Hollywood’s Kickstarter Craze Needs To Be Fair To Fans As Well As Filmmakers

After the success of Rob Thomas’ efforts to crowdfund a Veronica Mars movie through Kickstarter, it was inevitable that some other auteur with a significant fanbase would follow his lead. That person is now Zach Braff, who as of this writing has raised about $954,000 out of a $2 million goal to make Wish I Was Here, a movie he’s described as a follow-up to Garden State. Not surprisingly, a lot of people are irked, mostly on the grounds that Braff is rich and could have, in their estimation, funded the project himself. I’m less certain of that, because in my experience, even having a lot of money by normal-person standards doesn’t allow you to fund a string of high-quality Hollywood productions, and I understand the desire to look for a funding base you could go back to time and time again. But I am anxious about the idea that Hollywood projects will start flocking to Kickstarter in droves to get financing for another reason: we’re a long way from making sure that these arrangements will be truly fair to fans who are investing in their dream projects.

Movie projects aren’t the only businesses where crowdfunding is increasingly seen as an attractive alternative to other funding options. As Kylie MacLellan wrote earlier this month, “As banks rein in lending due to tougher capital rules and greater regulatory scrutiny, crowdfunding, which originated in the United States as a way to raise money for creative projects, has expanded rapidly as an alternative source of finance.” But even though President Obama in 2012 signed into law a bill that would pave the way for crowdfunders to get equity in the projects they invest in, the Securities and Exchange Commission has yet to complete writing the rules that would regulate that process. That means there’s still no legal pathway for people who contribute to projects through Kickstarter or through other portals to get equity in said projects, or for the people who set up those projects to give equity to them. There are powerful interests, including venture capital firms, who would prefer not to see crowdfunding become an alternative to them. And apparently the SEC has concerns, including about fraud, that it’s still resolving in its rule-writing process.

Frankly, I can also see a situation in which Hollywood projects would prefer not to be able to offer equity to the people who are willing to pony up to support their projects. It might be irritating to do rewards fulfillment, particularly if a large number of people invest. But Warner Brothers is helping Rob Thomas and the crew of the Veronica Mars movie handle that element of the funding process. And giving out those rewards, even if it takes some manpower, is ultimately cheaper than having to give up a stake in the profits. If a movie project neither has to pay back a large investor, be it an individual or an institution, and is prohibited by law from giving crowdfunded donors equity in the movie, then the people making that movie will get to keep more of the profits from it, and will get to the stage where they can make profits much more quickly. In other words, crowdfunding may let audiences support projects they’re enthusiastic about. But they also eliminate the need to pay anyone back.Given the demonstrated power of fan enthusiasm to gin up enormous amounts of money — though Braff’s project appears to be getting funded somewhat more slowly than the Veronica Mars movie did — that’s a relatively desirable state of affairs for filmmakers to preserve. None of this is to say that Thomas or Braff are deliberately exploiting fans to fund projects that might have been able to find other backers. In the case of the Veronica Mars movie, it certainly seems plausible that there’s no other way the film ever could have gotten the financing to go into production. Braff, by contrast, has written “I was about to sign a typical financing deal in order to get the money to make ‘Wish I Was Here,’ my follow up to ‘Garden State.’ It would have involved making a lot of sacrifices I think would have ultimately hurt the film,” a statement that you’ll assess in different ways depending on how much you care about Braff and the purity of his vision. My concern is that we’ll hit a point where studios and creators with even larger fanbases turn to those fans to get financing for films that could have been funded for conventional means solely as a way to boost their own profit margins.

I totally understand that people are excited to pony up for projects that they’re tremendously excited to see go from fantasies to reality. But I hope that as much as fan bases are advocates for creators and series that they’re invested in, that fans remember to advocate for themselves in this process too. Just because you’re willing to give someone a ton of money, or even a little money, to make their movie doesn’t mean that what you get in return is actually a fair trade. It’s terrific to win creative freedom for talented people, but if fans want to upset the corporate business model that drives the film industry, they should recognize that this is still a business, and someone is still making money off of their investments. And if fans goal is to buy that creative freedom for their favorite artists over and over again, it’ll be much more sustainable for them to do that if they’re getting some return on their crowdfunding investments.