Is crowd-funding simply in vogue or industry defining?
April 8, 2013
Crowd funding is hot right now. There is no denying it, everywhere we
look there are good news stories about the latest crowd funded project that had
their back to the wall before the public helped it over the line. Writers,
musicians, directors and game developers have been engaged in a power struggle
with the corporate monsters that have played gatekeeper for decades.
We are beginning to witness a power shift. Digital distribution has forever changed these industries and crowd funding appears to be the next step in the process. A glaring example is the popular TV show Veronica Mars, which was cancelled by the networks. It recently raised over US$2 million dollars in under 12 hours on Kickstarter to produce a movie. We also saw a game developer who was ushered out of game publishers offices faster than they could book appointments raise $6.2 million dollars for the ‘Star Citizen’ computer game project.
The interactive entertainment industry is paving the way for others to accept crowd funding as a legitimate alternative to seeking investor backing. The interactive entertainment industry raised US$83 million dollars out of the US$320 million dollars total raised through the crowd-funding hub. The popularity of the process is not being ignored with 44% of game developers surveyed at the most recent Game Developers Conference claiming they plan to try crowd funding in 2013. A staggering figure when only 8% of them had previously worked on a crowd funded project.
But how much power does it actually give to the masses? Even in a record-breaking year for games that were crowd funded on Kickstarter and IndieGoGo, the top ten games still made up 46% of the AU$1.161 billion dollars of ‘traditional retail’ sales in 2012.
“Well, gamers have more choice these days, they're no longer forced to tolerate $80 and $90 for releases, and although it was possible before people are more comfortable importing or downloading games…”
Alex, Gaming Journalist
Giving gamers more choice for their money is just one aspect of the power they are gaining. When crowd funding a project you are not only get vitally needed funds, but you get opinions as well. A scary thought you might think, are you essentially exposing yourself to thousands of new bosses nagging you about deadlines and updates? Far from it, these are consumer-based industries that understand how important their fans are, and that they live or die by them. It also becomes a vital marketing tool, offering the opportunity to test the idea and gain insights into its power.
It is an exciting time, with the crowd driving innovation. But how long can it last? There is already incredible saturation in the market. Every day new projects appear on Kickstarter or IndieGoGo attempting to tug on your heartstrings to get you to whip out the credit card, but how much money is actually out there? Phrases such as ‘Kickstarter Remorse’ are already being coined as the ugly side of project investment being exposed to the public. Others have simply invested all the money they are comfortable with, and will wait it out until their current investments are developed. Be that a movie, documentary, TV show, music album, crazy gadget or computer game.
What does the future hold? Will crowd funding lose its gloss, as more
and more companies use it to generate funding and buzz, will it lose the
powerful independent, grassroots feel that has brought people in?