Kickstarter Helped Raise Nearly $100 Million In 2011... But There Are No New Business Models?

from the just-saying... dept

For years, we've been hearing how the new business models we talk about aren't really "big enough" or that they're just "exceptions" to the rule. Yet, every year we see more and more success stories involving those kinds of business models. Kickstarter, for example, has been quite successful building a platform that empowers exactly the kinds of business models we've described for nearly a decade -- and it has found tremendous success doing so. It just posted some stats for 2011, showing that just under $100 million was pledged into projects this year (with approximately $84 million going into projects that were actually funded).

Perhaps most interesting of all? The two areas of the entertainment industry where we repeatedly hear the loudest cries of "there are no new business models!" -- movies and music -- were the two largest areas on Kickstarter. An impressive $32,473,790.40 was pledged for films and video -- leading to 3,284 successful projects, involving 308,541 backers. For music, it was $19,801,685.21 pledged for 3,653 successful projects, involving 260,178 backers. The 2011 numbers roughly tripled the 2010 numbers, so this kind of thing is clearly growing quickly. And, remember, Kickstarter is just one company in this space, which has multiple other companies -- such as IndieGogo and PledgeMusic -- offering similar platforms.

And yet, we're told that there's no way to make money and that fans just want stuff for free? Perhaps it's time to rethink some of those assumptions...

But the really key thing here is exactly what we've said all along: new business models develop. They always do. And part of allowing those new business models to develop is letting new startups, services, platforms and tools develop to meet the needs of the market. Kickstarter clearly meets a need. Things like SOPA and PIPA make it more difficult to start such a company or build such a platform these days (which is why both Kickstarter and IndieGogo have come out strongly against these bills). Let these new services live, and watch new business models succeed (and with them, all sorts of artists and creators).

Filed Under: crowdfunding, economics, independent artists, new business models, opportunity
Companies: indiegogo, kickstarter

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  1. icon
    PaulT (profile), 13 Jan 2012 @ 1:29am

    Re: A New World

    "My only concern is that it is a long, long, long way to go before the Internet can turn out something like Avatar"

    Well, to be honest, that isn't necessarily a bad thing. Avatar, quite frankly, was an impressive tech demo but little else in plot, characters, etc. Keep those movies for the corporations, independently produced movies tend to shine when they aren't trying to emulate those who think that throwing money at the screen makes a good movie. While effects movies can be great, they're not the only thing out there (and even so, I'd personally rather watch a Monsters or Splinter than Battle Los Angeles for example).

    "Let us keep in mind one fact though when this $9888.49 average is not far below the budget for the first Paranormal Activity movie."

    Indeed. For all the talk of $100 million dollar movies, the ones that tend to be most profitable (as in percentage return on investment, rather than sheer dollar return) are the low-to-mid range genre pics. PA and Avatar are probably outliers on either end of the spectrum, but at low budgets all a producer needs is a couple of medium-to-large hits to be able to fund future project and make a healthy profit in return. Much better than ploughing ridiculous amounts of money into a film that would have to become the highest grossing of all time to make a profit (a gamble that happened to pay off for Avatar, but could have gone so wrong...)

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