Crowd Funding – What a Concept!

I’m still trying to decide if I like the idea of crowd funding. I can’t argue, it’s an attractive concept, especially for an author. With the current money crunch in publishing, and consequently lower advances in publishing contracts, it is great for an author to be able to get money to support their writing directly from fans before the book is written. And not only authors are benefiting from this popular wave of money generation. Independent films, cult video series, audio and written documentaries, fashion designers, artists, game designers, music, performance art, comics and even students aiming to fund their college tuition have all benefited from crowd funding.

If you are not familiar with the concept, crowd funding is a (relatively) new method by which pledges are solicited from fans, supporters, subscribers or even family members and friends, for a work that has not yet been produced. Pledgers promising anywhere from one to a thousand dollars receive “gifts” of anything from a public thank you, to signed promotional items, to front row seats. This is not small change. A recent crowd funding campaign by Neil Gaiman yielded pledged support for his US tour (this was a stage performance art tour, not a book tour) to the tune of $200,000. A very nice melody indeed, and Kudos to Neil for getting that much support!

But that’s part of my problem with the concept. For those who are famous, the process works very wonderfully; for those who are not, it does not work so well. Those of us who have clawed our way up from anonymity know that fans are wonderful people, but they also have limited resources. Crowd funding is above and beyond royalties, ticket sales, etc. that an artist earns, and that money has to come from somewhere. What fans shell out to fund a project will not be spent on another author’s product. There is an argument that they would attend that concert, buy that book or CD, or download that video anyway, so the money is simply shifted forward in time, but these pledges often range upward of hundreds of dollars, well above the price of tickets, books, etc., so there is, indeed, a draw on the “fan dollar” that was not there before.

Crowd-funding sites also face skepticism over their revenue model, where the basic principle is to take a percentage of money collected. Kickstarter puts an all-or-nothing twist on taking their cut; groups that don’t hit their goal before the deadline receive no funding and donors’ credit cards don’t get charged. IndieGoGo allows users to keep whatever they raise but charges a higher commission of nine percent if the total falls short of the goal, while successful campaigns are charged 4 percent. GiveForward takes a flat seven percent, which they state covers their processing fees. The fan’s dollar is supporting these business, which did not exist prior to the concept.
Don’t get me wrong; if I had the “star status” of Neil Gaiman, I’d be all over this trend like ugly on an armadillo, but I might not feel good about it in the end. Stupid conscience… So, given the opportunity, and a sufficient popularity, I might delve into crowd funding myself, but there would always be the question in my mind as to how many budding authors I was taking money from.

I would love to hear some feedback on this subject, so feel free to chime in!


Comments

Crowd Funding – What a Concept! — 2 Comments

  1. My first thought was go with your gut. As you said, crowd funding goes beyond what is “earned”. But it’s simply the newest vehicle for fund raising which is already practiced in a variety of ways. It gives the smaller projects a fighting chance by giving them exposure they would otherwise never get. If someone feels you are worth supporting, let them. They either expect to benefit from your success in some way or sympathize with your cause. I like the Kickstarter concept, if the goal is not met the donor is not charged. This ensures the funds go toward a project that has a fighting chance. Or, you can always do what the kids do for their sports teams, stand at the supermarket exit with a can in your hand.

    • Thanks for the comment, Linda!

      I think I like the Kickstarter concept best, too, but if the goal is not met, I think the person who set up the campaign just set his or her goal too high… this is a good means of getting feedback as well as funding.

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