The #OscarsSoWhite campaign has highlighted a truth about Hollywood, one that likely shouldn’t come as a surprise to much of anyone. Namely, that Hollywood has a lot of money and power concentrated in the hands of a small minority of film executives, and their own biases have migrated into the films that they decide to greenlight. The industry as a whole is massively overrepresented by a specific demographic (old, white men), and it’s led to the development of an unhealthy imbalance that simply doesn’t represent the nation as a whole, or moviegoers in particular.
Of course, this goes beyond a desire for equality or fairness. The old belief that white, male protagonists produce better box office results has been demonstrated to be entirely wrongheaded. In fact, today, film audiences actually feature a higher proportion of people of color and women than the population at large.
From a business perspective, this clearly represents an opportunity. The studios are clearly slow to react to this reality, meaning those filmmakers bringing more diverse stories and casts to the silver screen could have a chance to succeed where their macro counterparts are failing.
But how do you get around a system built on entrenched power? When getting funding for films requires winning over predominantly white executives, how do you get the chance to make the movies that your audience so desperately wants?
Well, major changes in laws dictating how crowdfunding can be deployed have led to a new tactic and opportunity: go straight to the people.
Equity Crowdfunding Takes the Egalitarian Approach to Filmmaking
The worlds of film and crowdfunding have been intertwined since crowdfunding began. Among the first Kickstarter campaigns that really captured the public attention was the efforts by fans of Veronica Mars the television show. Mars fans showed up huge, helping filmmakers raise $5.7 million for Veronica Mars the movie.
It shined a light on some really intriguing possibilities for how films could be financed, a crowdfunded future where filmgoers take part in the process, and filmmakers can feel out the market by crowdfunding their budget. Instead of allowing a handful of rich and powerful producers to continue setting the slate for production, independent filmmakers can go straight to the source, allowing consumers to dictate what they wanted to watch.
Of course, there were some real flaws to the crowdfunding model. Most notable was the way that Kickstarter or Indiegogo didn’t allow for any sort of repayment of funds. Limited by the Securities Act of 1933, the best donors could hope for was some knick-knacks, a T-shirt, maybe even a free copy of the DVD, but none of the potential profit the film might generate. This started coming under increased scrutiny after notable wealthy person Zach Braff opted to turn to Kickstarter to fund one of his own films.
Now though, Title III of the Jobs Act has created a new opportunity: equity crowdfunding. Instead of raising nearly $6 million for a movie from people who don’t stand any chance of seeing a penny of the profits it creates, films can offer up fair terms for investors, allowing them to really be a participant in projects that they believe in. Instead of crowdfunding being, arguably, just another way to squeeze a buck from moviegoers, crowdfunding’s potential to truly revolutionize the film industry has come to fruition.
Where are the Crowdfunded Filmmaking Opportunities?
Equity crowdfunding is still in its very early stages, but there are already signs that it could become a major player in the world of indie film financing. There are several major crowdfunding sites featuring a number of films seeking to raise money, as well as a few sites focused specifically on the film industry. There’s a long way to go, and a lot of opportunities are still limited to accredited investors, as doing so removes a lot of expensive legal requirements, but this current environment certainly has the potential to grow into something that could permanently alter the entertainment business landscape.
Here's a look at some of the places where prospective investors can browse film projects looking for financial backing:
Slated.com may be one of the more intriguing options out there from a purely filmmaking perspective. More than simply a list of projects, Slated uses analytics to identify which projects have the strongest portfolio of factors. Also, most people in the industry would tell you that networking and building relationships is key, so the platform’s emphasis on connecting talent to other talent and to financiers is promising. The site only caters to accredited investors for now, limiting public participation, but it still appears to be providing a blueprint for the future.
The first steps into a new model are likely to be tentative, and Junction appears to fill that role. The platform focuses on accredited investors and existing film financiers, allowing wealthy backers to put funds into projects that have already received partial funding from real players. The company was acquired by crowdfunding platform Seedrs in October of 2014.
FilmFunder describes itself as “Kickstarter meets E-trade for film investment,” a tagline that should indicate that it’s a bit more consumer-facing than the high-end Slated or Junction. The company appears to be offering up a catch-all, with everything from equity crowdfunded projects to limited offering for a handful of wealthy backers. The site claims to research each project to ensure it meets their criteria for an investable project.
IndieCrowdfunder claims to offer Hollywood professionals with access to a large and comprehensive base of potential investors. It also features a “Equity Concierge®” which aids any project in navigating the tricky waters of the various different approaches to crowdfunding contained in the JOBS Act.
Seed & Spark
Seed & Spark is a creator/filmmaker-centric platform that gives creative people a chance to fundraise and then display their work. The site includes a lot of films that can be watched online, and its mission statement appears to be focused on giving talented individuals a chance to grow and thrive.
Does Crowdfunding Hold the Key to a More Diverse Hollywood?
It’s far too early to know if these upstart platforms will ever really reach their true disruptive potential and remake the film industry as we know it, particularly with big budget franchises still dominating the national consciousness. However, within their design is the model for something different. As audiences and critics continue to raise voices of protest against the status quo, it’s not hard to imagine a future where decentralized control and consumer-facing investment platforms remake the nature of the entertainment industry.
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