Killer Turkey Movie Sequel! I Am I Stripped: The Comics Documentary Least I Could Do: The Pilot Finding Vivian Maier Wrestling Revolution All Things Must Pass: The Rise and Fall of Tower Records On The Ice Mosquta y Mari Terry Pratchett's Troll Bridge .025 $105.042 $100.248 $111.025 $85.480 $92.992 $223.965 $109.774 $150.297 $161.505 $112.100 $121.679 $118.422 $210.456 $125.468 $82.690 $82.Top 20 most funded Film & Video projects Position 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Title G en re Documentary Documentary Documentary Animation Documentary Narrative Film Documentary Documentary Narrative Film Narrative Film Documentary Animation Documentary Narrative Film Documentary Narrative Film Narrative Film Short Film Dollars pledged $345.141 $105.

Kickstarter's Top 20 most funded Film & Video projects by genre: 2010 Top 20 films by admissions in the European Union (EAB 2011): 2010 Top 20 European Union films by admissions in the EU (EAB 2011): 2 1 1 10 D o c u m e n t a r ie s N a r r a t iv e F ilm s A n im a tio n s S h o r t F ilm s W e b s e r ie s 6 N a r r a t iv e F ilm s 14 A n im a t io n s 3 1 N a r r a t iv e F ilm s A n im a t io n s 16 D o c u m e n t a r ie s 6 .

IndieGoGo .

”    . Anyone from anywhere in the world can create a funding campaign. 4% service fee on every dollar collected. across 201 countries. Launchers of unsuccessful projects can keep all the money raised minus IndieGoGo's fee.  Launched at the Sundance Film Festival in 2008. 9% fee on projects that failed to meet their goal. “Helped raise millions of dollars for over 40.000 campaigns.

etc. has now broadened its appeal to all kinds of creators. “religion”.   . 2) causes (“animals”. Absence of real significant data and muddled navigation interface makes it very difficult to reach a conclusion about its impact on independent filmmaking. “politics”. Initially geared towards independent filmmakers. Three types of categories: 1) creative projects (“film” appears separated from a “video/web” category). 3) entrepreneurial (“food”.). “small business”. artists and entrepreneurs. “sports” and “technology”).

The Age of Stupid .

Plot: an archivist living in the year 2055 looks back to our present age and becomes aware of the way apathy towards the gathering effects of climate change led to a world plagued by natural catastrophes. Premiered on 550 screens in 45 countries all over the world. Crowdfunding allowed the director to retain her distribution rights: no one except herself got to decide where the film was screened.000 were offered a share in case of profits (Grant 2010. Those who donated £20 got the chance to see their name credited on the film's website whereas those who made investments of at least £5.     . £450. The first crowdfunded film achieving worldwide theatrical releases. Dell 2008).000 were raised from 242 individuals and groups. 2009 docudrama on climate change directed by British film director Franny Armstrong (McLibel).

The Cosmonaut .

The rewards sprang from the right to see its name on the film credits to a signed DVD of the movie or a diner with the director. had already attracted 2367 “coproducers” who contributed between 2€ and a maximum of 1.000€ (Alcalá 2010). Crowdfunding only a small part of the film budget: 5%.   . As of November 2010. a group of three young Spanish audiovisual professionals based in Madrid. Sci-fi feature film produced by Riot Cinema Collective.

upload it or download it from file sharing sites and networks. The film has at least attracted 70 investors (Alcalá 2010).    . create derivate works like remixes and share them online – but only on the condition that these derivative works carry the same license of the original. mostly for non-commercial uses. Funders who donate 1000€ or more become investors and receive a percentage from all the profits. The user can freely watch the film online.406€. The full movie on HD and all raw footage with a Creative Commons Share-Alike license. Donors and investors have contributed with 85. distribute links to it over social networks.

.Conclusion Purpose 1: determine if crowdfunding can be seen as the engine behind a new and sustainable ecosystem for the financing of films. Purpose 2: demonstrate that constant demands for the repression of non-commercial file-sharing made by incumbent cultural industries are counterproductive.

Crowdfunding is opening the door to a new kind of filmmaking. These films meet what was until now an hidden demand of the spectatorship which the commercial circuit based on the box office and DVD renting and sales was unable to satisfy precisely because of the high costs of entry associated with the film industry.Conclusion Crowdfunding enables the fan communities of films and TV shows that Henry Jenkins (2006) sees as hallmarks of a participatory culture to evolve to a deeper stage of participation. . Kickstarter and other collective financing platforms are enabling documentary filmmakers to make their projects come true without necessarily having to depend on anyone else besides the spectators.

The Culture of Remix 2nd International Graduate Conference in Communication and Culture Universidade Católica Portuguesa Lisbon. 13-14 October.0 . 2011 Miguel Afonso Caetano & Gustavo Cardoso CC-BY-SA 3.

flickr.com/photos/mburpee/139991425/ http://www.com/photos/laughingsquid/4629827059/ http://www.com/photos/centralasian/5433404872/ http://www.flickr.Images used (Creative Commons licensed) ● http://www.com/photos/opensourceway/4371000464 http://www.com/photos/pipeapple/3280609082/ http://www.flickr.flickr.flickr.com/photos/detleflagrand/5793883205/in/set-72157615791115592/ http://www.flickr.com/photos/nicosmos/559550233/ http://www.flickr.flickr.flickr.com/photos/pollyann/2086014738/ ● ● ● ● ● ● ● ● ● ● .com/photos/magiccyril/4765097677/ http://www.flickr.com/photos/calsidyrose/4854997345/ http://www.flickr.com/photos/atomicjeep/73248430/ http://www.

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