Sites like Kickstarter and Indie GoGo have been offering an avenue for creative people to get a financial boost to start their endeavors. Young and independent artists can now get small projects off the ground based more on the merits of their idea, and less on the ‘who you know’ infrastructure of the creative world.
About a year ago these sites turned a corner as successful game developers who wanted to keep old-fashioned genres alive were able to score huge funding. Essentially starting a Kickstarter explosion that saw a huge influx of independent artists as well as well-known, and likely very wealthy, people looking to spark projects that executives have up to now deemed too risky.
The growing backlash to people like David Fincher asking for 400K from fans has centered around the idea that investing in these large projects that will likely net millions for a studio should be ‘giving back’ to these original funders. Most investments allow the investor a chance to gain profit or at least recoup the investment, but the current legal structure has prohibited sites like Kickstarter from offering a return of investment to the funders. Until now.
The Federal JOBS Act, which was passed earlier this year could have opened the door to a radical change in the crowdsourcing world. Deadline was at a recent Digital Hollywood event in LA where the topic was a big point of discussion:
The new law will allow intermediaries such as crowdsourcing sites to sell members modest equity stakes in films, up to $10,000 or 10% of each user’s income. The project must set a fundraising goal and if it doesn’t raise at least 60% of that, no money would change hands.
This is potentially huge for the independent genre film community. Imagine if you put down $1,000 to help fun Paranormal Activity and in return you had equity in the mega-franchise? Obviously that is an extreme scenario, and in reality you probably only gain equity in the specific film, but still the opportunity for filmmakers to tap into the larger geek community with real investment opportunities could open the door for better projects and richer geeks. Also poorer geeks when the five of us Babylon 5 fans give J. Micheal Straczynski $1M to make a Babylon 5 movie that only we will see.
It will be very interesting to see how this new law shapes the crowdsourcing landscape. Stay tuned to The Flickcast for any new developments as they happen.