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Why Kickstarter is a No-Win Situation for Independent Filmmakers

Most of the anti-Kickstarter arguments have already been made, but no one has pulled everything together quite as well as Josh MacPhee in this piece about the economics of Kickstarter. It’s a must-read for any artist thinking of running their own crowdfunding campaign. If you think using Kickstarter is the heaven-sent solution for independent artists, this article may make you reconsider.

  • An interesting article. I’m currently doing a Kickstarter project right now. It’s major work and as someone who rather just be creating, this begging for money for business is not much fun. You should definitely factor in the cost of Kickstarter, Amazon, & your rewards when you come up with your budget. It’s not an ideal platform but should you succeed, it is more money than you had to do your project. But if you’re going to do one, be prepared to work non-stop publicizing it.

  • An okay enough read, but nothing anyone planning to use Kickstarter shouldn’t all ready know. Your fees and costs and taxes, should always be factored into the sum you shooting for. I guess I’d say, take doing a Kickstarter campaign as serious as any other business endevor.

    The whole Amazon and Kickstarter taking their 10% should not be shocking or something to grouse about. This isn’t a non-profit thing. You’re paying for their “draw” of bringing in pledges/visitors to a well know/trusted site, plus a system they’ve developed for you, the creator, to fund and publicize you project. No different than eBay/Paypal (except I think they take around 17% (a least when I sell there), Amazon Marketplace and so on.
    It can sting (sort of like taxes), but none of us had the foresight to create something like Kickstarter. Nor get the clout from something the scale of Amazon.

    • Laughing Hyena

      Sounds like you got a low rating on ebay. One of the things I hate about ebay is that if you just get one low rating (Not even a bad one): It sticks to your record forever and increases the % ebay takes out of you. Which means, sometimes you end up paying more than 17% to ebay.
      You need 5 star ratings on EVERYTHING according to ebay.
      And if you get three bad scores in a row from some buyer that likes to cause a ruckus over simple fixable things? Ebay can ban/kick you out.
      It’s no surprise to me that ebay has a lot of auction site competitors.

      However, I totally agree you your point. None of these websites are in the public-sector and how is it any different from displaying artwork in a physical store you shop from? All of them charge artists to display their work on their walls and do take a cut from the final selling price.

      If one store has a higher % rate, you need to shop around to find one at a lower % rate. If you can’t fine one, then you’re stuck at that % rate.

      • My 17% is combining eBay and Paypal fees (I see them as one entity, since you pretty much need to use Paypal to sell on eBay nowdays). Other than that, been on there 13 years and a “power seller” for what that’s worth for me:). Can sting a bit, when I see those fees. But then again, I sure can’t draw in bulk visitors on my own.

        Totally agree on second part. I Just got paid for selling a couple of pieces from a show last month and found the gallery had up their take to 30% of the sales. But hey, they’re supplying the space, the promotion, their name recognition and brokering of any sales.

  • Look, at the end of the day I look at it like this… if you could do it without their help you already would have. It’s worth it no matter how much of a cut they take. If you can’t actually have the foresight to budget your project correctly taking into account all the cuts taken out that the article bitches about then maybe you have no business accepting someone’s money for your project because at it’s heart you are predisposed to fail because you haven’t schooled yourself the right way to do it. And it’s NOT easy and one of the reasons I haven’t done one myself. That said poor planning does not diminish the possibilities and potential of Kickstarter. Poor planning just points to the fact that you’re a just that; a poor planner. They have a technical term for this in business. It’s called bankruptcy.

  • Ted

    Kickstarter isn’t a virtual begging bowl, it’s just an alternative way to raise capital. People who go into it thinking it’s a magical free money machine are doomed to failure from the start. The opportunities it offers far outweigh the “downside” of the percentage that Kickstarter takes, especially considering how big a bite a producers in Hollywood take! The other considerations of mailing prizes, and organizing your campaign…that’s called a JOB. Welcome to real life hippie artists!
    As someone who is planning a Kickstarter campaign in the near future, I’m expecting a lot of hard work. But at least that hard work will belong to me, which is pretty rare in the animation game.

  • Brian Duffy

    There’s a reason this article ends with “There’s got to be a better, more collectivist way to do this. I’m no expert, so I have no idea how that would actually work, but it’s a nice idea! Then those fat cats wouldn’t be able to trick me into working for their fascist pyramid scheme!”

    Give me a break. Let me go point by point why this article is complete BS.

    Costs? OK, guess what. Making things is difficult. Once you’ve made something, it’s difficult to tell other people about what you’ve made. Once you’ve told them and they want the thing, getting it to them is difficult. Yes, yes, “damn the fat cats and power to the proletariat” and so on, but you have to realize something. All 3 of these things will always be difficult regardless of what kind of socio-economic paradigm they’re passed through. A communistic Kickstarter will require no less headaches. 10% off the top to make the whole damned process go smoothly? Sounds good to me. Probably better than organizing weekly General Assemblies on Skype to build consensus among all 30,000 members of the People’s Democratic Crowdfunding Co-Op! Let me put the demonic, capitalist operating costs into my budget on day one like a responsible adult instead, maybe?

    Making creative people get in front of camera to say hello to their fans and ask them for help? How dare you turn beautiful artistic flowers into cynical glossy brands! Good grief! Wether you’re asking great-uncle Bob for a fat check, a public board of directors for a grant, or the random public for kickstarter funds…guess what? You’re going to have to dress nice and be eloquent and likable in communicating not only the value of your idea, but your value as someone capable of realizing that idea. When has this ever not been the case for creative people?

    Turning your precious community into grey-suited commodity slaves? Spiritually taxing your network beyond repair? Kickstarter is turning our friends into customers? Holy moly. First of all, I have maybe ~150 real-life friends. Usually kickstarters need more than 150 backers. Strangers giving money to cool projects does not equal Kickstarter cynically exploiting the ties that bind us. Tim Schafer says he wants to make an adventure game, but he can only do it with my help. I pay 20 bucks, and I get an adventure game made by Tim Schafer. COME AND SEE THE VIOLENCE INHERENT IN THE SYSTEM! HELP! HELP! I’M BEING REPRESSED! Moving on.

    Celebrities taking over? These people don’t need our money?! You’re actually buying into the art-school-freshman fantasy of “creative people who are more successful than me live in a magical land where they have unlimited money and no problems or difficulties in making projects happen”. This is so embarrassingly wrong it isn’t even worth rebutting.

    Kickstarter hasn’t taken our souls away. It’s just a tool. It can be used, it can be misused. I’m as resentful of the role money plays in constricting the true glory of being human as anyone, but Kickstarter did not invent money, nor did it invent the idea of “asking friends to give me money so that I can make some art instead of waiting talbes”.

    So, to summarize…

    Money makes you nervous and depressed, and you wish there was a better way to power creativity.

    You’re afraid your friends will leave you if their generosity requires them to spend 5 minutes using *gasp* a slick and highly capable middleman!

    You find it morally offensive that a “faceless corporation” has grown to a point where they can efficiently handle thousands of projects with millions of transactions a week. You say it’s insulting to our human dignity that they’ve made the funding process shockingly simple, they’ve given every project a chance at worldwide exposure at the push of a button and *GASP* they’re asking for a nominal fee! This appalls you for some strange reason.

    And again, you wish that Kickstarter wasn’t taking a simple and reasonable 10% cut to support its infrastructure and professional staff of 46 full-time workers. You wish it could work like your favorite bakery co-op down the street.

    “Hey guys, the servers crashed last night, but our volunteer staff has to work their day-job over the weekend so they won’t be able to take a look until late on Monday. But hey! We’re collectively owned, which means that 10% goes to us now! Or rather, that 10% gets split up so every one of us gets .016 cents instead. But we screwed up the payment system that one time last month so we’re actually still in debt. Power to the people!”

    Oh wait, you admit that you have no actual ideas or expertise on how a crowd-funded co-op would actually operate. Remind me again why you decided to write this article?

    • GW

      I have a lot to say in response about just what happened in Soviet Russia, where the studios didn’t depend on profit. The first thing to note is that there was less films produced by almost an order of magnitude but in spite of that, from about the 50’s to the 1980’s there were still arguably more good animated feature films made in the USSR than in the US. That should tell you right off the bat that capitalism was, referring only to animated films, a system that produced utter wasteful garbage.

      This is only looking at the best, however. Many of their animations were propagandistic, and many were just poor moralistic message films. But you need to understand that Soviet Russia didn’t require you to get thousand’s of people’s approval. Your idea isn’t necessarily Socialistic or Communistic. It’s direct democracy. They didn’t give everybody an equal chance to get started, but those directors who did work had carte blanche as long as they didn’t do anything that was too critical of Communism. Capitalism and Communism have both had their own forms of censorship. In the Soviet Union it was upfront, but in the US it’s always been economics. I should point out that Japan, which is in a rut lately, is a system in which Capitalism led to better results than in the US. It’s largely due to the cooperation of different studios. But that’s a long story.

      I agree that Kickstarter and Indiegogo are getting a needlessly bad rap. They’re the best thing to happen for animation in quite a while, I think. Though there is one point that the article is right about: Kickstarter has hidden their failures from search engines and they ought to be displayed for all to see.

      • Nick

        “…from about the 50′s to the 1980′s there were still arguably more good animated feature films made in the USSR than in the US.”

        Name 1. I’ve seen several from that period and I don’t see any evidence for this statement.

        And we didn’t have a very capitalistic system then (not that we do now either but it’s closer in many ways), it was a protectionist one where government restrictions and censorship largely dictated what could or couldn’t be widely released both in television and film. When some of these restrictions were removed in the Regan years we had way better results. Freedom to contract always leads to the best overall results, but it does mean you have to exercise caution and forethought because reality deals you limited resources and frauds exist.

        • GW

          I’d had a whole list of films but my internet wigged out and dropped the tab. After noting the films, I found that all of those decades except the 70’s were debatable. The two films I’d most recommend are The Key and Laughter and Grief by the White Sea.

          If you want to get technical, the USSR didn’t exercise true communism any more than the US exercised true capitalism.

          I don’t know what you’re referring to in ‘freedom to contract’. You’ll have to explain this and some of the other restrictions on film and television. I only know of block booking and The Hays Code.

  • I think too much attention is put on the big projects and the little ones are ignored. I have a positive opinion of Kickstarter because my experience with them was positive. I decided to do an animated project at the beginning of this year (a Star Trek parody I could sell at conventions.) I had a hard deadline for the convention and realized I was going to need money to replicate DVDs. I started a small KS campaign asking for $600. I posted on my Facebook page, website and Twitter and in just over 24 hours, I’d met my goal. By the end of the month, it reached $2,200. Not big money, but money I really needed to complete my project. I used the extra to make more DVDs. Besides the financial help, the KS campaign also created an audience for my project that helped inspire me to finish it on time. I went from nothing at the start of the year to having DVDs for sale at a comic book convention in May …and Kickstarter definitely helped make that possible.

    • GW

      What are some small projects that have been overlooked? I’d like to see a few. If I like some I’ll give them a shout out on my blog.

      • If you look under “Featured” in the right sidebar on the Discover page, you’ll see “Small Projects.” These are projects asking for $1K or less.

  • ShouldBeWorkin’

    Good article.
    I dunno. Kickstarter reminds me of the power of televangelism brought to the artist.
    Good luck to those using it.

  • First of all, thanks for letting me know The Baffler is back in production! I really missed its witty critiques of management theory and the culture industry in the 90s.

    It should be noted that charges just 4% if you meet your goal: You’ll see that if you don’t make your goal under one plan, you keep the dough, but at 9%.

    This week, I’ve started editing a pitch video for an indiegogo campaign, though it’s a research trip for a book I’ve already signed to do (unrelated to animation). I’ll keep the donor perks simple, like things that can be sent in a business-sized envelope, a private email list of my adventures on the trip, emailed photos, PDFs of the book before its released, etc. Only the top tier will receive shipped merchandise–matted photos, a signed book, etc.

    The reason for keeping it simple is that I’m a one-man show with lots of research-heavy writing to do. Packing stuff and standing in line at the post office would be an awful waste of time.

    My overall feeling is that Kickstarter is better for famous names, tech products and startups, while indiegogo is more of an artist’s realm.

  • I posted a pertinent and well argued comment in this article dissecting the content of the link. I made no direct allusion to my own current campaign except a sign off to say that I had one and that people might find value in looking for it, meanhwile I see another comment that fully describes its campaign.
    A no-win situation for artists?

  • I dunno. 10% for a shiny soap box from where to stand up & ask for money does seem kinda excessive.

  • Mike

    That anti-kickstarter article is the worst! Clearly the author has zero concept of the cost of doing business and the value of the business model. Not making enough? Set higher goals! Seriously if kickstarter is so evil and worthless then go ahead and make your own platform. Good luck with that!