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The Potential Future of Film Financing: Crowd-Equity & Micro-Licensing Platforms


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How much impact can crowdfunding sites have on the $22bn global investment business? Colin Brown taps into the key sites for Screen International - and discovers life beyond Kickstarter donations. Are micro-equity investments and micro-licensing the future of film financing?

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The Potential Future of Film Financing: Crowd-Equity & Micro-Licensing Platforms

  1. 1. feature focus also allows campaigns to receive all the have gone out of their way to steer clear money pledged, whether or not the ini- of selling securities,” Steele continues. tial funding goal has been reached “Nevertheless, they have the infrastruc- “Campaigns on average will get 20% ture to segue into a post HR 2930 world from strangers,” explains Rubin. “Some as a securities brokerage. But, speaking campaigns will get 90% from strangers as somebody who also advises media and some won’t get a dollar at all. To get technology companies, they would be exposure from IndieGoGo and stranger wise to wait for the IRS to finalise the dollars, you want to have a high GoGo- rules and regulations spelling out who Factor — a custom algorithm which can or can’t participate and what the tracks how active every campaign is brokerage requirements are.” based on comments, funder updates, Steele believes far greater potential promotions etc. Based on the 50,000 lies in innovative micro-licensing sites campaigns on IndieGoGo, the typical such as SoKap.com that allow produc- tipping point to start getting stranger ers, authors, musicians and game dollars is when the campaign has developers to raise project funding by reached 30%-40% of the funding goal.” pre-licensing their distribution rights IndieGoGo counts among its suc- on a hyper-local level. For example, a (From left) Kickstarter the value chain of the products they cesses this year’s audience award win- film-maker could license the rights to founders Charles Adler, Perry support,” Steele suggests. “Traditional Chen and Yancey Strickler ner at the Tribeca Film Festival, Give Up market and distribute a film in just prints and advertising costs, which are Tomorrow, as well as international pro- Santa Monica or across all platforms in prohibitively expensive, will become ductions such as UK documentary California from which they will receive much more coveted word-of-mouth You’ve Been Trumped and Japan’s Hafu. an off-the-top distribution fee on sales. campaigns, the onus of which falls to A partnership with the UK’s Sheffield “This allows fans, merchants, early- the local distributors, not the producer.” Doc/Fest means the site also hosts a adopters and taste-makers to monetise Welcome to the film industry’s Face- whole day of live crowdfunding pitch their social networks and participate in book era. ns Oscar-shortlisted Battle For Brooklyn raised funds on Kickstarter sessions staged during the festival. How much of a dent will this all Online film festivals online funding draws a crowd make in the $22bn annual film invest- ment marketplace? That depends on the scale of production. “For the inde- There are dozens of consumer- Unifrance and AlloCiné partnership pendent film-maker, disruption is focused web-streaming sites that MyFrenchFilmFestival.com How much impact can crowdfunding sites have on the $22bn global investment already happening,” suggests Shooting cater to all manner of niche and People co-founder Cath Le Couteur. mainstream markets. There is the for a feature, $1.30 for a short, or business? colin Brown taps into the key sites But for larger films, crowdfunding’s ad-supported Babelgum platform, the entire slate for $18.40. For next future may pivot on the Entrepreneur for example and there is also year’s event, SnagFilms will have a mong the 15 documentary fea- opted to pledge $25 in return for a raised but also about the supporters you Access to Capital Act, HR 2930, now MUBI (formerly The Auteurs) the exclusive US distribution rights tures shortlisted for the ‘thank you’ credit and regular e-news- bring to your project going forward. I under review in the US Senate. If that proudly points out “our film for VoD to cable, satellite and telco Oscars are two that received letter updates. personally feel very invested in all the approved, the law would allow crowd- library is brimming with visionary video providers.some of their financing through online There have been more than 4,000 crowdfunding campaigns I have con- funding to include equity investments films that wouldn’t fill a single Unifrance, the munificent French Naturally, there is a competitioncrowdfunding. Battle For Brooklyn and successfully funded film and video tributed to and would be far more likely in projects, and not just donations. cinema in Belgium for a week — film promotion association, and the element too, not to mention theThe Loving Story both raised finishing projects on Kickstarter since it was to pay money to see them in a cinema or Projects could raise up to $2m, in no not a single day”. online Paris film directory AlloCiné. usual complement of exclusivefunds through Kickstarter, one of as founded by Charles Adler, Perry Chen give other kinds of promotional support more than $10,000 increments. And, of course, every major According to Unifrance general interviews with the film-makingmany as 250 platforms that offer film- and Yancey Strickler in 2009. Those down the line.” “The good news — and the bad news festival now comes equipped with director Régine Hatchondo, this is talents.makers and other creatives a chance to projects have raised more $41m in com- For all the attention garnered by New — is that no restrictions online screening rooms. Some, “the first online festival accessible Six prizes are awarded at thepitch for small donations from friends bined pledges. That figure breaks down York-based Kickstarter, its donations have been placed on such as Tribeca, even try to mimic all over the world”. end of the festival (three forand strangers alike via personal videos. as follows: $13m for narrative features require a US bank account. There are no what types of compa- their real-life avatars by introducing The second edition, which will the feature films, three for the These online appeals are posted on including a direct-to-DVD release of ‘A successful such geographic limitations for its San nies can raise capital in an element of exclusivity: users are run from January 12 to February shorts): the internet users prize,the website alongside a description of Hal Hartley’s Meanwhile; $16m for Francisco rival IndieGoGo, the leading this manner,” observes asked to reserve their free tickets 1, will premiere 11 features and 11 the foreign bloggers prize and thethe project and an escalating list of documentaries; $8m for shorts; $2m Kickstarter global platform for crowdfunding film-finance expert Jeff to films that have only three to five shorts from emerging French- international press prize. There arerewards that come with different pledge for web series; and $2m for animation. campaign is not projects of all kinds, including charita- Steele, who spear- screening windows each. A limit language directors — as well as one no cash prizes at stake. However,levels: a T-shirt, a DVD, a digital down- “Kickstarter is really the latest itera- just about the ble causes, that has also distributed mil- heads Film Clos- is put on the number of virtual French cinema classic. Widening the audience-award winner will beload, an invitation to the festival pre- tion in the long history of arts patron- lions of dollars since launching in 2008. ings. “So it’s a seats per window. the definition of French cinema, featured on SnagFilms after themiere and so on. age,” says the site’s communications money raised “We have hosted over 50,000 cam- wide open field Now comes an online that menu includes two titles from event. And all three of this year’s Battle For Brooklyn received $25,506, director Justin Kazmark. but also about paigns,” says CEO Slava Rubin. “As for innovation — talent-spotting showcase that Quebec. feature films category winners —which was then enhanced with a As Shooting People’s Ingrid Kopp the supporters long as you have a bank account, there and corruption. has its own window in the This is not simply a promotional Qu’Un Seul Tienne Et Les Autresmatching grant. The Loving Story, points out, the value of crowdfunding are no restrictions on locations for “Gifting sites festival calendar, but no actual exercise, however. French film fans Suivront, Tout Ce Qui Brille andwhich needed cash to meet the costs of extends well beyond the dollar you bring to project owners or funders. We are open like Kickstarter allegiance to any physical must pay for the privilege. In the Espion(s) — were screened ona hefty licensing tab for archive footage amounts. “A lot of film-makers have your project’ to 200 countries.” and IndieGoGo event. MyFrenchFilmFestival. US, the first showcase this January board all Air France planes for six toand music, secured $15,383 towards realised that a successful Kickstarter Ingrid Kopp, IndieGoGo’s 4% cut of money raised com is a partnership between had the following rate-card: $2.60 nine months.post-production; most of its backers campaign is not just about the money shooting People is lower than Kickstarter’s 5% and it Give Up Tomorrown 32 Screen International December 16, 2011 www.screendaily.com www.screendaily.com December 16, 2011 Screen International 33 n