May 10, 2013

Kickstarter + Hollywood = Everyone Wins: Why Zach Braff and 'Veronica Mars' Are Good for Indies

kickstarter-logo4Hollywood likes Kickstarter now, and it was only a matter of time before we started seeing projects from some of our favorite filmmakers show up on the crowdfunding website. There have been many opinions thrown around about whether or not these projects should be on the site given that many of these filmmakers should be able to find money elsewhere, and poor indie filmmakers don't really have much of a choice. Many have talked about Kickstarter being a zero sum game, that Hollywood stars are taking good money away from projects that really need it. Well, turns out the numbers don't support that in any way, and both Zach Braff and Kickstarter have responded to explain the situation, and give some hard numbers.

At this point, Braff's Kickstarter for Wish I Was Here has earned about $2.5 million, well exceeding its $2 million dollar goal. Check out this interview Braff did with the filmmakers for Kickstarted, a new documentary about the boom in crowdfunding:

Zach Braff also did a great interview with KCRW, and he explains how difficult it's been trying to make a film since Garden State, and why Kickstarter was almost a last resort for making his second feature film (the interview with Braff begins at 7:26):

What Did We Learn?

The clips above are chock-full of great tidbits, but here are some of the bigger points I think have been lost in the noise:

  • The budget for the film will be between 5 and 6 million dollars.
  • They will be doing some foreign pre-sales.
  • Braff is putting plenty of his own money into the project (He doesn't give a number, but I imagine it's at least $1 million).
  • Kickstarter had their highest traffic day ever when Braff's project launched.
  • He's been building and interacting with his community for years.
  • Zach Braff reads and responds to comments (maybe he'll even read this post).

A huge chunk of the money raised will go to Kickstarter fees and fulfillment costs, something very few take into consideration. There is no question it's a lot of money -- I'm sure many of us could make 100 movies with that money -- but Braff wanted to make a project that was personal to him and he's been thwarted at almost every turn trying to get other films funded in the studio system.

Another point that has been brought up is how much Zach Braff is personally worth. Regardless of how much money he has made during his career, he's not doing this to make money, and it's clear that he doesn't have enough on hand to make this film without any outside help (in fact, in all likelihood, it will lose money -- and really, from a risk management point of view, putting every last dollar you have into a film isn't always the best idea). Judging by his frustration in the KCRW interview, I imagine he would have funded his own film long ago if he thought he could do it justice with his own money.

It also should be noted that even though crowdinvesting is technically legal (Braff mentions that it is not), it is not yet allowed. Until the SEC finishes writing their new rules, we'll have to settle for the way things currently are in the United States, even though smaller projects have been able to allow equity funding in other countries for some time now.

Hollywood Helps Kickstarter (and Us)

This brings us to the next point, that Kickstarter and people like Braff are taking money away from indies. It sounds good, in theory, but the reality couldn't actually be further from the truth. Kickstarter recently wrote a blog post detailing exactly what projects like Veronica Mars and Wish I Was Here are doing for the crowdfunding site. Here is a great quote from that post:

The Veronica Mars and Zach Braff projects have brought tens of thousands of new people to Kickstarter. 63% of those people had never backed a project before. Thousands of them have since gone on to back other projects, with more than $400,000 pledged to 2,200 projects so far. Nearly 40% of that has gone to other film projects.

We’ve seen this happen before. Last year we wrote a post called Blockbuster Effects that detailed the same phenomenon in the Games and Comics categories. Two big projects brought tons of new people to Kickstarter who went on to back more than 1,000 other projects in the following weeks, pledging more than $1 million. Projects bring new backers to other projects. That supports our mission too.

Consider the above for a moment. Those that donated to Braff's campaign have gone on to pledge money to an additional 2,200 projects totaling more than $400,000 (with close to $160,000 going just to other movies). This is not a zero sum game. I think it's important to reiterate that, because if we want to create some sort of sustainable future for filmmakers, we have to understand that the more people who know about and trust Kickstarter, the better.

They mention in the post that over 1 million people have donated to at least one campaign. That's certainly impressive, but it's a drop in the bucket compared to the number of people who could be donating on Kickstarter. That means there are still millions of potential backers out there who may be interested in projects, but maybe don't know about the site or haven't had a reason to go. These big names are helping bring in a new audience, and the numbers show it.

Kickstarter Stopped Being Just for Small Projects Long Ago

Back in October we covered Goon, a Kickstarter campaign that David Fincher was lending his name to. That animated project wasn't even for a full-length movie -- merely a chance for the filmmakers to fund a pitch reel for investors (and they raised over $400,000). I tend to agree with some of the criticisms regarding that project, but I also mentioned that Kickstarter could give us a chance to see films we might never have seen otherwise (even though I'd prefer they fund the entire film on the website):

Hollywood is getting less and less risky with their projects, and one way they may actually be using a site like Kickstarter down the road is not necessarily to fund the projects themselves, but raise just enough money to get the project off the ground, and in the process, let the donators serve as a test audience. If the campaign is successful, it proves to financiers that there is enough demand to fund on a larger scale.

Even if you personally disagree with these projects, once campaigns for things like the Pebble watch started being funded for millions of dollars, any attempt at singling out a project for not belonging to Kickstarter "because it's not indie enough" kind of gets thrown out the window. It's far easier getting a product funded by investors than a film, so if we're going to go down that road, where does it end? Should we only allow art-based projects under $10,000 where nobody gets paid? Should we limit the site to only people who make a certain amount of money? The questions are endless, and they are all nonsense, because people vote with their wallets. If they want something, why should we stop them from having it just because we're not personally benefitting from a project?

No one who buys into anything on Kickstarter is able to reap any additional financial benefits for donating. That's just the way it is, and while that's going to change in the US, Kickstarter has already said they won't get into crowdinvesting, so the site will always be a donation-based platform. Kickstarter may have begun as a way for smaller projects to find money they couldn't get elsewhere, but it's become a much more diverse platform, and as the stats above show, the more attention brought to the site, the more money there is available for all sorts of projects -- benefitting everyone in the long run.

Why Didn't No Film School Actually Post the Campaigns for Veronica Mars or Wish I Was Here?

Simply put: they don't need our help. While we covered Goon, that was more to bring up a larger point about how Hollywood had started to use Kickstarter. Both Veronica Mars and Braff's campaign have been covered by every site imaginable, and were funded in a matter of hours. We try to stay indie-focused here as much as possible, and while that certainly carries many different definitions, I think it's important to lend our hand to much smaller projects that could actually use our help getting over the hump, while at the same time providing useful information. That's also why we don't really share campaigns for films that aren't also accompanied with a guest post or an interview -- something beyond just a pitch for money.

We certainly could reach out to both Rob Thomas and Zach Braff, but it would only be to try to give you some knowledge you haven't already gleaned from anywhere else on the internet.

Why This Matters

I certainly understand some of the jealousy and negative feelings toward "people with money" coming to Kickstarter. I've stretched every dollar with my own films, and I shot a feature for less than $3,000. When I see a project being funded for millions, it does hurt a little to think of how many films I could try to make with that money. But those aren't my campaigns, and it's not my money to spend (and it's likely not yours, either, unless you're Braff or Thomas reading this post). Those campaigns are funded because people want them to be funded. At least for the creative projects, they've built and fostered communities of people who want more of some thing, and if Kickstarter didn't exist, they may not get it. In my view, what sense does it make putting artificial barriers on a system that is intended to be open? Going down that path doesn't lead anywhere productive.

So many of us complain about Hollywood and the way movies are continually dumbed-down, but then when projects come along on Kickstarter that are actually anti-Hollywood in many ways, we question whether they are taking advantage of us and whether they belong on the site. This matters because film is mostly a commercial product, whether we like it or not, and if we want to continue making small movies that probably won't turn a profit, and can only be funded from the kindness of strangers, we need projects like Braff's that not only continue the spirit of independent filmmaking in Hollywood, but also bring along a whole new group of people who care about what we're doing.

As Hollywood searches for ways to make their films less risky and more profitable, we need independent film to stay strong and continue to make projects that move us and challenge us. The only way we're going to do that is by increasing the potential pool for donators or investors, and if people like Zach Braff can attract new people with his own personal projects, I say bring it on.

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What do you guys think? Did you fund either campaign? Do you think a major studio would be able to fund something on Kickstarter for 10s of millions, or would there be backlash as Braff mentions? Let's have a healthy debate about this in the comments!

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18 Comments

Joe, first of all, the clarity of your writing never ceases to amaze me. I love the thought that you put into your articles. Koo did a great thing bringing you on board.

Second, thanks for setting me straight. I wouldn't call myself a Braff-hater, but let's say I was a little ticked off when I read about his campaign. I definitely felt that same "what-the-hell-I-could-make-400-features-with-that-kind-of-money" feeling, and I think I got a little carried away.

While Matthew Inman's campaign to build a Goddamn Tesla Museum presumably had the same effect, by bringing the Indiegogo platform to his fans' attention, it was also easier to get behind, because it wasn't a film / "our competition". I think I'll just suck it up and congratulate Braff on his success and be thankful that, in effect, he isn't stealing our precious crowdfunding dollars.

May 10, 2013

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Gabriel

Thank you for the kind words, I really appreciate it. :)

May 10, 2013

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Joe Marine
Editor-at-Large
Shooter/Writer/Director

Bring it on indeed.

May 10, 2013

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Micah Van Hove
Writer
writer, director, dp

While I do believe what kicsktarter blogged about in terms of this bringing in new funders is true, it seems like a pretty huge conflict of interest for them to suggest that it's a good thing. They should just say they can't comment b/c the more money projects like Braff's make the more money they make.

May 10, 2013

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People now are giving money to major corporations and millionaires. Say it to yourself a couple of times and see if you aren't disgusted. All the numbers Kickstarter is throwing out could be bogus for all we know. They don't want to lose their trendiness factor or eyeballs to their site with bad press after all. The fact is Kickstarter went down the wrong road no matter how hard they try to spin it.

May 10, 2013

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SAraB

Agree Kickstarter needs to do some tweaking to the tv and production dept befor hollywood comes sucking up money.

Last night on SHARK TANK there were two fools that showed up wanting 5 million dollars for a movie with no trailer, no script, no actors on board no nothing, i feel the same way about the movie mention above as examples.

May 11, 2013

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jay clout

Both of these projects are a joke from the staind point that Zach the greedy hollywood fool that he is already made a nice profit from a previous kickstarter project and in return came back asking for more money, with a campaign that looked like he spent exactly no more than $85 for promoting.

The same goes from veronica mars, campagin, video trailer , graphics spent on the site are a joke, the real reason why these projects did numbers was because of the fan base of the shows that they were previously on. I just think its an insult when to the other kickstarters that actually need the money, who do not have connections and hollywood ties such as these leeches.

Ive seen food products with goals of less than $12,000 whose trailers, website, promotion etc that makes look like motion pictures compared to the trash these two are offering, no decent pilot trailer no nothing just begging

May 11, 2013

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NoWhiteInMyCup

I think thats a fair point, and well said, that lower funded indies are putting in some great production values (me! me! me!) into the effort whereas the larger, widely know celebs like the recent Braff project doesn't hold the same kind of aesthetic. Although Im pleased that Braff and for a lesser extent Hollywood as the machine are looking towards crowdfunding as a viable option - and good on them for bring attention to it - , what it does show is that to turn over a dollar on Kickstarter you first need the community en mass to follow - and a case in point is what Koo did with Manchild. I recently did a funder on the Australian Pozible crowd funding site and raised $1000 of my $4000 target after putting in a massive unpaid effort but managed to collect a small band of financiers afterwards who are now financing the DVD release of my first feature film www.51 Paintings.com. Its chicken feed in comparison to some of the more larger projects we now see on crowd funded sites but the point is, no community no backing success. So maybe look at the Braff campaign as a learning tool for us lesser known, hard working folk and incorporate the idea that to get the success of reaching a funding target ($200 - $2mil etc) it must reach out to an audience that will put their hand in their pockets. Really interesting test case this Braff project (but again, if an unknown struggling campaign can make a campaign video look like Hollywood itself its a good idea for the established folk to get off their arse and pay a bit more attention to pitch videos! Sorry Zac, I absolutely, positively love your work no end but please jazz it up a bit next time!)

May 14, 2013

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shaun

May 14, 2013

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shaun

Here's my beef with Braff:

Most indie filmmakers know that their little films are not going to be profitable. I mean, sure, they'd love to make a profit... but if it's a short, or an experimental film, or a feature with no stars and no direct line to Sundance... they need Kickstarter. Because no professional production company or distributor would bother talking to them about pre-sales, co-financing, or anything like that. These films are basically non-profits, only without the official status.

Braff, on the other hand, is VERY likely to sell his finished film to a notable distro, like his old buddies Fox Searchlight or the Weinsteins, and could make a ton of money - unless his film is unwatchable. (It might be, but who knows? He says he wrote the script last summer - right after he bought a 2,600 square foot Manhattan apartment and completely remodeled it, by the way - so he's had less than a year to shop his film around.)

The $2 mil he asked for (and got) from donors is a third of his production budget, if it will indeed be a $6 mil film. That $2 mil frees up a full third of the film's financial ownership, which Braff will likely take for himself. So he gets a much bigger piece of the pie if and when he sells his film - all thanks to fan money that he never has to pay back. (I'm using the $2 mil figure in the event that the extra $500K he's raised all goes into reward fulfillment and Kickstarter's cut, which it won't.)

And Braff's entire justification for asking for this fan money instead of getting actual investments from professional financiers? He wants to retain final cut and total casting approval.

Yes, every filmmaker wants this, but this is Zach Braff we're talking about, not Shane Carruth. How edgy and experimental do you actually think his movie's going to be? Do you really believe his final cut would differ that much from any foreign distros' who might fund the film? Or do you imagine there would be a huge gulf between the cast Braff wants vs. the cast foreign distros might want? Braff wants you to think so, but I'm skeptical. And who knows, these companies might even have better taste than him. After all, his original title for "Garden State" was "Large's Ark."

I acknowledge that the dude has a right to ask for money and people have a right to give it to him. My issue with this has nothing to do with Braff's personal wealth or his commitment to co-funding his film himself. But it DOES have to do with the marketability of this picture, which is much, much higher than anything else on Kickstarter. Except for Veronica Mars, of course. :)

May 11, 2013

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jrose

If this movie is released wide theatrically, which it seems will be the case, it probably won't turn a profit, or a very small one. He's going to have to work with distributors, who play all sorts of games with money, but here's the situation:

Let's say final budget is $6 million. At the moment he's collected 2.5 million. Let's say he gets to $3 million in funding on there, which is possible, and fees and fulfillment costs bring it back down to $2.5 million. That's 3.5 million he needs to make the money back invested in the film.

Let's say they spend $10 million on P&A because it's a smaller movie and he's going to do a lot of grassroots advertising. We're now at $13.5 million for the principle.

That means the movie would have to gross $27 million to break even. We don't actually know the P&A number, but if it gets a decent release, I would be surprised if they spend a lot less than that considering Garden State did over 800 theaters with a $2.5 million dollar budget. While that movie did $35 million dollars including overseas, that was also in 2004 when movies were in theaters longer and Netflix streaming and other ways of getting movies didn't exist.

Of course it will make money in other ways, like DVD/Blu-Ray, VOD, iTunes, etc., but keeping those out of the discussion for the moment, Zach will likely lose money making this film. This is the reality of the theatrical model. It's a loss leader for the most part, and that's why the system is broken, because secondary markets don't make what they used to.

Anyway, this is not necessarily to defend his decision to go to Kickstarter, simply to show that this movie will probably break even at the very best.

May 12, 2013

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Joe Marine
Editor-at-Large
Shooter/Writer/Director

Joe, respect good stuff you wrote! indie film industry growing beautifully.

May 12, 2013

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Respectably, Joe, your counterargument lost its validity the moment you you put all the ancillary markets "out of the discussion for the moment."

You know that cable/VOD/DVD sales make up an enormous amount of a film's total revenue these days. They should never be kept out of the discussion. Otherwise, it's the same as arguing, "Let's focus only on potential sales to Afghanistan, Bangladesh and Paraguay. Because by this criterion, Zach Braff is certain to lose his shirt."

In any event, look at Sundance 2013 sales and you'll see that distros are still forking out big piles of cash for high profile indies: The Way, Way Back: $9.5 mil. Don John's Addiction: $4 mil. Austenland: $4 mil. And these are just for North American rights - maybe theatrical only, maybe theatrical and ancillary, I'm not sure.

Also, Braff obviously won't have to raise one penny for P&A. That's up to the distros, after they pay him for his movie. So let's take that out of the equation.

With a solid $2 mil in free Kickstarter money now in his pocket - I don't think he's going to raise an extra $500K in the next few days, as his campaign plateaued after $2.5 mil - Braff now needs to raise $3-4 million more to finish his movie and take it to market. Who honestly knows how much of this budget he will raise from foreign pre-sales? Braff has kept mum about this, which I think is intentional, so that his fans can imagine he's ready to kick in $3 mil of his own dough, when really he may be expecting to raise the entire balance from pre-sales, and not have to pitch in anything himself. I'm sure that's what he's hoping for, just like any filmmaker would.

Anyway, let's say Braff pre-sells all the foreign rights to his film for $2 mil. Frankly, $2 mil would only cover all the European markets. There would be a lot more money coming in from other territories once his film is finished, but let's say $2 for the whole world just for the sake of argument.

That means with $2 mil in free money, and $2 mil guaranteed from foreign pre-sales, if the film costs $6 mil total, then Braff only needs to sell US rights - both theatrical AND ancillary - for $2 mil to break even on his own personal investment. He will almost certainly sell it for more, especially when you include all the ancillary markets. Unless of course his film is totally unsellable. Which I doubt. Braff's too savvy and commercially-minded for that.

Finally, keep in mind that Braff will surely pre-arrange significant back end points for himself as writer, director, and star. Add all his various SAG, DGA, and WGA salary minimums, which cannot be deferred because his film's budget is too high for that, as well as all the residuals he will see later on from all three guilds, and it's hard to deny that, unless he actually does kick in $1 mil or more of his own dough AND he cannot pull off any major sales, Zach Braff is going to come out of this film a richer man. And thousands of fans donated money to make that happen.

Again, he's within his rights to do this. And if this really does lead to more Kickstarter donations for struggling indies, then awesome. But I think he's being somewhat disingenuous, and I can't help but find distasteful the idea of free donations funding such likely profitable enterprises. Imagine McDonald's starting a Kickstarter campaign, saying "If we raise $5 million from Shamrock Shake fans, then we can buy the materials to make and sell Shamrock Shakes year-round!" That's an extreme, but it's the same concept. Yeah, McDonald's MIGHT lose money trying to sell Shamrock Shakes year-round, but let's be serious.

May 12, 2013

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jrose

This is really cool, super excited about this and love that the Director of the film can have all the creative control doing it this way. Very cool Kickstarter video as well! :)

May 12, 2013

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Trevor

All he did was game the system to build hype so he could sell the rights for more; that was always his intention and defending him/kickstarter is bs, as jrose alluded to in his comment: it was purely business and never about "fans"; unlike the veronica mars project, which I think really needed the push. http://www.hollywoodreporter.com/news/cannes-zach-braffs-kickstarter-fil...

May 16, 2013

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Krys

Joe, question for you directly...

Would you mind contacting Rob Thomas and/or Zach Braff to ask what has not been asked/published...

-How much marketing $$$ was spent?
-How big was the team?
-How many Tweets, Posts, Emails were sent to generate the needed traffic for backing the campaign?

From one professional to another, thank you for your due diligence.

~B

May 16, 2013

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Brian B

So let me get this straight; many of you are complaining that an individual put a movie idea on Kickstarter, got it funded by people who liked it or him and now can make his movie. Why are you mad? Because it wasn't you? He has a huge fan base (1,100,527 followers on Twitter) and, from what I've seen, a small fraction of that contributed.

He didn't "game the system". He posted a project, he put the word out, people contributed, he got funded. Stop having sour grapes because you either: a, have never run a KS campaign or b, didn't have a compelling enough idea for someone to fund you or c, have fans that trust you to give them what they want. He has a rep with the people who like him that carries weight. If you don't have that, your KS page and video had best explain why someone should hand over $10 or $20 to *you* instead of another project.

I enjoy his stuff but didn't contribute. Why? Because I have already funded 2 successful campaigns in the last 2 months and his was already fully funded. I almost did, though and still might at the $10 level. The idea of the production diary and a copy of the script seem pretty cool to me.

May 16, 2013

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what really concerns me about Braff-gate and (to a lesser extent Veronica Mars) is not so much the projects themselves--I actually like Zach Braff and absolutely agree that his fans supporting him are not going to take away from anyone else's money--but more the door that this kicks open. the great and terrible hollywood machine has notoriously sat back and let the indie artists flounder around any new technology or platform until it proves to be a viable revenue stream and then swoops in and buys it; effectively locking out the indie artists (see S, VH) who made it all possible.

It is not a stretch...to see crowdfunding as a legitimate CORPORATE finance tool, built from the beginning as part of the marketing costs or whathaveyou...especially in this day when Hollywood seems less and less likely to finance movies anymore any way. It's the ultimate bet-hedger; oh, let's just raise the actual shooting costs for the next Will Smith movie by kickstarting it and if it fails to reach its goal, it's probably not worth making. It's a perfect focus group research for the price of a cool video. Do you want to see Lethal Weapon 6? Give us ten bucks.

and once this happens...it's not tooooooooooo much of a stretch to see the machine just purchasing the tool. I don't know the kickstarter folks, but I could hazard a guess that if Warner Bros or Sony wanted to BUY kickstarter, there's probably a big enough check for that. and once it's a fully owned and operated subsidiary of the Disney, do you think your little movie about that summer that changed your life is going to get in? (I'll give you a hint, why don't you go to your local AMC theater and ask if you can screen your film there). They'll just close the door and that will be that. Oh sure, some other crowdfunding sites will pop up to work with indie folk again but we all know that by that time, crowdfunding will be ubiquitous and therefore useless as a viable means. Instead we'll have thousands of Indiegogo jr's around that will just exist to suck money out of film makers (oh for OUR crowdfunding you have have pay us 50 bucks in advance and that's non-refundable). They'll be the film festivals of the next era.

once again, this is all doomsday postulating on my part, and I'm not and uber "stick it to the man" kinda guy; but still if you're an executive with the script for the new Star Wars film on your desk or if you're Johnny Depp being asked to scrap some of his back end to shave off 100 mil from the Lone Ranger...and here's a website where you could get people to give you money in exchange for a video from the set every once in a while... you wouldn't think about making sure the dude from MGM CAN'T do the same thing? You wouldn't want to OWN that...first?

So Veronica Mars and Zach...not really the problem...but they just might be the cracks that bring the whole thing down...

May 17, 2013

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