The Perk Problem in Video & Film CrowdFunding

By Josef Holm, Crowdfunding holds tremendous potential for digital video creators and indie filmmakers. It promises to close the funding gap and to empower creators to make better content. Unfortunately, unless you’re Veronica Mars, Zach Braff or a YouTube star like PewDiePie or SMOSH commanding a huge following, full time staff, your own merch line and brand integration, crowdfunding is not that easy.

The truth is, if you’re not crowdfunding a prototype like a Pebble watch, a 3D printer or the latest wearable tech, it is much harder to get backers to chip in at all. People don’t just “give” to crowdfunding campaigns, they want to buy something.

Viewer to Backer Conversion Rate

Some people assume that the sheer size of a crowdfunding platform is the silver bullet to a successful campaign, but if it were that simple, Kickstarter wouldn’t list 21,000 failed video/film projects on their site. Regardless what platform you use, 80% of all contributions will come from your own promotion efforts.

The question is, what happens once people reach your project page? More important than just the number of views is the conversion ratio from viewer to backer. It is obviously better to have 5,000 views resulting in 100 backers (1:50 conversion ratio) than 20,000 views resulting in 50 backers (1:400 conversion ratio). This ratio is strongly influenced by how sought after your perks are and how much you can sell them for, ultimately resulting in how much money you will raise.

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A Digital Download Or A Web Series Make For A Terrible Perk

Many creators know this and shy away from crowdfunding in the first place out of fear of not being able to come up with good perks, which are the cornerstone of any successful crowdfunding project. Backer fatigue is also a real problem, fans may give once, but without any tangible reward support fades quickly.

To successfully crowdfund, you need an audience and a product that audience is willing to give their hard-earned money for. It’s not enough to create a page and ask for people’s patronage, it’s called online panhandling and it doesn’t work. Fans back projects that give them something of value in return.

What’s A Valuable Perk?

While personal perks are fine, how many Google Hangouts, Skype calls and other non scalable perks can you handle before it just gets too time consuming? And how often are your fans going to come back for the same reward?

Anyone who’s ever been at VidCon knows this: YouTube fans love merchandise. While millennials may not like to spend money, they do so for cool swag by their Youtube idols, over and over again.

You need to offer your fans the kind of perks they are willing to pay money for, it’s stuff they get in the mail: tees, hoodies, mugs or smartphone covers with your branding.

The problem with merchandise is that you need to order it, pay for it, print it, repackage it, and send it to your backers individually. Unless you really like your local post office that’s just not a good way to spend your time.

It takes a lot of effort to fulfill these kinds of perks and there is a lot of room for error. We’ve heard enough stories of successful campaigns going broke because they miscalculated the cost of fulfilling perks, so we came up with a solution.

Hands-Free Perk Fulfillment

Olga Kay runs a crowdfunding project on Tubestart to raise $100k for her new web series and she’s using Tubestart’s proprietary Hands Free Perk Fulfillment to sell MooshWorld tees on her project page without lifting a finger.

Tubestart has partnered with Spreadshirt and CafePress to give creators access to over 800 customizable products that can be sold on their crowdfunding pages as perks.

Every time a fan orders one of these perks, the payment and order details are automatically sent to the fulfillment partner for on demand production and shipping.

The profit goes directly to the project owner’s Paypal account and the money is instantly available.

The fulfillment partners also handle returns and customer support so creators have more time to focus on what’s really important: making videos.

Creating new perks on Tubestart only takes a few minutes and is a quick and easy process:

Think of crowdfunding as a marketing campaign. When you’re sending traffic to your crowdfunding (landing) page, the higher value perks you offer the higher your conversion from viewer to backer will be. You want to automate the fulfillment part so you don’t have to waste your precious time fulfilling perks.

Remember, people don’t just “give” to crowdfunding campaigns. They either buy a prototype on Kickstarter, or in our case custom merchandise on Tubestart.

Thanks for reading! Please check out my other LinkedIn posts or connect with me onGoogle+ or Twitter

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CEO @Tubestart.com, Crowdfunding Innovator, Serial Entrepreneur, Social Media & Digital Marketing, Dog Lover

 

Source: http://insights.wired.com/profiles/blogs/solving-the-perk-problem-for-crowdfunding-youtubers

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