Why Aren’t Feature Films Crowdfunded?

Saturday, August 18th, 2012 at 7:30am
  • 15 Comments
 
Why Aren’t Feature Films Crowdfunded?  

Reading the news that Terry Gilliam has finally secured funding for a new feature after three years of trying got me asking the most obvious of questions: Why don’t more big-name filmmakers use crowdfunding methods like Kickstarter?

Gilliam, whose movies include the wonderful – but not necessarily commercially successful enough to be considered “hits” – Twelve Monkeys, Brazil, The Imaginarium of Doctor Parnassus and, a favorite of this parish, The Brothers Grimm, has described the process of finding funding to make his movies as being “in this eternal waiting room” leading to a “dull throb” of existence. Considering the quality of work that he produces, that’s a sad thing to read, but is it something that’s even necessary in today’s world of Kickstarter and IndieGoGo and countless options for artists to go directly to fans and say, “Hey, wanna help me out here?”

Small movies and short films have used crowdsourcing methods to become funded in the past, but to the best of my knowledge, no-one’s yet used the increasingly-popular process to fund a full-length feature. Is there a particular reason for that? Well, maybe; I can think of one potential bump in the road off the top of my head – The scale of the whole thing. Let’s look at The Imaginarium of Doctor Parnassus, for example; that film was relatively “low budget” by movie standards, but it still cost $30 million to produce. That’s a lot of money; more than three times the record amount a Kickstarter has ever raised, to put it in some kind of context. That’s not to say that someone with Gilliam’s track record couldn’t raise that kind of money, in time – After all, the $7.8 million Kickstarter record as it currently stands is more than double the previous amount of just a few months earlier, so it’s not as if people aren’t apparently getting more comfortable pledging large sums towards projects they want to see succeed – just to point out the scope of what would wait ahead.

(As USA Today points out, larger scale crowd funding is about to happen anyway, with corporations opening themselves up to the process starting next year.)

There are other concerns, too. What if the movie went over budget? Would there have to be an additional amount raised in the initial crowdfunding to cover that? What about taxes and the like – Would Gilliam or whatever moviemaker attempted this have to factor that into the initial figure, or just hope that they could cover the amount themselves (Spoiler: Unless they were rich, they probably couldn’t)? Would the investors get a say in decisions regarding the movie’s production or release schedule?

Also: If the movie made profit – and, surely, everyone would want it to be successful – then who would see those profits? Would everyone receive a share equivalent to their initial investment? If so, imagine the logistical nightmare that would be, working that out and keeping track of the many, many people who’d require reimbursement. And if not – if there was some kind of agreement that all profits would stay with Gilliam or go into some trust for future projects – doesn’t that open up the possibility of a lawsuit from an aggrieved investors who decide after the fact that they want a piece of the pie? (Then again, it’s a Gilliam movie; the odds of it becoming a massive success to the level that that would happen are minimal, sadly.)

And one final question: Even with all of these problems, does that make the entire prospect less enticing than the familiar dull throb?

Gilliam may not be likely to crowd source the money he needs for future projects anytime soon, but the potential is there, and it has to only be a matter of time before a full-scale, released-in-theaters, crowdfunded motion picture actually happens, and we get the answers to all of these questions as well as finding out if movie-making can become a more democratic process as a result – and whether that’s a good thing or not.

Tags: ,
  • Deanjsimons

    my instinctive answer to the question is: because the studios would squeeze them out and you’d have to crowdfund the militant marketing campaigns that are put behind feature films thanks to the entrenched mechanics of the industry.

    Plus crowdfunding is relatively new (in its current iteration) and is still finding its feet (as Mr McMillan has to some degree suggested). All these questions of return on investment etc. are still seeking secure answers. Plus there’s the fact that only massively popular filmmakers will get alot of funding. This has been shown with videogame kickstarter campaigns where cult followings bring the money (target plus oodles extra) but little knowners barely scrape their target if they’re lucky.

    I’ve come across many low budget films that are incredible (Memory Lane being one of them) but unless you can have the money to successfully market it you are dependent on the extremely limited word-of-mouth to get interest in funding and seeing it.

  • ahlhelm

    Wait, Spinoff likes The Brothers Grimm? I… I… yeah, that was probably the worst Gilliam film ever. 

  • MRMIRACLE

    What might be possible is for crowdfunding to function as a downpayment against studio funding for projects that big name filmmakers want to do, but can’t get greenlit.  If the filmmaker can get X% of his projected budget, the studio will commit.  Otherwise, better luck next time.

    As for what gets done with the profits, the equity of the crowdfunding could be tied to a specific charity or cause.  Once expenses (including the creator’s cut) are paid, whatever profits remain are allocated to the Cause and any other investors in proportion to the % of $ they put in.  Cause-based equity ownership might also help small, less well-known filmmakers access this kind of funding.

    Of course, monitoring this kind of thing for fraud would be horrific; God help the IRS and Interstate Commerce Commission if this thing ever became standard practice.  Further, if the project turned out to be a winner, the studios (if involved) would go wild looking for ways to divert funds to themselves before the equity returns were distributed.

    One real problem with it is how you get the faceless crowds excited enough about a project to cough change without giving away some of its dramatic muscle.  A film like the Avengers or Sense and Sensibility would have no problem with that (and also wouldn’t need to resort to this).  But how do you energize the masses about something new that relies on a twist ending (i.e. The Sting or the The Usual Suspects) without risking some of the elements the film is relying on for an audience payoff.  The kind of filmmakers that could pull off crowdfunding solely on the strength of their reputations are the kind that don’t need crowdfunding in the first place.

  • JohnZee

    The system is rigid and far more inflexible than people think.  Even if you could go after the necessary funds to hire the production crew, bring in talented-enough actors, and pay for all the various other costs including for equipment and other misc. things, all you would have would be a completed movie.

    Which means absolutely nothing in today’s world.  
    You’re not going to have the capability of properly marketing and promoting a feature length film, cause if you did you wouldn’t be scrambling around to pay for the production costs utilizing crowdfunding.  Even if somehow you did have everything in place to properly market and promote your film, in all likelihood the monetary expense of doing so is going to be roughly at least half of what your total production costs were.Even if you do have the capability to properly market and promote your film along with the resources to pay for that particular cost, your capability to distribute your completed film is going to be roughly the equivalent of the level of distribution that your grandmother can get if she decides to self-publish that book of recipes she’s been working on since the late 80′s.Not going to be in theaters, not going to get anything remotely resembling proper film distribution cause of two reasons.  One, again if you had the capability to properly distribute a feature film you would not be busting your butt to cover the production, marketing, and promotion costs.  Two even if you did have such capability distribution wise, do you really think your capability is going to be even a fraction of what a mult-BILLION dollar feature film distribution company that’s been in business since the 1930′s-1950′s is going to be able to much more easily accomplish?And this doesn’t even get into the fact that 95% of all Entertainment news outlets online or otherwise are all firmly in the clutches of a handful of major studios.  Which effectively means that unless you are working with them in some way that puts cash in their pocket, ALL they have to do is limit your capability to get the word out about your film.  Something ridiculously easy for them to accomplish that would leave you with less than 5% of the fringe media outlets to work with with. Entertainment news media outlets that more than likely the majority of average film viewers probably don’t even know exist.Now if you’re a film maker with an already established fan base like Terry Gilliam, Luc Besson, or Robert Rodriguez you’re going to have a slightly easier time compensating for all of these various issues than the average Independent feature film maker.  But if you don’t somewhere along the way play nice with the big guys major studio wise, the best you will ever accomplish with your film will be considerably less than what the Foot Firmly in Mouth modern day version of Kevin Smith could accomplish.It is a nearly insurmountable, impossibly tall order to accomplish even if you do have something of a fan base built in.  And without the fan base you can probably go ahead and remove the word ‘nearly’ from the previous sentence.Now there is a slight slimmer of hope.  You could possibly submit your completed feature film to a couple of film festivals and similar competition oriented arenas in the hopes of getting noticed by a company that does have all of those capabilities.  But do so with the full understanding that in such competitions and film festivals, your chance of your film standing out enough to make an impression to anyone that could possibly help you compensate for your own readily apparent inadequacies is far more akin to getting hit by three different lightning bolts at the same time…or winning a multi-million dollar lottery off one solitary paid for lottery ticket.And that is why Feature Films are not crowdfunded.

  • ATK

    My main complaint would be that it would cost someone too much money to track and return my investment of $20.

  • http://blueseraphproductions.com/ Jody

    Graeme, it’s actually a little simpler than that. It’s illegal to crowd-fund a film as an investment. Films are deemed “securities” by the 

  • Andreirector

    Studios are probably reluctant to fund another Gilliam film after the debacle that was his Don Quijote movie, starring Johnny Depp. Watch the documentary on it and you’ll get a totally different perspective on his methods.

  • http://blueseraphproductions.com/ Jody

    Graeme, it’s actually a little simpler than it. It’s illegal to crowd-fund investments in a  profit-sharing feature film through Kickstarter. You run into securities laws — a film is a security, a product to be made at a future date with due to a capital investment — the kind of things the federal Securities and Exchange Commission is charged with monitoring.

    What you are seeing on Kickstarter and Indiegogo are donations. No one is investing. The premium they get back — a poster or a DVD or even a video game  –  is their reward for giving money, nothing more. 

    For small indie films and small short films, it’s “easy” to find people to donate the tens of thousands or even hundreds of thousands of dollars to realize small features. Typically, this money comes from friends and family and their extended network — fans in the video game case.  But still, none of them are receiving a return on their money.

    This is about to change, though. The article you linked to describes a change in the law. Provided there are no delays, in 2013, you will be able to crowdsource investors in a project, including films. You’ll be able to raise up to $1million through a crowd funder that meets whatever rules are being worked out now. That number will go up to $2m if a more stringent set of rules and oversight of the money is met. 

    With luck, this is going to be a boon for small ventures and movie production companies (I’m one!) making it a bit easier to gather the capital needed to make things like a film. For Gilliam, $2m or less in investments probably won’t cover his vision, no matter how small he makes it. For people like me, it allows us the opportunity to access funds and build films that might just launch the Terry Gilliams of tomorrow.

  • Dean

    As said above, until the strangehold major studios have on all aspects of marketing is lifted somehow, ( Like maybe a studio head gets visited by three ghosts and changes his/her mind overnight into a benevolent goodie two shoes ) then crowd funding is still of little use to the film-makers.

    Even if you could raise all the money, you would have no useful method of  distribution and would just end up selling it to a studio and recouping, next to nothing for the investment.

    Unless it was literally a charitable gesture by individuals and they would want to see no profits ( because there would be none ) in that instance I guess it could work.

    Its the distribution channels that ultimately need changing/the buying habits of the general public, kickstarter, would be more effective for niche’ indy projects and even then, only as a form of charity.

  • http://blueseraphproductions.com/ Jody

    Depends on the kind of film. The marketing and technical resources available to turn a profit on a $1m and under movie are easily within the grasp of filmmakers today. (A little easier if you stick to a $500k or less genre pic.) Netflix, iTunes and Amazon allow you to get your product out there and Facebook and Twitter allow you to use a word-of-mouth advertising plan to get your film scene and, possibly, actually get some kind of buzz.

    Having the pockets of a studio is great to finance and distribute movies. Always will be the case. But it’s never been easier — and by that I mean still hard and challenging but not impossible — for lower budgeted producers to get their films made and seen. Making money at it? I’ll you know in a decade.

  • Demoncat4

    besides the logical night mare of what to do should the film make a profit. the studios would come after and try to make sure the film got crowed out . plus the goal to do a full feature that would be set would be hard to meet the way kickstarter works with the time limit it sets. though things like kickstarter would and may the only way that things like gilliums the man who killed Don quixote and del torros at the mountains of madness will ever get made.

  • http://intertainmentinfo.com/ hindi promo songs

    i wanna to get this dallar

  • http://twitter.com/RealGilliamFan TheReal GilliamFan

    @Andreirector Not sure what you mean by “his methods.” Flash floods, Jean Rochefort’s back injury, etc., are not “methods.” They’re freak occurrences…

  • http://twitter.com/ZiggyFakeMcCoy Ziggy Blumenthal

    For the record, the Kickstarter record is $8.6 million for the Ouya video game system, not the Pebble’s 7.8.

  • http://twitter.com/Arthurknight Michael J

    lol.Wait, you were serious.I love Kickstarter because it’s created to help those who don’t exactly have the funds, make their dreams come true.As an artist and a writer this is the best thing that could ever happen for artist like myself who do want to print our creator owned comic books.Plus we get to give something back to those who helped us get where we are.It’s giving back to the fans.What a wonderful concept.

 

Recent Articles

When Music Makes the TV Show  
  •  

When Music Makes the TV Show

Friday, May 24th, 2013
Music, Television
<i>Arrested Development</i> <br />Debuts Four New Clips  
  •  

Arrested Development
Debuts Four New Clips

Friday, May 24th, 2013
Television
Lucy Lawless Hints at New <i>Xena</i>, Warns it Might be Complicated  
  •  

Lucy Lawless Hints at New Xena, Warns it Might be Complicated

Friday, May 24th, 2013
Television
Steven Soderbergh in Talks <br />to Direct Cinemax’s <i>The Knick</i>  
  •  

Steven Soderbergh in Talks
to Direct Cinemax’s The Knick

Friday, May 24th, 2013
Television
Universal Conjures Film Rights <br />to <i>The School For Good and Evil</i>  
  •  

Universal Conjures Film Rights
to The School For Good and Evil

Friday, May 24th, 2013
Movies

Contributors

Kevin Melrose

TJ Dietsch

Terri Schwartz

Katie Calautti

Keri Luna

Anna Pinkert

Kiel Phegley