Crowdfunding with a Capital C: It’s Future in Hollywood
Films are shifting to crowdfunding for revenue, but is that the best move?
By: Michelle Monteiro, Staff Writer
When Chinyere Fidel, a 21-year-old Book and Media Studies student at the University of Toronto, was browsing the Internet one day, she wasn’t planning on pledging money for Reach Me, a film about “a dozen characters who get a second chance at life as a result of coming into contact with a book.”
The director, John Herzfeld, who began writing the film over a decade ago, launched a Kickstarter campaign after his main investor pulled out, pleading with the online community to help him raise the $250,000 needed to finish the already-started film.
A ten dollar donation will give Fidel, a downloadable PDF of the movie script; one hundred dollars would give her an opportunity to go to an advanced screening of the film in Los Angeles; for a hundred dollars more, she could participate in a Q&A session with Herzfeld and the cast; a thousand dollars, and she could have dinner with the cast members. The list doesn’t stop there but Fidel isn’t doing it for the reward, she wants to help the struggling director.
“This movie project really peaks my interest,” she said. “So of course I would invest in something that I want to see brought to life.”
Herzfeld is among a list of celebrities to turn to Kickstarter, one of the many crowdfunding websites available, to fund filming projects amongst other things. It just goes to show that no one is too big, or too cool, to crowdfunding.
In its early days, crowdfunding was a way to fund what couldn’t be funded in the traditional sense, to challenge the mainstream Hollywood system. It has been the silver-lining for low-budget filmmakers who’ve struggled to access conventional funding, however, larger projects are now reaching directly to their potential audiences to secure their budgets through these innovative platforms. With a growing number of accomplished directors, producers, screenwriters and the like turning to crowdfunding, it begs the question, has crowdfunding shifted the way Hollywood films are being produced?
Sylvester Stallone, who plays Gerald in the Reach Me film, seems to think so. In Herzfeld’s Kickstarter campaign, he is heard saying that backers (those donating their own money in support of a project) are “participating out of their kindness and their love of films and [are] changing the way films are being made.” But is Stallone correct?
Although, crowdfunding isn’t a recent phenomenon — in fact, an early model can be traced back to the 18th century — it has only recently received attention and much controversy in the advent of the Internet. Defined by Deloitte, a professional services network, crowdfunding portals are “websites that enable large numbers of individuals to financially support a project or company, with each backer contributing just a small percentage … of the total funding”.
With global funding waning, most likely due to the economic crisis, alternative methods were explored as crowdfunding came full force in 2009 with the launch of Kickstarter. Fast forward to 2013, and independent films have received over $100 million through Kickstarter alone, not to mention what other crowdfunding platforms have raised. Huffington Post coins crowdfunding the “reboot of capitalism,” a convenient way to circumvent the competitive film industry in today’s society.
Currently, there are over 450 crowdfunding platforms (CFPs) active worldwide, the majority based in North America and Europe. Massolution, a research firm specializing in crowdfunding industries, recently released its Crowdfunding Industry Report, which revealed that CFPs raised $2.7 billion in 2012, an 81% increase over the previous year.