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financing What makes movie crowdfunding campaigns successful?

m-wall

Member
Hi guys,

I’m currently working on a research project for my university. The goal is to find out what potential backers are looking for in movie crowdfunding campaigns and if the crowd responds to certain signals.

As a part of this, I'm doing an online experiment, in which every participant sees a couple of crowdfunding configurations and is asked which one they'd prefer. I'd love for you all to take part: http://www.dev.bwl.uni-muenchen.de/cgi-bin/ciwweb.pl?studyname=moviecf&ref=ekQkZ

But I’d also love to hear about your personal experiences and opinions on movie crowdfunding. Has anyone of you successfully financed their movie project like that? Has anyone tried and it didn't work out? What are you personally looking for in a campaign? Thanks, everyone!
 

indietalk

IndieTalk Founder
Staff member
Admin
:welcome:

Have you seen any successful ones? Can you list them please? I have not seen any, to me, crowdsourcing works best for things like new inventions, must-have gadgets, etc. I have seen a lot of indie movies ones but nothing happens.
 

indietalk

IndieTalk Founder
Staff member
Admin
Why would I give $100 for someone to make a movie? But if I can get a cool new gadget for my kitchen, sure.

In other words, most people use them for pre-sales but call it crowdfunding. The "perks" of merchandise are simply sales. So what do you get for a movie? The DVD, or a credit? Boring.

It really doesn't work.

Perhaps some star power attached to something that was canned by a studio, or something... like a sequel people really want to see...
 

mlesemann

Moderator
Staff member
Moderator
I'm interested to see that you're in Germany, because I'm aware of one in your country. Laura Thies, who directed my first feature, Surviving Family, successfully crowd-funded the balance of the production cost for her movie Schattenwald (Amongst the Shadows). She DID receive a number of grants, but crowd-funded about EUR 30,000 I believe.

If you want to email her, DM me here and I'll give you her info.
 

indietalk

IndieTalk Founder
Staff member
Admin
Nice!

Yes finishing funds is one way, but imo you must have a fanbase or really good material finished. Easier said for indie musicians really, local bands, etc.

The ones that fail most are the ones seeking full funding where it looks like a handout. Usually young inexperienced filmmakers without even a reel.
 

m-wall

Member
Thanks for the welcome! :)
There are a number of successful movie crowdfunding campaigns, check out this Kickstarter link if you're interested. Most campaigns don't raise a lot of money, but there certainly are some successful ones. And that's just Kickstarter, there are many other platforms, as well. Seed&Spark, for example, is focused on filmmakers.

But you're right, it's not easy to get funded. Most bigger campaigns are based around a star or some kind of existing story people want to see continued. However, there's other options than DVDs or signed movie posters. It's also possible to offer your backers profit participation, for example. Do you think people would prefer that?

@miesemann: Wow, that's super interesting. Thanks for the offer, I'll have a look into the campaign.
 

indietalk

IndieTalk Founder
Staff member
Admin
Profit participation would be illegal, the SEC would crack down on you for selling illegal shares to the open market.
 

m-wall

Member
Not necessarily, since the JOBS act got signed into law. Other countries have similar laws.
In fact, there's already a couple of movie crowdfunding campaigns which are taking advantage of equity crowdfunding, but it's still very much a niche. I wonder, why it's not more popular.
 

indietalk

IndieTalk Founder
Staff member
Admin
This allows for the crowfunding itself, and for the perks, but not profit sharing on the open market. That is totally different and selling stock. Privately is different than the open market. I will assume some are doing it sure, but it's illegal.

For example online raffles are illegal as well, but people still do it.
 

indietalk

IndieTalk Founder
Staff member
Admin
I'll answer your first question directly now. What would I want as a perk? Something tangible. Example, if a new Crocodile Dundee was seeking funds, and the perk was a high quality reproduction of the knife, and I was a fan, that is what would interest me. For indies, perhaps some new gadget you could introduce in the film. So you could partner with a sponsor, and work it into a scene. And they get that perk. You could even partner with an existing kickstarter that is doing well. Contact them for product placement and offer it as the perk.

There you go. Steal my idea, it's yours. ;)
 

sfoster

Moderator
Staff member
Moderator
if youre casting an instagram model in your film with 1,000,000 followers then crowd funding might work
 

m-wall

Member
This allows for the crowfunding itself, and for the perks, but not profit sharing on the open market. That is totally different and selling stock. Privately is different than the open market. I will assume some are doing it sure, but it's illegal.

For example online raffles are illegal as well, but people still do it.
Okay, that's interesting, I didn't know that.

I like your other idea, though. I haven't seen a campaign doing that, but it could be promising. I guess any way to expand your potential audience is probably a good start. The same applies to instagram people. Even if just 0,1% of their 1,000,000 followers backs your campaign, thats already 1,000 backers. Barely any campaign gets that many at all.
 
The old saw is, "Crowdfunding is two words. If you don't already have the crowd, you ain't gonna get the funding." Strangers are not going to give you money to make your movie. You must build your audience before you get to the crowdfunding stage. (Very helpful, I know.)

-- Damian
 

m-wall

Member
@Damian: Do you happen to know if that's a quote or just a saying?
I totally agree with that, by the way. Already having an audience makes the whole crowdfunding process a million times easier. My research project is more about optimizing a campaign, though, and making sure it's as attractive as possible to potential backers.
 
M-Wall: That's a (more or less direct) quotation, but I can't find the source. It might have been someone interviewed by Ted Hope for his old "Hope For Film" website.

Sorry; it seems I misunderstood the point of your inquiry. Optimizing a campaign to make it attractive to backers, eh?

One thing that my own researches suggests is that most crowdfunding campaigners make the campaign too much about themselves. "It's always been my dream to make movies, so give me money to make my dreams come true." Well, who cares about your dreams? What's in it for me -- and, alongside that, what's in it for movie-making? The people who put their money into crowdfunding campaigns aren't backers, they're donors. They're not loaning you money against future returns; they're giving you money from the kindness of their hearts.

A few things that people I have read or spoke with have said they'd like to see in a crowdfunding campaign:

1) Some kind of plan for distribution. Do I want to give money to yet another movie that will never be seen beyond the family and friends of the creators? That will top out at 29 views on YouTube? "We're going to enter film festivals and hopefully land a distributor," is not a plan. If I believe in a movie enough to donate my limited dough towards it, I want it to be seen and enjoyed by others, not just made and then lost on the director's hard drive.

2) Some of the most successful crowdfunding campaigns have included stars (major or minor). But when it comes to independent movies, the presence of stars can be a negative factor; indeed, it can stir resentment. If you can attract a star, you can attract investors, so why are you soaking up limited charitable funds?

3) Too-grandiose plans can turn off donors. If your idea is an interlocking series of movies like the MCU, I know you have no sense of realism. Marvel has pre-existing fans of 80 years of stories and characters by hundreds of creators, and spends $200 million per movie; you don't have any of those advantages. Ask for donations to this movie you want to make, and I might think more kindly. Likewise if you're trying to raise millions of dollars; that just makes me think you're an amateur with more dreams than practicality.

4) Spending most of the money on capital costs can arouse skepticism. If you boast about how you're going to buy a complete RED kit (it's always a RED), then I'll think either you're a gear-head rather than a movie maker, or you're asking me to fund your business start-up costs rather than your movie.

5) Perks and rewards for donating should be tangible and exclusive. I don't want a link to a digital download; I want a disc in a keepcase (and a digital copy) -- even better if it's autographed to me personally. I don't want my name among dozens (or hundreds) of other donors in the closing credits that nobody will ever watch; if that's what I'm getting, I want a credit that improves my score on IMDb. I want to feel as if the perks cost the creators money and / or time -- that I'm worth the effort. A half-hour phone call from the creator might be valuable, if I'm already a fan; it's my chance to ask questions and feel like a Close Personal Friend, an Inside People. (That's much less valuable if I'm not already a fan.) The suggestion above for some merchandise from the movie is good.

These are just off the top of my head, representing some things that I've gleaned in my own researches (which are ongoing); they're hardly the word of god. Consider them, but (as always) be skeptical -- and remember that my free advice is worth every penny!

I hope you'll report on some of the things you learn from your own research!

-- Damian
 

m-wall

Member
Thanks so much, those are some really interesting thoughts and it all sounds very reasonable.

The festival circuit line really is one of the evergreens, I’ve seen it a lot, but apparently people don’t realize how hard it is to do a successful festival run and get distribution. On the other hand, as an indie filmmaker you don’t have too many other options for distribution, either.

The RED investment idea is so naïve, it’s actually funny. I mean, I want to finance the movie and not someone’s RED.

The point you make about stars I’m not sold on yet, though. In fact, I haven’t really considered the option that star attachments could actually cause resentments, but come to think of it, it would totally make sense. I’ll definitely look into that a little further, that’s something the online experiment should allow me to analyze.

Your point about grandiose plans is also something I’ll look into. It’s extremely rare for movie crowdfunding campaigns to raise just one million dollars, many traditional indie productions are a lot more expensive. That makes it quite hard to predict how potential backers react to different funding goal levels. If it’s an „all or nothing“ campaign, higher goals should actually be associated with lower risk that the filmmakers run out of money and can’t complete the project. And if the campaign fails to reach the funding goal, backers don’t care, because they get their money back.

The thing about rewards is that some people might feel inhibited to pledge, because as backers they carry the risk, that the project fails, but they are not part of the upside potential. Maybe the movie ends up being profitable, the backers will be left with their keepcase and that’s it.

Anyways, some really interesting points here, I appreciate the discussion!
(And I’ll be happy to report back as soon as I have some reliable results from the experiment, of course!)
 
You pointed out, "people don’t realize how hard it is to do a successful festival run and get distribution." Oh man, is this ever true! People seem to think that just getting accepted into a festival will get them a distribution deal. That's just not how it works. You've got to go to the festival, in person, and aggressively work the rooms, to have even a chance of landing a distribution deal.

If your movie has no exploitable elements, then even if you do land a distributor, the deal probably won't include an advance; you'll get a share of the money the movie makes. First, the distributor will pay their expenses; second, they'll take their cut; third, they'll pay you (if there's anything left).

You said, "I haven’t really considered the option that star attachments could actually cause resentments". I recall three examples, just off the top of my head: the Veronica Mars movie, Zach Braff's Wish I Was Here, and some David Fincher project whose name I can't recall that sought development funding. The first two were controversial at the time, with people saying that this is not what crowdfunding is for; the last saw people saying that development funding should properly have been supplied by a studio, and was yet another way for huge corporations to socialize the risk and privatize the profit.

On the other hand, Veronica Mars and Wish I Was Here got funded and got made. You can't argue with success -- or rather, you can't argue that success is not successful. But you notice that, in Hollywood terms, those are very, very small budgets (even if, in indie terms, they are very, very large budgets).

You said, "It’s extremely rare for movie crowdfunding campaigns to raise just one million dollars, many traditional indie productions are a lot more expensive." Do you mean that it's rare for movie campaigns to raise as much as $1,000,000? 'Cause that does seem to be the case; in fact, raising one-tenth that amount is rare. The aforementioned Veronica Mars movie raised just over $5.5 million -- with a dedicated fanbase and almost 100,000 donors.

You can't use crowdfunding to compete head-to-head with Hollywood. If a creator wants to raise $100 million or more for a special-effects bonanza ... well, you hope the people with the butterfly nets catch up with that person quickly.

What do you consider a reasonable amount of money for an independent movie to cost? What do you consider a reasonable amount of money for a crowdfunding campaign to raise for an indie movie?

You said, "as backers they carry the risk". But they don't! The donors risk nothing beyond the amount of their pledge -- and once they've pledged, their involvement with the movie is over. Whether the movie is a runaway success or is never even finished is immaterial. If the creators run up huge debts and the movie fails, the donors are not on the hook for that. (And, as you correctly point out, if the movie is a breakout hit, the donors don't share in that reward. C'est la guerre.)

I look forward to hearing the results of your crowdfunding experiment!

-- Damian
 
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m-wall

Member
About the resentment. You say that you can't argue with success, and it's true that the two examples you mention (I was thinking of the same ones) actually did get made, but just judging by the ones that did get made would lead to biased results. It would be interesting to analyze success rates as a percentage of projects proposed, dependent on the funding goal. As far as I know, Kickstarter doesn't provide information about failed campaigns and I don't know of any platform that does. But arguably, there are just less projects with high funding goals in general and then the probability of succeeding wouldn't be that bad.

Also, what you said kind of means that crowdfunding actually isn't as much of a way to overcome traditional gatekeepers as it is always praised to be. It just extends the scope of externally-financed projects and allows lower-budget productions to get financing. And I frankly believe the same thing. At least for now.

Regarding your question about reasonable budgets for indies. My answer to that is anything but substantiated. But I think it's pretty unlikely to independently produce a movie (meaning without distribution deal at the time of production) for less than a million dollars and still have a good shot at getting distribution. And again, raising just one million through crowdfunding is extremely rare at this time. (Doesn't mean it's always gonna be like that).

I still think that backers bear risk, because their involvement is not over after backing. As a backer, you might expect a physical reward, you might expect profit contribution, you might just expect the satisfaction of supporting a cause, but you pay in advance and if the campaign initiators fail to complete the project, your expectations will not be fulfilled. As the initiator, you don't have anything in the game except for your reputation, because you got the money from the crowd. Now, obviously you do risk running over budget, but if you do, that's on you. You could have avoided that.

But hey, those are some really interesting points we're discussing here and they actually do help me a lot for this research project of mine! So thanks ;)
 

DimaSol

Member
Hello!

hope you are alright.

I have come across your post about a friend of yours who successfully crowdfunded a film. You said if someone was interested to get to know her, they should DM you. I was wondering whether you could help me with it as well :)
Thank you very much in advance.

Regards,
Dima
 

BBfilms

Member
3) Too-grandiose plans can turn off donors. If your idea is an interlocking series of movies like the MCU, I know you have no sense of realism. Marvel has pre-existing fans of 80 years of stories and characters by hundreds of creators, and spends $200 million per movie; you don't have any of those advantages. Ask for donations to this movie you want to make, and I might think more kindly. Likewise if you're trying to raise millions of dollars; that just makes me think you're an amateur with more dreams than practicality.
I get what your saying and I wouldn't write in plans like that either but just for note it can be done without an 80 year fan base and 200 million, Kevin smiths movies often interlock in ways to create a 'universe' and its definitely attracted fans (although the fact that Jason lee plays 3+ different characters drives me nuts lol)
 

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