Mamo #301: Kickstarting Oblivion in China

Mamo returns! We look at the changing face of China in light of Iron Man 3, the sci-fi might of Tom Cruise and Oblivion, before diving into the whole Zach Braff Kickstarter fracas. There’s some larger point to be made here about how and where movies make money, we’re sure.

To download this episode, use this URL: http://rowthree.com/audio/mamo/mamo301.mp3

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Sean Kelly
Guest

Some VERY interesting background music during this podcast.

I’ve only donated to one crowd source campaign so far, which was a Hot Docs DocIgnite project for a paranormal investigation doc called 30 GHOSTS. Even though I got a number of perks, like a “thank you” in the credits and a digital copy of the finished film, I donated because I was quite interested in the subject matter.

I don’t plan on donating to the Zach Braff project, though I plan on seeing the final film (I’m apparently one of the very few people who was a big fan of Garden State).

Andrew James
Admin

I’m definitely donating to Braff’s kickstarter. Garden State is terrific. ESPECIALLY for a first time film. Haven’t understood why Braff never went back to do more.

Sean Kelly
Guest

His next major film role was THE LAST KISS, which I think started giving Braff a reputation for doing “emo” films.

I thought he was pretty good in the 2010 Canadian drama THE HIGH COST OF LIVING, of which I saw the premiere at TIFF.

If you look on IMDB, Braff has never stopped working. He just isn’t as visible now that SCRUBS has ended.

I haven’t watched GARDEN STATE for a while, so I should probably pull it out sometime.

Andrew James
Admin

The High Cost of Living is in my Netflix queue and I’ve been meaning to get to that. And I know he’s been working but he just hasn’t gone back to the writing/directing well since GS. I’m probably in the minority in actually liking The Last Kiss. Jacinda Barret is great in that film and the rest of the cast is a lot of fun too (Casey Affleck, Eric Christian Olsen, Blythe Danner, Tom Wilkinson, Rachel Bilson, etc.).

Braff is pretty vocal in social media. He even did an AMA on Reddit about a month ago and really went to town with it.

Voncaster
Guest

For better or worse, kickstarting or crowd sourcing seems like the wave of the future. Crowd sourcing is all over video games and podcasting. It seems logical that crowd sourcing will make its way into movies and music (I don’t follow music much now) as well.

I have two questions.

1. Will this model last, or will it be a fad?
2. What is the downside to crowd sourcing? Why not gauge public interest and dollar commitment with everything produced?

I literally have not idea on question 1. Just like the app store in its infancy, this seems like the wild west right now. Every type of idea is being tested.

On question 2 the number of downsides and upsides is so staggering it makes my head spin.

Andrew James
Admin

Ask this guy about Kickstarter and social media funding. He’s an expert:

https://twitter.com/lmcnelly

Matthew Fabb
Guest

Having finally listened to the episode, my response to Matthew Price’s comments is that I don’t think Veronica Mars fans are being taken advantage of. It’s not like they are donating their money to the project just so that it can get made without getting anything in return. They are getting DVDs, blu-rays, digital versions of the movie, t-shirts, posters, scripts, signed items, props from the movie and all sorts of other things.

I’ve been to San Diego Comic Con and understand there is already quite the market for all these kinds of things for cult tv shows. People selling autographs, scripts, props, anything and everything that fans might buy. Sometimes the company behind the tv show/movie or whatever gets a cut, but for a lot of it they don’t. Either way, the profit made off of these sales don’t exactly go to making any new content, like the case of the Veronica Mars project.

I’ve been a fan of a lot of niche tv shows and movies that can’t continue because the cult audience isn’t big enough. Stuff like the mentioned Firefly / Serenity and it’s really frustrating. Now all of this is changing as sales of all this material that fans already buy can be used to fund new content is really awesome.

That said, I have backed projects that I have gotten nothing but perhaps a postcard rather than any physical item.

One where they built a statue of Harvey Pekar in a Cleveland library and another one where the Locus foundation used money to digitalize the archives of Locus magazine of old sci-fi and fantasy authors. Content that was in lousy storage and was slowly disintegrating. So old personal letters, photos and other artifacts from the likes of say Isaac Asimov, Arthur C. Clarke, Philip K Dick and others. The statue I’ll likely never see in person and at most, I might take a quick look the archives once it’s all digital, but for that I’m more hoping other more dedicated fans point out the really interesting stuff.

They sent me a postcard in both cases but not likely worth the $5 or whatever I gave in each case. I didn’t do it for ego, because until now I don’t think I’ve mentioned it publicly (I might have shared it on Facebook saying I think these projects are cool). I just simply like a world where those things existed and figured it was worth the small amount that I gave them.

Rick Vance
Guest

The true downside to Kickstarter like services is that one terrible experience is often enough to just dampen enthusiasm for anything on the website, exactly like what has happened to me.

It will take something that I REALLY want to get me back to any of those kind of websites.

Matthew Fabb
Guest

Well, you certainly are trusting your money with whoever is on the other side. Best go with people who have had some success with carrying through with the project. Either other kickstarters or other products or pieces similar to what they are doing in the past. The site has tried to do a bit more with forcing projects to include a risks section, so that consumers know more what they are getting into while forcing those creating the projects to think through some of the pitfalls. In the end, a project could still be delayed or fall through.

Robert Reineke
Guest

My problem with the whole Kickstarter thing is that it’s a much worse deal for a commercial project than investing in the stock market. If I fund 1/100th of a regular movie, I’m theoretically entitled to 1/100th of the profit. If that turns out to be The Blair Witch Project, I’m doing great. For a Kickstarter project, and the same scenario, I might get a Blu Ray disc and t-shirt.

Which is fine for non-commercial films and the like. Stuff like Veronica Mars and Zach Braff’s project, films that could actually make a modest profit, are playing Kickstarter funders for suckers. I’m much better off buying shares of WB stock, or becoming part of a small LLC production company, than I am at funding a commercial movie.

Matthew Fabb
Guest

Robert, that seems to be a common misunderstanding of KickStarter. Stuff like Veronica Mars and Zach Braff’s project aren’t looking for investors. They are looking for fans to pre-order the movie or buy merchandise where there is enough profit for them to use to help fund the movie. It’s all about connecting with fans and cutting out the middle man, not looking for investors outside of the movie or tv industry and adding in a new middle man.

That said, when Amanda Palmer first launched her KickStarter project, she was looking for people who would be able to give her a loans. As at that point I don’t think she realized she was going to break $1 million. There was a website outside of KickStarter that is apparently set up to deal with the loan process that she was looking to use. I’m not sure what kind of return on investment they would be getting or if anyone took her up on her offer. However, once her KickStarter really took off, I don’t think she needed the loans and I never heard of any follow up on it.

Robert Reineke
Guest

If it was about preordering, it would cost only the amount of a DVD or so. If I give them $100 and I get a poster and DVD out of the deal, I’m clearly getting ripped off. If I paid $25 dollars for a preorder of a DVD, and they managed to get enough people together to make a movie, then ok.

Kickstarter is a financing operation for something like Veronica Mars and Zach Braff’s movie. I’m ok with that for things that aren’t clearly profitable on paper. But for commercial projects, a piece of equity should be included in the deal. Otherwise, they’re playing us for suckers and it’s a step or two away from a Ponzi scheme.

Using Kickstarter to finance a movie with any sort of commercial aspirations is a “buyer beware” situation for me. And why Kickstarter will never replace regular financing once people wise up. This is just going to speed up the process.

Andrew James
Admin

I think you’re missing the point. Kickstarter is not supposed to be a monetary investment. If you want a return on your investment, then yes, buy stocks or bonds or a C.D. or something.

You’re funding art for the joy of art. It’s how PBS and NPR get along too. When you pledge $10 per month or whatever, you’re not hoping for a return on your invest monetarily. You’re hoping for a return on in your investment in the way of quality programming that you like to watch/listen to.

I helped fund Braff’s movie not because I think I should get a DVD or a t-shirt or my name in the credits. I funded it because I want Braff to make another awesome film and be able to do it outside studio interference. I helped fund art. I don’t consider myself a sucker… unless Braff runs away to Chile or something with the money – which I seriously seriously doubt. You pick the projects you want to see happen and from people you deem trustworthy. I follow Braff on Twit and Reddit and I feel like I know the guy by now.

Robert Reineke
Guest

Kickstarter is also not supposed to replace normal financing channels.

If I wasn’t highly suspicious that Braff couldn’t get the money to make the film with his connections, or foot the bill himself with his tv money, I’d probably applaud him. But, since he’s not a non-profit or charity, and clearly has financial means for himself, why shouldn’t I look at it as a situation where Braff simply doesn’t want to risk a dime of his own money and is leveraging his celebrity for his own profit?

Good for him, I guess, but I’m not sure why that means I should get gouged for a DVD so a millionaire can make a movie. (It doesn’t help that I wasn’t that impressed with Garden State.) For a commercial proposition, which I believe both Veronica Mars and Braff’s projects are, I think an equity stake is a perfectly valid part of the bargain to ask for. I’m willing to bypass that in the case of a movie that I think won’t make any money as an equity stake means next to nothing in that case, but we’re only a step or two away from someone figuring out a way to ripoff a bunch of people. That potential Brett Ratner Kickstarter project is only different from Braff in how we feel about the respective directors.

One thing I’m convinced of, Kickstarter will cease to exist as is once a Kickstarter project is so successful that the people who footed the bill will feel ripped off. It may be a celebrity driven project that grosses $20 million. It may be the next Blair Witch project. But, money will ruin it, in one form or another.

Matthew Fabb
Guest

“Kickstarter is also not supposed to replace normal financing channels.”

See, I disagree that it should totally replace financing channels for certain kind of projects. As I said, it’s about removing the middle man and making a direct connection between the fan and the creator.

Also I seriously doubt Kickstarter will cease to exist from the result of any particular project getting too big or bringing in too much of a profit. That’s a complete misunderstanding of fans who aren’t looking for a stake in the profits. Take Veronica Mars, say it brings in over $100 million dollars, do you think fans would be upset? No, backers who are fans would be overjoyed, as it means more Veronica Mars movies and justified that they knew the movie would be successful.

Did you think that Amanda Palmer fans got upset that she brought in over $1 million? No, they were all ecstatic. The majority of them thought she was totally justified in not paying other musicians who would join her for particular songs. While Palmer did change her stance and pay them, it seemed mainly people following Palmer who were upset, not the fans themselves. I imagine if she did another KickStart it would be even bigger.

“If I give them $100 and I get a poster and DVD out of the deal, I’m clearly getting ripped off. If I paid $25 dollars for a preorder of a DVD, and they managed to get enough people together to make a movie, then ok.”

For Veronica Mars, the cheapest way you get the movie is $35 for a digital version and a t-shirt, plus a PDF of the shooting script. I say that’s a fair exchange. For $50 you’re getting a DVD & a t-shirt, plus the PDF script.

The tiered pricing is something that the movie industry has been doing a bit of, where they sale a pain version of the DVD, a 2 disk version and then 2 disk with some sort of model or something.

The music industry has been getting deeper into that where they will sell you anything from a digital version, up getting a big artbook, t-shirt, vinyl version of the album, perhaps something signed. It’s a way of getting more money out of the bigger fans and that kind of thing has just been expanded with KickStarter. If people though they were getting ripped off, then they wouldn’t likely be paying for it.

Either way, despite whatever profit there might be these aren’t people looking to making a business investment, these are fans looking to support their favorite creators.

Robert Reineke
Guest

“Either way, despite whatever profit there might be these aren’t people looking to making a business investment, these are fans looking to support their favorite creators.”

And, because of that, at some point someone is going to take advantage of their fans and rip them off. And there’s going to be fallout.

In that regard, I find traditional financial models much more fair and equitable to the fans than Kickstarter. I get a movie out of my investment and maybe a nice profit too vs. I get a movie out of my investment and maybe a DVD or some extras. The former is the superior model.

When you start looking at the potential for real profits, that’s where the potential for abuse comes in. And why I’m very leery of obviously commercial projects using a mechanism designed more for non-profit or almost charitable ends. I mean, Zach Braff couldn’t have sold shares in his movie giving his fans real equity?

I don’t think Braff is using Kickstarter cynically, but let’s say the film is a modest hit and he gets to keep a windfall. That’s going to look bad if it gets out he made $10 million or so and the people who financed his movie got a bunch of DVDs. Good for him in a capitalist sense, but it’s one of the dangers for abuse. And what’s to stop the next celebrity from using Kickstarter cynically?

Rick Vance
Guest

I can speak to that because what happened with the one Kickstarter that burned me was the guy made 91,000 over his goal, he had already paid his artist in full(it is a comic) so he goes to maximize profits.

Orders a whole bunch more than were ever backed and then realizes that all the stretch goals to make the book larger also made it a monster for shipping costs & charging only 10 dollars for intl shipping is now looking like a bad idea. (This was last September)

Cut to now, where ‘most’ of the US backers have gotten their books, he is selling copies off his website, off Comixology and off Amazon, meanwhile starting other back-up campaigns to make more money to ship the books that still need to go out internationally.

Matt Gamble
Guest

Ummm, Robert, do you really think if you gave $25 to Warner Bros they’d give you a percentage of the gross? You’re more than welcome to try but it ain’t going to happen.

Robert Reineke
Guest

I’m not giving WB money, I’m buying a share of the company, which means if WB has a hit movie it’s likely that the share price increases and/or I get a dividend. In either case, I share in the success or failure of every WB movie since I own some miniscule portion of it.

There are many problems with corporations, but one of the things that a corporation is theoretically good at is rewarding the people that invest in them.

With Kickstarter, I’m not really investing in a product, I’m contributing to it. Theoretically, if I don’t go into it with false expectations there’s nothing wrong with it. But, ultimately, I think it’s not going to compete with a model for generating capital that actually gives out a stake in equity. A model where someone can reap 100% of the financial rewards while taking 0% of the financial risks is fundamentally flawed and rife to be abused.

It’s also why I never see Kickstarter evolving beyond these niche, non-commercial projects. At a certain point people are going to realize that financing through Kickstarter for a commercial project is not a good deal and everybody is making money on a movie except for the people that actually put up the money. Fundamentally, being an investor is a better deal than being a contributor.

I have no problem giving to something like Flyway, where I don’t think anyone is making any money off of it. But, I’m not just going to give someone like AMC money to show movies and make a profit off of me with no return. I think that’s a reasonable line to draw. If you stand a chance to make real money off your project, Kickstarter is a ripoff for contributors. It’s much more equitable to go through traditional financing and pay out in terms of equity in the success or failure of a project.

Andrew James
Admin

You keep talking about a “good deal.” People don’t pay money to a kickstarter project looking for a good deal. They want to see a great movie or a great video game or whatever get made that they can enjoy.

If I give Zach Braff ten bucks and he makes a movie that garners billions, then good for him. He made a quality picture and I helped make that happen. I’m happy I helped make that happen.

I understand where you’re coming from; and again, if you don’t want to give money to an artist for ANY reason, that’s totally cool. But some people are willing to help finance someone trying to make something that we can all (hopefully) appreciate.

Matt Gamble
Guest

But you’re comparing apples and oranges. Investing vs subscribing. Kickstarter is fundamentally a pre-purchase program, in which buyers give money in return for a future product and by doing that they may garner other rewards.

Clamoring for a financial return from something that seems far more geared to fostering cultural growth seems kind of out of touch and very Capitalistic.

Get with the times, Man!

Robert Reineke
Guest

Where we differ, is that I don’t think that Kickstarter should be used to enhance the profits of corporations.

I realize that movies are hopelessly mixed up between art and profit. But, to me, the majority of Kickstarter projects are little more than little DIY art projects, I’ll call them apples, while Veronica Mars and Zach Braff’s project have obvious commercial appeal, let’s call them oranges.

Seriously, Veronica Mars will almost certainly be released with a WB logo in front of it. There’s a good chance that Zach Braff’s project will be released under the Fox Searchlight banner like Garden State. Why are we subsidizing projects to help make major corporations money while getting a capped return? (I’d think Mr. Conscious Consumer would back me on that question.)

Let’s face it, for the most part the preorder a product system is not a good deal. Usually when I preorder a product I get a discount, not pay twice retail. The only reason to do that is to help out the producer get the project made in the first place.

But, for Veronica Mars and Zach Braff’s project, there really isn’t a need for that. Braff has the financial resources that he could front the money or take out a loan. Like millions of people that start businesses every year. That he chooses to take a route where he doesn’t have to pay back the people that are, for the most part, financing him makes me raise an eyebrow.

Especially since there’s a potential for a significant profit. Garden State grossed about $27 million in 2004. Let’s assume that there’s potential for Braff’s new movie to do about the same and assume a 50/50 split. You could easily be looking at $13.5 million split between Braff and the distributor before home video. All that for no money down on Braff’s part. That’s a pretty sweet deal.

Now, I’m not saying there’s anything wrong with an artist profiting from his work. Especially if it’s good art.

But, again, why are we subsidizing multi-millionaires and major studios?

Now, maybe the film is terrific. Good for Braff or the Veronica Mars folks. But, the minute you start using Kickstarter for projects that will have a major studio label in front of them (like WB or Fox Searchlight) is the point where I think people are getting taken advantage of. Because apparently the only people not in it for the money are the fans at that point.

To me this is the classic caveat emptor case. Especially since I think that these films could be made without Kickstarter. In which case, you wouldn’t have to pay double retail for the DVD to a film you don’t even know if you’ll like.

Ultimately I think this is self correcting. There’s a reason that our capitalist system has developed as it has. Giving money to non-charities without expecting to share in the rewards isn’t a sustainable financial model. Ultimately, a system where all the costs are paid by a group of people and major financial rewards are reaped by a different group of people can’t last. If nothing else,eventually the first group of people run out of money to spend.

Matthew Fabb
Guest

Robert, but first fans are going to have to see that they made a bad deal. Yet most that I’ve seen online of say Veronica Mars are rooting for the movie to make as much money as possible. Fans are also hoping for their favorite cancelled tv series or movie to become a KickStarter project. It’s currently having the opposite effect that you are describing.

The biggest problem that KickStarter has is what Rick Vance describes. People not following through with what people were promised. Creative people are not exactly known for their business sense. Some are, but many just don’t work that way. So things end up costing more or taking longer and backers get annoyed.

Robert Reineke
Guest

We’ll see what the reaction is once the movie actually comes out. I think these corporate / commercial projects will do fine initially, but then reality will set in and people will start to ask why we’re backing corporate / commercial projects. Especially if there are some disappointments and some obnoxious financial successes.

To me, I think it’s fine when we set something up where it costs me a little, the artist doesn’t make any real money, but we both end up with a piece of art. But, when it costs me money and the artist/corporation makes a bundle, problems will set in even if we both end up with a piece of art.

Again, I don’t see how a system where one group of people accumulate substantial rewards with next to no risk while the people who pay for things get a meager return and can never share in the real success of a project can ever sustain itself. At some point the inequity of that system makes itself known.

I’m fine with drawing the red line at “Will a major corporation logo likely appear in front of the film?” To me, that’s a sign to guard your wallet.

But, that’s me. If the real hardcore fans of a property get one more go round, perhaps it is worth it to them. That’s part of the supply and demand curve and called “voluntary price discrimination”. They should realize they’re paying a real steep price though.

That will never replace funding for large scale productions with a major profit motive attached. But, it all comes down to trust. When trust is broken, like Rick Vance’s example or when someone eventually turns out a clear cash grab, the system will change.

I like this statement, which sums up my feelings.
“Nonprofits have a special advantage in engaging in voluntary price discrimination because they engender the trust that contributed funds will be used to advance the organization’s social objectives, and not line anyone’s pockets.”

Ultimately, I don’t trust that a Kickstarter for a commercial/corporate property isn’t going to be used to line someone’s pockets. Which is why I’ll never engage in something like that for a commercial/corporate property. And why I feel that people who give to Kickstarter, and get similar rewards as non-commercial films, are being taken advantage of. Now, others can feel differently and contribute, that’s part of the supply-demand curve after all, but I think I’ve made my reasoning clear at this point.

Robert Reineke
Guest

Or, to sum it all up, Kickstarter is all about trust. And if there are ways that the trust can be abused, Kickstarter and the contributors will have to be vigilant to avoid. None of these projects go out with a multi-page contract describing the responsibilities of the project starter.

Kurt
Guest

Was definitely talking INTERNATIONAL BOXOFFICE for Oblivion. The thing has made over $200M worldwide already.

Mattmovies
Guest

Except that you left it in the box office contest thread, presumably as a question about whether we should extend the “summer” period. Since the contest is only North America, my conclusion was that we shouldn’t.

Kurt Halfyard
Admin

But as a movie studio, releasing a big-star blockbuster in April with international appeal, appears to be a winning strategy.

Mattmovies
Guest

It may be winning, or not, but it isn’t what you were asking originally.

Kurt
Guest

The conversation is the thing.

Matt Gamble
Guest

So was releasing one in March,yet Hunger Games still moved to Thanksgiving.

Kurt Halfyard
Admin

One wonders when discussing Domestic Box Office will be rendered obsolete, the studios seem to be very much focused on International $$ such that we may have already crossed this point a couple years ago…

Matthew Fabb
Guest

Also when looking at what might be the future of KickStarter and how it might change the movie industry, is that there has been a big change outside of KickStarter with music and the site: http://www.pledgemusic.com

Pledge Music, is basically like KickStarter but just for musicians. Fans are pre-ordering an album from their favorite musicians who in turn use that money to record their album. Like KickStarter there’s all sorts of pledge levels, so that you could just be buying a digital version of the album at the lowest level then going up and getting physical CD’s, vinyl, t-shirts, books, private shows and more.

One big difference from KickStarter is that the amount of money raised is not made public, there is only a percentage shown. In other words 25% to their goal or 200% if they have gone past it. As some of the criticism that Amanda Palmer got was that she had over $1 million dollars and why is she doing x,y,z, when she has all that money. Ignoring the fact that a lot of the money was paying for things like beyond recording of the album & music videos, but also all the things people ordered from CD’s to huge bloody art books to crazy giant fancy art books.

Anyways, a lot of independent artists have been using Pledge Music one of the bigger groups that come to mind is Ben Folds Five. I’ve seen ever smaller bands pull it off as I’ve pledged a small band called Ringo Deathstarr. It was for their second album and to get a sense of their size, when I saw them play in Toronto the audience must have been no more than 100 people or so. Not a band with a big following, but they managed to get enough pledges to get enough money to record their second album.

Now movies have a lot more moving parts and generally a lot more expensive than albums. Still I could see a site that dealt with nothing but films. Expand the number of film categories and try to build an specific audience for it like Pledge Music.

Antho42
Guest

I am glad the Chinese public is fighting back: http://www.chinaeconomicreview.com/domestic-drama

Kurt Halfyard
Admin
Matthew Fabb
Guest

“But if the website wants to maintain its status as a place for cash-strapped filmmakers, video game creators, and musicians to find funding for their projects, it should find a method to prevent wealthy members from abusing the system. It’s unfair to ask these artists to compete with the likes of Warner Bros.”

Yet Veronica Mars, Zach Braff and others seem to growing the KickStarter audience. They are signing up for KickStarter project for the first time and certain percentage of the audience ends up supporting other projects from KickStarter that they were not aware of. Each year KickStarter seems to be growing and getting bigger. That there is a finite amount of cash available for these any of these projects it complete BS.

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