Friday, September 28, 2012

New Study Sheds True Light on Limited Effects of CrowdFunding


A new study says crowdfunding benefits only certain kinds of movies. This is a very informative and honest article written by Evgeny Morozov for SLATE MAGAZINE. Check it out after the jump:


To see how the highly decentralized world of social media could disrupt the hegemony of established taste-makers in music, design, or fashion, look no further than Kickstarter. Just like Wikipedia redefined the process of creating an encyclopedia, this poster child of the crowdfunding revolution could redefine how dreamers raise funds for their next gadget or film—and perhaps even beget a cultural renaissance.

All of this sounds beautiful in theory. Have a great idea for a new project? Simply sign up for Kickstarter and post a description (don't forget to make a glitzy video in support), set your fundraising target and the deadline, create a panoply of rewards tied to various contributions (for instance, $5 might get you the new CD, but $5,000 would also get you a dinner with the musician), and spread the word about the campaign. If you meet the fundraising target, Kickstarter takes a 5 percent cut and the project goes ahead—if you don’t, no money changes hands. The platform is enjoying tremendous success: Earlier this year, one of its founders proclaimed—to some controversy—that in 2012 Kickstarter might distribute more money ($150 million) than the National Endowment for the Arts (its budget for the year is $146 million).

Such phenomenal success has attracted its fair share of criticisms. Some, like NPR, have bashed Kickstarter for being rather opaque about how it deals with projects that, once funded, provide few (or questionable) updates on their progress, face significant delays, or never deliver at all. Those aren't few: A recent study from the University of Pennsylvania looked at 47,000 Kickstarter projects and found that more than 75 percent deliver with delays. It's hard to say how many projects never deliver, as for Kickstarter “never” is a rather flexible term: Instead of acknowledging failure, many doomed projects simply drag on indefinitely, providing no updates and constantly postponing the launch date.

Delays are particularly common among projects that go viral and raise far more money than originally planned. Kickstarter has few incentives to safeguard such projects from their own viral success: The organization takes a cut from all money raised. And while Kickstarter expects that projects that don't deliver will eventually compensate their backers, it has no way to enforce such a policy.

As the projects advertised on Kickstarter move beyond entertainment and start tackling problems like urbanism and designing more livable cities, it's no longer enough to evaluate them solely in aesthetic and functional terms. For example, architecture and design critic Alexandra Lange has taken issue with the narrow, gadget-driven approach to solving complex urban problems that Kickstarer encourages. “You wouldn’t Kickstart a replacement bus line for Brooklyn, but you might Kickstart an app to tell you when the bus on another, less convenient line might come. You can’t Kickstart affordable housing, but the really cool tent for the discussion thereof,” wrote Lange in Design Observer. A community that is channeling its energy into crowdfunding a new urban park might be less prone to participate in the boring but consequential urban planning meetings at the local town hall.

All of these are substantial, potent criticisms, and the company has addressed at least some of them. But one of the assumptions that has mostly gone untested is that Kickstarter, with its great emancipatory potential to free creative artists from the shackles of the entertainment industry, would revitalize our culture, make it more diverse and less dependent on the conservative or greedy gatekeepers.

A new article in the latest issue of Media, Culture, and Society by the Danish academic Inge Ejbye Sørensen challenges this assumption and tells a more complex story about the impact of sites like Kickstarter on the culture industry. Sørensen studied how crowdfunding has affected documentary filmmaking in the United Kingdom. Britain stands out from other countries in that most of its documentaries are produced and fully funded by one of its four main broadcasters (BBC, ITV, Channel 4, and Channel 5) that dictate the terms to the filmmaker. In this context, crowfunding seems liberating, even revolutionary.

But, as Sørensen points out, this revolution has a few mitigating circumstances. First, Kickstarter might produce many new documentaries, but the odds are that those documentaries will be of a very particular kind (this critique also applies to other sites in this field like indiegogo.com, sponsume.com, crowdfunder.co.uk, pledgie.com). They are likely to be campaign and issue-driven films in the tradition of Super Size Me or An Inconvenient Truth. Their directors seek social change and tap into an online public that shares the documentary's activist agenda. A documentary exploring the causes of World War I probably stands to receive less—if any—online funding than a documentary exploring the causes of climate change.

Read the rest of this interesting piece here.

- Lena

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