Crowdfund tops $20m

This article was first published in The Australian, 15 April 2014

Pozible tops $20m as media finds crowdfunds

Lara Sinclair

CROWDFUNDING services are emerging as significant funding and marketing platforms for new media projects in Australia, as home-grown player Pozible last week reached $20 million in total funds pledged, with media and entertainment its biggest category.

Players including original crowdfunder Indiegogo, US-based Kickstarter and Pozible, provide a way for people to ask friends and the public to contribute to a set fundraising goal for a particular project within a stated period of time, often in return for a reward.

US player Kickstarter says it has raised $4m in pledges in Australia since establishing a local site.

Indiegogo, which last week relaunched its brand and mobile-optimised site, does not release fundraising figures but claims to be growing by 300 per cent since launching in Australia and Canada mid-last year.

About 90 per cent of the funds pledged on Pozible since it was established in 2010 have gone to Australian projects, with the site recently expanding into Singapore, China and San Francisco.

Pozible claims a success rate of 56 per cent globally in terms of projects that reach their goals and co-founder Alan Crabbe says more than $5m has been raised to fund media projects.

“Our strongest (categories) are definitely within the creative industries,” Crabbe says. “People with a natural fan base or who have a following on social media — naturally these guys do better.”

Pozible’s most successful entertainment project has been a “zombie-themed, real-life shooter game” called Patient 0 that 18 months ago raised more than $240,000. The creators, IRL Shooter, are back on Pozible raising $308,000 to run version two, called Lazarus, and yesterday was almost half-way there with 50 days to go.

Comedian Dan Ilic raised more than $50,000 last month to extend his brand of political satirical comedy A Rational Fear, creating daily episodes for a 10-week season.

Crowdfunding for musical albums and pre-selling tickets to performances is also common.

It has been utilised to fund individual journalism projects in markets such as the US, but while journalism is not a top category in Australia, niche magazines aimed at particular interest group are increasingly turning to crowdfunding.

Permaculture magazine Pip exceeded its $9500 target in February to fund its first print run.

Similarly Issimo Digital Magazine reached its $12,000 target to fund a tablet magazine showcasing the work of Australian creative artists from filmmakers and authors to entrepreneurs.

In recent months, Pozible has launched a new type of supporter package — a subscription for between three and 12 months rather than a one-off payment — designed to help publications build subscriber bases.

“The key benefit is if you reach your target you get all that (subscriber) information,” Crabbe says.

Indiegogo estimates the global crowdfunding industry is worth $5bn. Local marketing and community manager Tony Been nominates independent films, comics and self-published books as the site’s top local media projects.

But he says a crowdfunded public relations campaign that saw a community in the Dandenongs raise $40,000 to stop McDonald’s opening an outlet — including buying a full-page ad in a Chicago newspaper — was among the most interesting.

“It’s often not about raising cash, it’s about building and engaging with an audience,” Been says.

Several local creative projects have recently chosen to raise funds on US-based Kickstarter because of its international audience.

Thomas Castets, co-producer of Out in the Line-Up, a documentary about homophobia in surfing that raised $35,000 on Kickstarter, says he wanted to make it “as comfortable as possible for the American market” to support the film.

Castets says crowdfunding is stressful and time-consuming for the creators, who have to develop a rewards structure and fund that from the total raised.

“The risk of not getting your target and failing after all the effort you’ve put in is very scary.”

According to Ben McKenzie, who used Kickstarter to raise more than $12,000 for sci-fi audio series Night Terrace, crowdfunding is “better in some ways than advertising” because the creators must connect with a community to succeed.

“There’s definitely a marketing component,” McKenzie says. “It does help you build an audience. (When I contribute to a project) I don’t just feel like I’m a customer. I feel like I’m involved.”