Is it unfair for famous people to use Kickstarter?
CROWDFUNDING has been touted as a mechanism for artists and other creators without access to ready cash, big donors or bank loans to obtain modest to immoderate sums of money designated for specific projects. Of the nearly 95,000 projects completed at Kickstarter, 41,000 of them reached their goal and thus received funds (before fees) of $517m as of May 14th. Most projects are modest in scope, with 90% receiving less than $20,000. Some outliers, such as the Pebble watch, have raised millions, but even Kickstarter’s larger sums are typically raised by those with niche audiences or compelling new products. Recently, however, true celebrities have jumped in. Rob Thomas, the creator of the « Veronica Mars » series, raised a tidy $5.7m to shoot a feature-length film with its original cast; Warner Brothers owns the programme’s rights and will distribute the film. Actor Zach Braff has raised more than $2.6m so far for an independent film he will produce. This has prompted an online backlash as to whether such high-profile uses constitute an abuse of crowdfunding’s tradition of helping the little guy. One columnist admonished readers, « Stop Giving Your Money to Rich People on Kickstarter« . Such critics say celebrities will capture a disproportionate share of crowdfunding, driving out the lesser known and proving Clay Shirky’s power-law distribution curve all over again. Is it unfair for famous people to use Kickstarter?
Reward-based crowdfunding, the kind in which Kickstarter, Indiegogo and several more specialist sites engage, promises no return on investment. Rather, a donor is a « backer » who expects to receive a specific reward, usually based on the sum committed. Each campaign on these sites is disconnected from all others (except those by the same creator), and functions almost as a limited-term company with a dedicated purpose. The sites do not provide marketing tools to reach existing registered users. Rather, project creators must find their audiences and bring them to the campaign through direct appeals, press coverage and social networking. A dance troupe with an e-mail list of 1,000 previous attendees seeking to raise $5,000 for an upcoming performance has to use the same tools as a moviemaker seeking 100,000 donors to raise $5m for production costs. So when it comes to attracting attention to a crowdfunding project, being famous can help enormously.
That said, big names actually seem to work as rainmakers for the concept of crowdfunding in general, which benefits other projects. It is not a zero-sum game. The amount pledged on Kickstarter alone grew from $28m in 2010 to $320m in 2012, of which about 85% wound up with successful projects. In a blog post about the current kerfuffle, « Who is Kickstarter for? », the site’s founders say that 63% of the « Veronica Mars » campaign’s donors had never pledged funds to a Kickstarter project before, and « thousands » of the film’s more than 100,000 backers went on to contribute a total of $400,000 to 2,200 other projects. A similar effect was observed in March 2012 months after a videogame project’s massive windfall; having got a taste for crowdfunding, the game’s backers also supported other projects. Kickstarter’s user base is measured in hundreds of thousands, not hundreds of millions. Like a rising tide, each project launched by a famous artist lifts not only his or her mega-yacht, but other boats too.
Crowdfunding was initially thought to be a fad, and critics and supporters alike continue to worry that enthusiasm for the idea will either plateau or collapse. But according to Kickstarter’s current figures, the amount being pledged is more than doubling each year. Only about 600 projects on Kickstarter have raised $100,000 or more. Most bring in less than $10,000. Famous people who use Kickstarter are not stealing crumbs from the lesser known—they are making the whole pie bigger.