On Crowdsourcing Film Finance

by markversus

Today I got into a Twitter exchange about the benefits of various crowdsourcing techniques for financing a short film with a director named Danny Lacey.  I had seen at least a couple of retweets regarding the short film he is planning to make (called Love Like Hers), and which he is fundraising for via the web.  I saw that he had already raised £3,500 of the £10k he has budgeted the production at (I have made this assumption and will discuss it further later) and I added a small amount of my own, doing so on little more than a cursory look at the information on the film’s site and Danny’s own blog at dannylaceyfilm.blogspot.com (where he is documenting the process). That and the retweets.

Having donated to the film I was drawn to think about some of the methods Danny is employing in this crowdfunded model and whether or not it is actually as innovative as is claimed on those sites.  Read back that sentence sounds like the opening to an episode of The Cook Report, so I do want to stress at this point that I am extremely impressed with the amount of money raised to date, gave my money willingly, and hope that a more direct involvement of the crowd in low-budget film-making is encouraged by Danny’s actions.  I do, however, feel that the topic deserves and requires discussion and exploration so that the model can be improved upon and, hopefully, developed into a more sustainable method of low budget film finance.

My major concern with the model and its claim of innovation was that I as far as I could see there are not many ways in which it varies from existing financing models (other than in scope).  Most film financing endeavours of any scale generally work along the lines of ‘give me money to make my film and I will give you [riches beyond your wildest dreams/a DVD] in return’.  Whether the reward is a tax break or a walk-on part in the movie it is the same process.  That the process in this instance is being marketed openly via the internet is only as a result of the film’slow  budget, with most open investment structures (like an EIS structure) undertaken by seasoned investors being subject to massive FSA restrictions on who you are or are not allowed to pitch investment to.  The point being that this kind of investment in film goes on on a daily basis, and as such cannot be called innovative.  It is called Capitalism. Another point to make would be that in the cases further up the budgetary food chain it is not uncommon to see the investors receive some stake in the film by way of equity.  People are keen to share in success.  Danny’s structure does not offer such equity. Rather, in each case, it boils down to the exchange of goods or services for money.  This is not a criticism (an equity stake in a short film is unlikely to yield returns) but rather an observation.

If it is the medium (the INternet) that is meant to be the innovation then I would direct anyone who cared to ask towards Kickstarter or Flattr, both of which have been doing stellar work in the area of crowdsourced funding.  Kickstarter often works in the ways described above, with various rewards for various levels of investment. A current downside is that it is, unfortunately for us Brits, very UScentric, and Flattr working in quite a novel though less direct manner.  I would probably point them towards AD Lane’s (who I note is also a contributor to Danny’s film) Indywood Project who have been spamming my Twitter feed every day since May 2009 with their crowdsourced film financing. I can’t say I am a fan of the genre, but they are up to £20K themselves.

Is there an example of an innovative attempt at crowdsourcing finance? Try looking at the CoProducer project set up by YouGov CEO Stephen Shakespeare.  Shakespeare attempted to raise finance and generate content for a film by enlisting thousands of members of the public from the pool that YouGov polled to agree to complete surveys both on the film  as well as commercial surveys (used as the fundraising tool) in exchange for producer credits and a share in the film’s success.  The cost in cash terms to the investor was nothing but their investment both in time and interest was great.  What evidence is there that it was innovative? It appears to have been a massive failure.  YouGov’s site has no mention of the project and the domain has been removed (a BBC article from 2008 on the project can be seen here).  Nothing tried and tested can really be classed as innovative.

My second concern with Danny Lacey’s model is that it does not really take advantage of that at which the the crowd excels – namely, being a crowd.  The goal of the campaign may be fundraising but it doesn’t necessarily have to be the focus.  Building interest in the project, fostering investment in Danny and the film (beyond financial investment because, let’s face it, the returns are not great) and creating a energy and momentum around the project will have their own value and will, albeit eventually and indirectly, bear financial fruit.

As an example there are, I can surmise, a number of people who follow Danny’s Twitter account and blog and youtube channel that have not given, nor will they give and nor should they be expected to give.  There value however is that they are (in purely statistical terms) proportionately the number of people required to generate the number of existing contributors.  By equal token there exists a large number of people who would contribute to the film but who do not even know it exists.  Simplifying (drastically) the maths of Danny’s current progress and taking his Twitter followers as a rough indication of the films footprint on the Internet you could estimate the following:-

  • It takes 200o followers to create 100 contributors;
  • He has raised £3500 those contributors making an average donation of £35;
  • With each contributor donating the average £35 it requires another 185 contributors to meet his target;
  • 3700 Twitter followers are required to yield 185 contributors.

The maths is laughable, but the principal is sound. The more people that know about the project the more will contribute.  The focus should be to push awareness about the project up and the metric above, clumsy though they may be, could help.  The more reason you give the crowd to make noise about the project the more noise they will make.  Encourage them not to donate (which costs them money) but to promote (which costs them nothing) and to do so on something that they care about because they have watched it grow and want to see it succeed.  Those who want and are able to contribute financially will do so. I myself am an example of that.

Love Like Hers has some movement in that direction.  Danny’s video diaries offer aninsight into the world of film-making for those who don’t have it.  It offers them an opportunity to fell and get involved.  But I beg Danny openly, as I did on Twitter, not to limit the effect of that movement.  Release the song and music video for free. Stick it on the front page of your site, your blog, your Youtube channel and tweet the hell out of it.  Let people talk about it, recommend it, and then retweet the hell out of it.  Let it be part of the identity of the film.  If it is good and you are proud of it then it will be the best possible promotion that your project could have.  Once people have seen it, invite people to donate for it – same price or otherwise – and see what happens.  If it is not good, then for God’s sake don’t charge people for it sight unseen. That is just crooked.  What should be reasonably clear is that those people who were buying the song or video up until now were not buying it for the song or the video (there is a good chance that they have neither heard or seen it)  they were buying it to become more involved in the process.  Those people will still want that involvement and will donate.  They’ll donate because they will feel a return on their investment.  Everyone else may still want to invest in the film, but will feel just as validated in doing so with their time and their efforts than as if they had paid, and they are just as valuable to have on board.

In respect of the song and video, I will repeat the point made above by repeating something I tweeted to Danny.  Selling something for money is not an innovative way to raise money.  Whether that is a music video, a t-shirt, the novelisation of the script or a seat in the bar in the scene where the lead actor gets shot.  It is the same transaction as buying a bag of crisps. Film-makers need to dig deeper than that if their goal is to reinvent film finance at the low budget level.

I would like to see more attempts at financing arrangements like that of “The Lives of the Saints” by Rankin and Chris Cottam where the entire budget was fronted by a clothing line with the only proviso being that the cast and crew used some of that resource to create an advert for the brand.  In the age of viral marketing, having an entire movie to supplement your ad campaign has got to seem inviting.  Where are the business providing a match making service between brands and film-makers. There are worse ways to spend £100K on marketing.

I would also encourage film-makers to share ideas allowing for the packaging of similar projects together, sharing cast and crew costs topping and tailing production periods or dovetailing production schedules to reduce location costs.  Where is the forum saying “Anyone got a film that can shoot in the summer that is set in a country house? Because I do.”?

Distribution is an area of film-making that has been smashed apart by the internet and by digital recording and presentation technologies.  Where are the film-makers looking to find new licensing opportunities for their films directly with alternative distribution channels? (There is a whole post about the film-maker being more involved in distribution here.)

There is room for exploration and experimentation in film finance, but as an area it suffers because it is rarely viewed as anyone’s goal at this level.  The film-maker wants to make their film by any means necessary and so is more predisposed towards innovation in production – making it better for less.  There are surprisingly few micro-budget producers out there which makes it hard to look beyond “If a million people gave just £1 each…”.

On a slightly different note, there are a number of ways I would like to see the crowd involved in the production process, with the open sourcing of documentation (asking for improvements on budget and schedule), crowd casting (like Shaun of the Dead), collaborative storytelling and others, but they are for another post and, I am willing to bet, already out there somewhere.

I wish Danny the best of luck with Love Like Her, irrespective of whether or not this post gives that impression, and look forward to seeing it, and I hope more film-makers are encouraged by Danny to try their own methods of raising finance.  You can contribute to the film here.