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).

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  1. identicon
    Anonymous Coward, 13 Jan 2012 @ 10:08pm

    Re: Re: Re: Re:

    Yes, it is a "payment", but then again so is every scheme for raising capital to help run a business project. The primary difference is the consideration one receives for writing a check. Classical VCs, within which I include, with some modifications, studios and labels, typically include things such as equity, shareholder agreements covering all manner of subject matter, participation (if not outright control) of selecting key executives, etc. The above model induces investors via offerings of a different nature.

    Importantly, I am not at all leveling any criticism at the Kickstarter model. Quite the contrary. It enables the participation of a wider financial base than is otherwise the case with the classical VC model.

    I admit that my comparison is a generalization associated will all investment schemes, but where we do differ is your generalization that legislation such as SOPA and PIPA (or whatever they eventually morph into) somehow makes it more difficult for a group like Kickstarter to get started, and as a consequence of which you note that it and another company do not support the pending bills.

    As for startups far removed from what Kickstarter is all about, I remain of the opinion that legislation such as the pending bills would represent but a minor pertubation that would be directed at sites who predicate their business plan of plainly infringing activity. As for others, legislation such as the pending bills would simply not be applicable. To say otherwise is, in my view, an overstatement that many are using to create an unwarranted and unnecessary moral panic.

    These are my observations and opinions. Please note I have not made any comments casting personal aspersions, and would greatly appreciate reciprocity.

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