The New “Soft” Money in Film-Financing Ecosystem

Zach Braff's "I Wish I Was Here" campaign trajectory Photo Source: Slated

Zach Braff’s “Wish I Was Here” campaign trajectory
Photo Source: Slated

They may not have realized this but more than forty-six thousand individuals – many of them ordinary Americans with no prior film industry knowledge – had a direct bearing on what has been happening this past week thousands of miles away at the Cannes Film Festival. Not so much on the rain-sodden red carpet action, as on the business dealings that went on in the makeshift offices of the French film sales company Wild Bunch just a short distance away from that nightly fusillade of flashbulbs. For it is here that Zach Braff’s “Wish I Was Here,” a project only made viable by the $3.1 million that this multitude of individuals have pledged towards his total production costs, was being pitched to territorial distributors from around the world.

Without that Kickstarter-enabled contribution, Braff’s long-gestating project would have remained stunted by the same market forces that have conspired to prevent him from directing a follow-up to his 2004 indie darling “Garden State” for close to a decade. “I have almost no foreign value,” he explained recently to the L.A. radio station KCRW. “I had done a TV show for ten years that doesn’t count. ‘Garden State did well overseas. But not numbers that are going to show up on their algorithm.”

Zach & Adam Braff co-wrote the screen play during the summer of 2012 Photo Source: Kickstarter - Wish I Was Here

Zach & Adam Braff co-wrote the screen play summer of 2012
Photo Source: Kickstarter – Wish I Was Here

But throw in $3.1 million of non-recoupable crowd donations and the business calculus becomes so much more attractive. What would have been a reported $5.5 million package requiring quantifiable box office stars to make the numbers work, is now transformed into one costing less than half that amount and with a cast of characters played by actors Kate Hudson, Anna Kendrick, Josh Gad and Mandy Patinkin that could be chosen on creative grounds, rather than their overseas economic values. A ten-year lost cause has, in the space of just 31 crowdfunding days, flowered into one of the hotter projects pitched on the Croisette – a feat made all the more astonishing when you consider there were a total of 3,340 new projects unveiled for the first time at this year’s Cannes film market.

Welcome to the indie world’s new arithmetic, a film financing revolution for which Braff has become the inadvertent poster-child through his committed embrace of crowdfunding. In the face of industry skepticism and media cynicism, the actor-writer-director has doggedly kept the faith and in so doing opened the doors to not only a new source of seed money but to better equity deals from bona fide film investors. Independent cinema is becoming a rational business proposition again. Here’s how…

The old film math hinged on combining three broad swathes of financing:debt, usually in the form of loans against bankable foreign pre-sales; a tranche of private equity; and whatever soft money can be extracted in the form of tax credits, government subsidies, service discounts, box office rebates and co-production programs.

Each of these three pillars has its challenges. Banks have tightened their lending criteria and foreign distributors are more conservative in what they are prepared to pre-buy. Soft money incentives are being held up to political scrutiny in this age of fiscal austerity. And private equity is being asked to bridge the budget gap on films after most of the rights have already been sold off – meaning less and less upside opportunity for those profit participants.

Pages: 1 2

HEADLINE NEWS

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news [...]

NPRAfter Outcry, Crowdfunding Site Patreon Backs Off Plan To Raise ...NPRThe popular crowdfunding service Patreon has backed off plans to change its payment structure, after widespread, vocal and passionate opposition from creators and their fans. Last week, the site announced it woul [...]

TechCrunchHow hate speech crowdfunding outfit Hatreon crept back online ...TechCrunchIf you want to make a living creating white supremacist content, you're probably not going to do it via sites like Kickstarter and Patreon, which prohibit hate speech. Fortunately there's Ha [...]

EntrepreneurWhy Some Small Business Owners Are Turning to Crowdfunding to Save Their CompanyEntrepreneurMany owners of beloved local businesses, especially in pricier cities, have been forced to swallow their pride and appeal to their customers in times of crisis -- a process streamli [...]

CoinDeskKickstarter ICO? Don't Count On It Says Crowdfunding Leader ...CoinDeskThe company most widely associated with crowdfunding, Brooklyn-based Kickstarter, has no plans to get into the initial coin offering (ICO) business. Coming in response to the news yesterday that compet [...]

ForbesCrowdfunding Do's And Dont's From iFundWomen's Karen CahnForbesDuring our conversation, she was transparent in sharing that her first software company, VProud, failed because she “did everything backwards” and spent too much time trying to perfect the product. “Pe [...]

CryptoCoinsNewsCrowdfunding Giant Indiegogo Looks to Make ICOs MainstreamCryptoCoinsNewsCrowdfunding platform Indiegogo has a plan to help initial coin offerings (ICOs) break into the mainstream, even as the U.S. Securities and Exchange Commission (SEC) is ramping up its oversight of [...]

BBC NewsWu Yongning: Who is to blame for a daredevil's death? - BBC NewsBBC NewsLast month, Wu Yongning went out to do what he loved best - scale a skyscraper without safety equipment and film himself dangling off its roof by his fingertips. What happened next almost seems inevit [...]

TechCrunchFormer Gawker employees are crowdfunding an effort to buy Gawker.comTechCrunchWhile Univision acquired most of Gawker Media's sites last year (and renamed them as the Gizmodo Media Group), the deal didn't include Gawker itself. In fact, BuzzFeed reported last month [...]

NPRCrowdfunding For French CastlesNPRYou too can own a French chateau, in part, anyway. Romain Delaume, CEO of Dartagnans, tells NPR's Scott Simon about a crowdfunding effort underway to preserve La Mothe-Chandeniers. SCOTT SIMON, HOST: What if I told you that for about $60, you [...]

CFB Finance

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |