Crowdfunding has become an intriguing new source of funds for all manner of creatives in recent years: musicians, filmmakers, artists and TV producers included. A panel gathered at MIPCOM this morning to discuss how producers can best tap into online communities to raise money for their projects.
The panel was moderated by Pat Ferns, president and executive producer at Canadian firm Ferns Productions. It included (left to right): Slava Rubin, founder and CEO of IndieGoGo; Barbara Tonelli, acquisition director and co-founder of Touscoprod; and Peter Wintonick, international producer at Canadian firms Eyesteelfilm and Necessary Illusions.
“These are people who are really expert in the business: the techniques and how it works,” said Ferns as an introduction, before handing over to Wintonick. “Why does MIPCOM need to talk about crowdfunding with all the money floating about in those buildings down there?” asked Wintonick. “Maybe it’s an illusion…”
“Let us assume that the old political economy – the old way of funding films, media and television shows isn’t working so well,” said Wintonick. “At least for documentary makers, we’ve grown dependent on the largesse of public systems of finance,” he added. “This is all a bit in crisis.”
Hence the interest in crowdfunding from producers making documentaries in particular, but also other genres. And he moved on to talk about wider trends of “greenroots thinking and grassroots funding” along with “fair-trade media“.
For Wintonick, the key is “how one targets communities of concern: people with a vested interest in your projects. This is really the golden ring,” he said. “You’re really working on a direct one-to-one – even though it’s through a computer – solicitation.” He also said that while there are a number of sites helping producers to do this, some people have gone it alone, including filmmaker Franny Armstrong, who raised £1.5 million, Robert Greenwald, Jamie King and Michael Moore.
Wintonick had some advice on the key elements when designing a good crowdfunding campaign. “You really have to do as a producer a lot of work,” he said. “It seems simple: there’s a lot of hype and mirrors about it. But it’s a lot of work… A lot of it really depends on the work of the producer.”
He handed over to Slava Rubin from IndieGoGo, to explain how producers can go about funding their film using his company’s service.
IndieGoGo distributes millions of dollars every month in numerous countries. People give to crowdfunding campaigns because they believe in the company or cause; because they want the perk; because they want to be part of a group or something bigger than themselves; and finally, for profit. Rubin warned that in the US it’s “practically illegal” to solicit crowdfunding donations and pay out a profit in return, due to financial regulations.
He stressed that it’s about much more than films and music. “People are funding funerals, people are funding in-vitro fertilisation,” he said. “We are about to have the first crowd-funded baby!”
So why use crowdfunding? “The least important thing you get from a crowdfunding campaign is the money,” he said. Because these campaigns allow you to gauge demand and mitigate risk; test your marketing; get customer data; and of course there’s the money. “Instead of transactions, you want to move into a world of relationships.”
And the key: An honest and engaging pitch, be pro-active, and find an audience that cares. For the first of those, a video campaign raises 122% more money than non-video campaigns – and that’s not a trailer – it has to be a “personal and engaging pitch… a trailer is the equivalent of selling. People do not just sell on IndieGoGo.”
Picking the right timescale for your IndieGoGo campaign is key too: Rubin said that campaigns with a deadline of between 30 and 70 days work best, and he added that producers must put a lot of thought into the perks they offer to people investing in their project. Also updates: telling people about progress on the project: “If you do 13 or more updates, you’ll raise 65% more money than if you do five or less updates,” he said.
The most successful tools for an IndieGoGo campaign? Email, Facebook and Twitter, but there are large gaps between their effectiveness. “Email destroys Facebook. Facebook destroys Twitter.”
But finding an audience that cares is the crucial point, according to Rubin. Once a project is 30-40% funded, it’s much easier to get strangers to fund it – so finding an audience that cares enough to fund before that point is important, to get over that 30% barrier.
Onto Touscoprod’s Barbara Tonelli. The French company launched in January 2009, and now has 15,000 members on its website, and has co-financed 19 projects for a total of 600,000 Euros in funding. “We work only with independent producers and distributors,” she said. “We can only take two projects per month, because we do all the marketing for these projects, and we do all the animation as we call that – we go looking for people on the blogs, the forums and the social networks.”
Next week Touscoprod is launching a new version of its platform, opening up to all projects rather than just choosing two a month. Internet users will be able to finance films through donations, with a range of rewards on offer chosen by the producer. And the new Touscoprod will include a video-on-demand option, so producers will be able to offer VOD versions of their films to subscribers through the site.
“The idea is to be able to give something immediately to the subscribers,” said Tonelli. “When you promise a DVD or goodies, frequently you have to wait until the end of raising the money… The VOD gives something material immediately to the user.” The platform will be in French next week, and English by the end of October, with more European languages supported by the end of 2011.
How does IndieGoGo deal with the money donated if a fundraising target isn’t reached? “You get to choose if you want fixed funding or flexible funding,” said Rubin. In the former case, the money goes back to the donators, and in the latter case, the producer still gets their money. But they must be honest with their funders about their plans in this case. “The key is communication and relationship. It’s transparency.”
What about going for larger budget films – 4 million Euros, say? “The maximum we have raised today is 80,000 Euros on one film,” said Tonelli, while admitting that the Touscoprod community was quite small at the time. “It depends how you work your community… and I think also the kind of engagement.”
“I have no doubt – zero – that people will be raising millions of dollars per movie in a few years,” added Rubin.