If you haven’t yet heard of crowdsourcing… just wait, you’ll hear it somewhere, soon enough (most likely this post if you keep reading). If you’re not yet familiar, let me give you the brief rundown.
Crowdsourcing is the act of engaging the public at large to help a person or organization perform a task that it would otherwise normally do itself.
Still confused? Fair enough.
Basically, imagine that you’re friends with everyone and you have the to power to ask them for a favor and they do it. Sounds awesome, right? It can be. Not only that, it’s actually finding a legitimate purpose in many fields these days. The power of the internet is allowing like-minded people to get behind ideas they’re passionate about like never before. Two companies that are on the front lines of this revolution are Kickstarter and IndieGoGo.
Here at Copper Pot we’ve been watching this closely and are about to embark on our first crowdsourcing endeavor. In our industry, the independent film business, money to produce films is and probably always will be, hard to come by. The numbers are not in our favor. Most indies don’t make money. While the digital revolution has helped to lower production costs, that, in turn, has flooded the market with content making finding the right distribution difficult at times. For our next feature, I AM BIG BIRD, we’ve decided to supplement our “normal” financing with a crowdsourcing effort. We came to the conclusion that not only could this be a great way to secure some additional capital, but it’ll also be a unique way to start engaging with our audience before we’re even done with the movie. The marketing and financial upside seemed too great to ignore so we started weighing our options.
Enter Kickstarter and IndieGoGo. These two companies are tailor-made to help independent creators raise money for their projects. Choosing which company is best for your project is not an easy task. First of all, here’s a comparison of some of the basic features:
- If the campaign is successful, they take 5% of money raised and a third party payment processor takes an additional 3-5% depending on amount raised.
- They utilize an All-Or-Nothing funding method, requiring a project to reach its funding goal in order to receive funds. They feel this protects backers and creators alike.
- They require project creators to offer rewards to the backers of the project. Typically, the more compelling the rewards, the more funded a project becomes.
- Kickstarter has gained a great reputation in the independent film community and has helped to raise more than $45 million dollars for film projects, many of which have gone onto great success (including three films which made the Oscar documentary shortlist).
- If the campaign reaches its goal, they take 4% of money raised and a third party payment processor takes an additional “about” 3% (the “about” terminology is taken from IndieGoGo’s website; one can assume that the more money raised, the higher that 3% can be).
- If the campaign does not reach its goal, they take 9% of money raised and the project is still subject to the third party fee.
- They allow the creator to determine whether or not they want to utilize an all-or-nothing funding method. They call the all-or-nothing method Fixed Funding and if the project is not successful, all donations are returned and no fees are charged.
- IndieGoGo allows the creator to apply for a fiscal sponsor, which allows the donations to be tax deductible.
- They don’t require the creator to offer the contributors anything, but do recommend offering perks.
I know, that’s a lot of info and we’ve just started scratching the surface. As we continue this process, we’ll keep you up to date. We’ll choose a site to partner with and let you in on all the work we’re doing to make this a successful effort. You might be tempted to imagine that you can just set up a project for free on either site and wait for the donations to roll in, but trust us… there is a serious amount of work required to get this done right. More to come…