Crowdsourcing and crowdfunding

[Jon Williams]

Diary of a Bad Lad's erstwhile executive producer Tommy Morghen recently published this comment piece on 'crowdsourcing/crowdfunding' on his facebook page. And because this is something which people are becoming increasingly interested in, I've taken the liberty of reprinting it here without his permission.

"Crowdsourcing, here’s the theory: tell people about the film you want to make and they’ll give, and I don’t mean ‘loan’, or ‘ lend’ or ‘invest’, I mean give you the money to make it!

Of course you do have to offer incentives, like - “Everyone who donates £10 gets an ‘associate producer’ credit at the end of the film”, or – “Donate £100 and you’ll also get a signed photograph of me holding a camera!” And you can go all the way up to - “Donate £10,000 pounds and I’ll even arrange a private screening of the film for you and your friends in your own home!”

Believe me, people have done this. Look hard enough on the internet and you’ll find them. OK, they might have pulled off getting people to pay for them to record a CD of their folk songs. But there are people who’ve done it with films. And you can too!

Today anyone can make a feature film for £5,000. Now you could simply borrow the money on a couple of credit cards, and then keep rolling the debt over through ‘no interest for the first 15 month’ transfers. But why should you when people will give you FREE MONEY!

Here’s how to do it: put the details of your project on one of the crowdsourcing sites, like ‘indiegogo’. But remember, no one backs a loser, so if they see: money needed, £5,000; money raised so far £zilch, you’re going to get nothing.

But what if you could borrow £10,000, and then donate to yourself through a number of friends? Then you could say, “Money needed, £15,000 (which would make your film sound better because it cost more), money raised so far £10,000” (and in just a few days: gosh, this project is hot). Hit that target, pay back the ten grand, and you’re quids in. And if you don’t hit the target then no one parts with any money, so you’ve lost nothing!

Of course it does work better if you’re a major player, such as a director with a bit of a cult following. Let’s say some private investors have put in £500,000, but you’d really like another £250,000, then crowdsourcing is definitely for you. Just make sure to let your fans know how much you really value their contributions….

But the best way to make money from ‘crowdsourcing’ isn’t to have a film project in the first place. No, there are people out there who are so desperate to find out how to do ‘crowdsourcing’ (or be a ‘transmedia’ producer, or how to do ‘on-line distribution’, etc) that they’ll pay anyone who’s set themselves up as a ‘consultant’ a king’s ransom to attend their seminars. And setting yourself up as one of them is much, much easier than trying to beg money from people so that you can go off and f*ck about with a camera at their expense.

 

[Gorf]

Very interesting read - thanks for the link!

 

[Jon Williams]

Kickstarter and Indiegogo – Is this David Cameron’s ‘Big Society’ in action?

Much as I agree with most of what Tommy says being a one-time academic I’m interested in a bit more detail. Crowdsourcing/crowdfunding is dominated by Kickstarter, and it’s smaller rival, Indiegogo.

With Kickstarter you have to reach your target within the time frame you’ve set – 30 days seems to be best. If you don’t then no money changes hands. But a surprisingly high percentage of the thousands of film ‘projects’ on Kickstarter reach their goal. Why’s that?

Well, for starters, the goals tend to be very modest, with most trying to raise $5,000, or so - although there are ‘projects’ which have raised over $150,000. But also the most detailed tips are just a google search away. What’s essential is to plan your campaign well in advance, have friends and family ready to pledge money as soon as you fire the gun, spam like you’ve never spammed before, harvest all the email addresses; and, just like all the charities do, use your list to badger everyone who pledges anything to give you more (the only difference is: you’re not a charity, you’re a ‘beggar’).

Just a few days to go and you’re still $1,500 short of your $5,000 target? You don’t want to see that pledged £3,500 disappear; so borrow the rest on a credit card, and pledge it as an ‘anonymous’ donation. And then email everyone trumpeting your success and then invite them to celebrate with you by giving you more money! Simply pay off your credit card bill when the pledges are transferred to your account.

For many, many, more tips – in fact for a complete guide – see for example: https://docs.google.com/present/view?id=dgw4v3hg_51cqzmmxfd&pli=1

The thing with Kickstarter, though, is that it’s Americans only. But with Indiegogo you can use their service from anywhere in the world. What’s more you don’t even have to reach your target; whatever’s being pledged is coming your way. So if this is the way you want to gog, then Indiegogo is the only way to gogo for you.

Of course there is a 4 – 5% charge for all this, and either Amazon or the credit card companies will take 3% or more as well. And if you don’t hit your target, Indiegogo takes an even bigger slice.

I say ‘even bigger’ quite deliberately. Just compare this with the estate agents that we all love to hate: they charge maybe 1.25% and they do actual work advertising and selling your property on your behalf. But when it comes to, let’s call them, ‘crowdsourcing agents’, you do all the work – and that’s mountains of it if you want to succeed – and they and their business partners are creaming of 10% or even more.

Yep, ‘crowdsourcing agent’ certainly does look like a great business model; it’s money for old rope. Maybe that explains why Indiegogo’s chief executives were previously investment consultants for such as J.P Morgan, various hedge funds, Mastercard, and Goldman Sachs.