April 24, 2014

Kickstarter and the Future of Entertainment

Recently, the most successful Kickstarter campaign of all time began. It’s still going on. Tim Schafer started a campaign to raise $400,000 to build an adventure game and film the process. Game publishers, he explains in the hilarious campaign video, consider the genre dead, and would not fund him.

So he asks for $300,000 for the game and another $100,000 to pay a team to shoot a video about the making of the game. Well, that expectation turned out to be a little ridiculous because he didn’t raise $400,000; he raised $1 million.

And that was the first 24 hours.

The kitty is now up to almost $2.5 million, with 7 days to go. Needless to say, they’re making some improvements.

The histogram on these donations is actually pretty interesting. For those of you who don’t know, Kickstarter funds go like this. Someone posts a goal—something they want to build, like a website or a product, or maybe an organization they want to launch. In any case, they ask the crowd for money. For donations at different levels, the donors get different rewards. It’s the PBS tote bag, except you actually want the reward.

For this particular fund, the highest levels were $10,000, $5,000, and $1,000. These levels each had limited numbers of slots. Only ten people could donate $5,000, and so on. Well, for the most part, those were the slots that sold out first. Even now that they’ve added more (and more rewards), the second and third highest levels are sold out, and the highest has only two slots left.

The point is that when we think of crowdsourcing we often imagine a giant pool of people all doing the same thing. Their collective efforts are harnessed and the whole ends up being greater, or at least equal, to the sum of its parts. So, if you were to plan out a Kickstarter campaign, you might imagine to yourself that in order to raise $1 million, you’d need 1 million people to donate one dollar, or 100,000 people to donate $10, or 10,000 people to donate $100, and so on. You’d set your expectations for how much you could raise accordingly.

Except here’s the thing. It turns out you can knock out a big chunk of change just by raising your expectations a lot and handing out prizes for high net worth (or at least those willing to donate large sums) individuals. This, of course, is old hat in professional development (the “fundraising” meaning of that term), but I don’t think anyone expected that to scale down to the “amateur” world of Kickstarter.

The fact that it does changes everything.

Before it would be unrealistic to imagine that you could raise large sums using Kickstarter. Sure you could get into the tens and maybe even hundreds of thousands of dollars by reaching hundreds or thousands of people. But it would be unreasonable to think you could reach hundreds of thousands or millions each contributing small sums. But that goes out the door once ten or twenty of those individuals are donating tens of thousands of dollars.

As soon as I heard the news that Schafer had raised $1 million, I immediately asked myself how much money it would take to make a sequel to Serenity.

Back in 2005, Joss Whedon made a television show that everyone loved and, of course, it got screwed. He came back and made a movie that everyone loved, but also got kind of screwed. As it turns out, Joss landed on his feet, but fans of the show and the movie have hungered for more. So let’s perform this little thought experiment:

Let’s say Joss Whedon gets on Kickstarter and does a video where he asks for $50 million to make a sequel to Serenity. Let’s say at the $50,000 donation level you get dinner with Joss. Let’s say at the $100,000 level you get dinner with Nathan Fillion. Let’s say at the end of the 30 days, Joss has actually raised $75 million.

Point is, shit might scale.

The New Risk

There are two ways in which this changes things. One has to do with silly things like SOPA and PIPA, which become, for lack of a more elegant phrase, totally fucking irrelevant. Before we had a system where one large body—a studio—would buy/commission a property from an artist and then resell that property to the public. This required them to own the rights to that property because, otherwise, what right did they have to sell it? (Special licensing deals aside—hats off to Beck for always retaining copyright.) More to the point, they took on the financial risk, so they had to protect any financial reward.

Now you have a system where the audience commissions the property from the artist directly, and the artist in turns sells (or really gives, if the customer was an investor) the property to the customer directly. No studio. No studio ownership. No studio risk. No fear of piracy. No SOPA. No PIPA.

Now, “no fear of piracy” might be a bit extreme. Of course, any of these properties might be pirated once they exist, but in this system the motivation is lower because the most ardent fans have already paid for the product. And if you look at the few examples we have of artists selling directly to fans, even when the fans weren’t investors (Louis CK comes to mind), piracy, though it exists, does not seem to be crippling and, in fact, the artist seems to thrive.

A fair point to make here is that “thrive” is a term to be used cautiously. I don’t mean that Louis CK can now go and buy the Lakers. I mean that he can afford to keep doing what he loves to do.

So a lack of corporate-owned mediation between artist and consumer leads to a lack of all the baggage that comes with corporate-owned mediation. But what else?

The New Consumption

The second big shift is we get to redefine the consumer paradigm. Most consumption takes place at the end of the content production process. Someone makes a movie, puts it into a distribution system with a bunch of other movies, then you select it from a menu of some sort that comes at the tail end of that distribution system. Put another way, you get home, fire up TV, TiVo, Roku, Netflix streaming, etc. and say “What’s on TV tonight?”

Now we have a new option. Someone decides they want to make a movie, they cut a trailer or some other kind of promotional representation of the work-to-be and puts it in a fundraising system with a bunch of other would-be movies, then you select it from a menu of some sort (like Kickstarter) that comes at the beginning of the production process. Put another way, you get home, fire up Kickstarter, IndieGoGo, etc. and say “What do I want to be on TV six months from now?”

Obviously that option requires a little more forethought, but I bet it still catches on. And once it’s been going on for a while, you have a backlog of movies/tv shows/web series that you’ve funded that are premiering as you make decisions about new movies/tv shows/web series that you want to fund, and I think that will get addictive for at least some of the current audience who for now only have the tail-end consumption option.

I call this “radically time-shifted consumption”. From the filmmakers’ end, you might call it “crowdsourced patronage”.

An important point to consider is that Tim Schafer and Louis CK are not nobodies. They have name recognition in their respective fields. Not superstars, but names. But that’s kind of where these revolutions tend to start. Look at what Kevin Smith did with Red State (which, I reckon, he probably could’ve funded via Kickstarter were he to make it today), or what Prince, NIN, or Radiohead did with some of their efforts. Abandoning a resource offered by a studio (production, distribution) in favor of the freedoms (and headaches) afforded by self-distribution/production, which works in part because of the brand the artist has established.

Which leads to the “It’s great for Celebrity X, but it’ll never work for the common artist” argument.

But check it. Let’s say nobody’s heard of me. (Let’s not just say, it. Let’s know it. Nobody’s heard of me.) I try to raise $1,000 for some super-cheap short I want to make. I think I could probably pull that off. Let’s say it takes off or I have to make a few more at that level before a few more people know who I am. Now I’m asking for $10,000 for something with a little more scale. I bet I make that number. After a few more of those I go for a feature at maybe $50,000 (it’s been done for much less). I hit that and now I’m rolling so I go for $100,000. Assuming my films are any good and I have some skill building an audience (or know someone who does), how long before I’m able to ask for $1 million? $5 million? And as the system has evolved around me, how long before the recommendation engines that start driving the system get better at connecting me with the “high net worth investors” who are interested in my kind of work? Now tens of millions are rolling in. Maybe.

My point isn’t that this situation is probable for every young filmmaker with a dream. My point is that it’s plausible in a way that it’s never been in the history of film.

To wit, 31 of the films showing at SXSW this year were funded by Kickstarter.

As with most technology assessments, I’m probably overestimating the short term impact and underestimating the long-term impact, but where this could go still excites me.