Crowdfunding’s Imminent Implosion

By Terry Green,

Director Spike Lee is making the rounds on talk shows to defend his reasons for using Kickstarter to crowd fund film ideas he can’t sell to the studios and it’s not going well. Earlier this week on Bloomberg News,Mr. Lee went off on a rant after the program’s host opened the segment by raising the question of why an accomplished filmmaker is taking advantage of crowdfunding when it’s a tool that’s designed for helping aspiring filmmakers get a foothold in the industry and not intended for celebrities who have other finance avenues available to them. In fact, he interrupted the flustered host before she could complete her intro and asked, “Why would you open like that?”

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This interview may be an opportunity for an established filmmaker to defend himself, but it goes to the very heart of what’s essentially wrong with crowdfunding. With few limitations on who can launch a CF campaign and no ceiling on the amount of money that can be raised, the door is open for abuse. The argument could be made that Spike Lee is simply being a good businessman, and in a way it would be justified. What’s not being discussed in this interview, or anywhere else for that matter, is the strain that crowdfunding has put on commercial independent film producers who create jobs and pay film workers living wages. The glut of crowd funded microbudget films has clogged the system and made it harder for anyone to get ahead. This is the price of film’s democratization and when Spike Lee enters the arena, it only makes the flaws of crowdfunding more obvious.

Others have suggested this is a hate issue and that Spike Lee is being unjustly attacked because he’s an African-American filmmaker, which is ridiculous. This is a film economics issue with moral overtones and nothing more. Other celebrities who have taken advantage of crowdfunding have been criticized for the same reasons. The real question here is one of ethics. Should a celebrity be allowed to cash in on that celebrity by using a finance platform that’s primarily relegated for novices? Kickstarter may think it’s perfectly all right, but they’re also collecting a commission on every dollar that celebrities raise on their site, so the more the merrier. Anyone who turns this into an issue other than what’s defective about crowdfunding is missing the point.

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