Kickstarter: Financing Small Movies Online

Steve Taylor's first feature, The Second Chance, was a drama about an encounter between two pastors. It cost $1.2 million to make, was sold to Sony Pictures (SNE) for $1.5 million in 2006, took in a respectable $500,000 at the box office, and had a profitable afterlife on DVD. Taylor figured his next project, an adaptation of Christian writer Donald Miller's best-selling memoir, Blue Like Jazz, would be an easy sell. He spent four years pitching investors, and by last September thought he'd locked up financing. "We had a guy in Seattle who was going to come in for $250,000 and then another guy in L.A. who was going to come in for $250,000," Taylor says. On the eve of preproduction, the California investor dropped out, and Taylor considered the project dead.

When Miller broke the news on his personal blog, two fans in Tennessee stepped forward offering to raise the needed funds on the website Kickstarter. Founded in 2009, Kickstarter is an online fundraising platform for creative projects. Musicians, designers, filmmakers, and other artists craft a short pitch, usually a video, post it on the site, and set a fundraising target and a time frame. Contributors are more like donors than investors, since they earn no return or equity, though they are promised rewards (a copy of the CD, dinner with the artist). If the project meets its goal, Kickstarter, a for-profit company, takes a 5 percent cut and the creator gets the rest. If it falls short, no money changes hands.

Kickstarter has emerged as a legitimate option for financing independent films, where a six-figure project is on the low end. So far, the company has raised more than $21 million from nearly 240,000 backers for 2,443 films, according to co-founder Yancey Strickler. He says six films have crossed the $100,000 mark. That's a departure from most projects pitched on the site, which are pretty small-time—a cartoonist looking for $2,000 to publish a book or a band that needs to rent studio time.

In January, first-time director Jocelyn Towne, an actor in Los Angeles, raised $111,965, based largely on the strength of a clever 4-minute pitch for her film I Am I, a drama about a woman and her long-lost father. "When I first pressed the button to get this all started, I was like, who knows?" says Towne. "It was a complete shock, especially since we personally knew only about 20 percent of our contributors." Strickler says backers tend to come from the extended network of friends of friends, but there are some 85,000 repeat contributors on the site.

Katie Aselton and her husband, Mark Duplass, are currently raising $20,000 to rent a state-of-the-art Arri Alexa digital camera to shoot Aselton's next film, Black Rock. The two are not rookies. Aselton directed The Freebie; Duplass, with his brother, Jay, made Cyrus, a comedy starring John C. Reilly, Jonah Hill, and Marisa Tomei. Black Rock, a thriller set in Maine, will star Kate Bosworth of Superman Returns. Aselton and Duplass are funding the movie out of their own pockets. Aselton says that as soon as they considered using the Alexa, which can shoot in almost any light, "we thought maybe we'll just go to Kickstarter" to pay for it. For a pledge of $500 or more, Aselton will send you two Maine lobsters and call to advise you while you cook them.

Independence is one of Kickstarter's main advantages over the typical filmmaker fundraising road show. "You're meeting tycoons and people's weird uncles," says Strickler. "And along with that comes significant strings. Maybe they want to cast their daughter in the second lead." Aselton says she and Duplass could have gone the studio or private-equity route to fund Black Rock, but "that also means getting a lot of cooks in your kitchen." Plus, the site is a way to promote a movie ahead of time. "It's created a fan base for the film, and it hasn't even been made yet," says Towne of I Am I. Marian Koltai-Levine, head of film marketing and distribution at the public-relations firm PMK*BNC, agrees that "it's become a viable marketing resource." She used Kickstarter in late 2009 to raise $5,250 to help send the crew of the indie comedy Bass Ackwards to the Sundance Film Festival.

As for Blue Like Jazz, it raced past its $125,000 goal and raised a Kickstarter film record of $345,992 last October. Taylor's backer in Seattle, seeing the interest, matched that sum and tacked on a little more. Taylor shot the movie for $750,000 and, thanks to new investors who have come on board, has $500,000 remaining for post-production. The first test screening is scheduled for June in Portland. In the meantime, Taylor has thousands of phone calls to make. "I just didn't think this was going to work," he says, "so I said for anyone who gave $10 or more, I would call them and thank them personally." He's about halfway through a notebook of 3,300 names.

The bottom line: Indie filmmakers say Kickstarter helps them finance and promote movies with less interference from studios and investors.

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