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VIFF Industry: Crowdfunding Not Just About Raising Cash
If you’re crowdfunding your film primarily to raise money then you’ve probably got your priorities wrong. On the face of it, that might sound counter intuitive, but a panel at VIFF Industry, an adjunct event of the Vancouver International Film Festival, was at pains to point out that in a dash for cash you risk doing nothing more than a glorified online form of “panhandling”.
The first event in the four-day VIFF Industry, held yesterday at the Vancity Theatre, was entitled “Power to the Indie: Best Practices: Marketing & Engagement in a Connected World”. Naturally, crowdfunding was one of the key areas of discussion, looking at how this relatively new but popular (as a show of hands indicated) form of financing is evolving and how strategies are becoming more sophisticated.
A key point was that crowdfunding should be viewed as an opportunity to discover and engage with your audience, and to view the relationship with that audience as one that could last for years.
Among the panelists was Marc Hofstatter, Head of Film at Indiegogo, which as one of the bigger crowdfunding platforms sees 15 million visitors a month.
Indiegogo offers two funding plans for anyone wanting to raise money for a project - “Fixed Funding” and “Flexible Funding”. If a filmmaker hits the funding goal set at the start of crowdfunding campaign under either plan Indiegogo charges 4% (plus fees for credit card and currency transactions). If you don’t hit your goal then under Indiegogo’s Flexible funding plan you keep the money you were pledged but you are charged a more hefty 9% fee by Indiegogo. The Fixed Funding plan - also used by rival crowdfunding platform Kickstarter - uses an all-or-nothing approach: the filmmaker doesn’t get anything for projects that don’t hit their funding goal.
Hofstatter said that the first third of the typical crowdfunding campaign comes from the filmmaker’s inner circle - family and close friends - and suggested that this is one good reason why filmmakers are unlikely to renege on their promises. That said, there was heated discussion about how filmmakers should manage expectations for their campaign, particular when using the flexible funding model.
Emily Best, CEO/Founder, Seed&Spark, said anyone planning a crowdfunding campaign needs to make sure you can still do what you promised your backers, even if you raise only $2,000 of a $20,000 campaign goal.
Best is lined up to do another crowdfunding workshop on Saturday at VIFF Industry’s “Totally Indie Day”. It was interesting to note that Seed&Spark is a platform that marries both crowdfunding and digital distribution.
There were useful tips and insights into strategies from all the panel members. Sara Kiener, Co-Founder, Film Presence talked about a project where they realised mid-campaign that they weren’t connecting with enough of their fanbase in one town so they hired a theatre for a special screening and sold all the tickets to the screening as campaign prizes.
Best talked about how, having identified that their core audience in one campaign was from three different cities, they introduced an element of competition by saying that the premiere of the film would take place in the city that pooled the most money.
As the founder and CEO of “film accelerator” CineCoup, J. Joly, had a fairly unique take on how to take advantage of internet technologies. CineCoup run a competition where film projects across Canada compete for C$1 million financing and guaranteed release in the Cineplex Theatre chain. It's a wired age studio where over a hundred filmmakers advance through “a fan engagement funnel” to get their project to the final funding prize. “We’re a launchpad not a destination,” said Joly. He said the aim is to get filmmakers straight to market and “put some jingle in their jeans.”
For Joly, the CineCoup model is about finding the cheapest way for audience discovery, whether that be fans, superfans, lurkers, or the whale in the casino. The CineCoup team pores over huge amounts of data in their decision making process. Tech is a big part of its model. But he added that filmmakers shouldn’t underestimate the human touch for engaging people in a project (“We have a lot of parties”). With the winner of the 2013 competition, werewolf action comedy Wolfcop, they went out of their way to get the furry lead character out there to create buzz among its target audience, from booths at fan conventions to having the film's lupine star jump out of a plane as a publicity stunt.
Much of the discussion around crowdfunding stressed the importance of market research, good promotional materials (especially campaign videos), desirable prizes, knowing where your target audience hangs out online (Reddit or Twitter?), timing of campaigns, and how vital data mining is in the crowdfunding space.
Perhaps the most heated discussion turned on whether crowdfunding models should allow filmmakers to sell equity in their film. Current models only allow prizes.
The panelists seem to agree that there were serious legal and ethical issues to face with an equity model. A big problem is that most films don’t make money, in which case the equity would be worthless.
Marc Schiller, CEO/Founder of BOND Strategy and Influence, citing the potential for lawsuits, said it would be "a disaster".
“We sell credits. We sell executive producer credits,” he said. “End of story.”
Marc Hofstatter said while Indiegogo likes the idea of equity crowdfunding, they are not going to add it if it means “a kneecapping for our filmmakers or funders.”