Kickstarter Likely To Provide More Funding Than The National Endowment For The Arts In 2012

from the but-there-are-no-business-models... dept

Tue, Feb 28th 2012 4:59am — Mike Masnick

An interesting point made by Carl Franzen, looking at the continued growth of Kickstarter raising funds for content creators, is that the site is expected to surpass the amount of funding provided by the National Endowment for the Arts this year. They're expecting to break $150 million (this past year it was closer to $80 million), while the NEA has $146 million to give out. Obviously, there are all sorts of differences between the two, but as a milestone, it seems interesting and noteworthy. Also, of course, $150 million may pale in comparison to what some of the big entertainment companies spend, but watch the trend lines and remember your innovator's dilemma lessons, and you'll begin to recognize that new opportunities and new business models have tremendous potential. The old ones? They're losing steam...

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: culture, funding, nea, new business models, the arts
Companies: kickstarter

41 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Michael, 28 Feb 2012 @ 5:12am

Anything that takes the wind out of the big corp's sails I consider to be good. They've treated us consumers as if we were all criminals and now we're showing them just who's calling the shots.
[ link to this | view in thread ]
Ima Fish (profile), 28 Feb 2012 @ 5:38am

So the Republicans are right? The government should not fund artist endeavors?
[ link to this | view in thread ]
bob, 28 Feb 2012 @ 5:43am

Another Paywall
I like Kickstarter but it's the ultimate in paywalls. It's the antithesis of the P2P-sharing schemes we normally see around here.

If enough people don't kick in enough cash, the products aren't produced at all. There's no chance for freeloading scum to head to the P2P networks-- at least until the creators get paid enough to break even.

Then they're arguably stealing from the good folks in the crowd who actually funded the project. But no one around here wants to think that way because this site is devoted to demonizing the creators for wanting to eat and enjoy health insurance.

Is this new? Not really. People have been using threshold contracts in security law for a long time. It is a bit newer for average consumer goods where the creator used to take more risks in producing the initial product run.

If anything, this is a step forward for the hard working creators who will now take fewer risks. I should point out that the consumers are the ones who shoulder the risks. They don't get to touch the product before buying and they can't read reviews on Amazon either. They just have to decide whether the pitch is cute enough. It's almost impossible to buy after the fact unless the creator sets up the production line again. It's almost the ultimate triumph of hope over experience.

But hey, I'm just happy to see something positive for the lives of the creators from this land of creator haters.
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 5:45am

Re: Another Paywall
You know what I hate? Straw men.
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 5:53am

That is great now Kickstarter should go international, that would be news.

Like the competition Indiegogo

Quote:
IndieGoGo is an international crowd funding site founded by Slava Rubin, Danae Ringellmann and Eric Schell in 2008. Its headquarters are in San Francisco, California. As of 2011, it has hosted over 45,000 funding campaigns in areas such as music, charity, small business and film.

Wikipedia: Indiegogo
[ link to this | view in thread ]
Jason, 28 Feb 2012 @ 5:53am

Free Market
and the Free Market wins again....
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 5:58am

You'll know when Kickstarter hits it big time when it green lights Ghost Rider 3.
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 6:05am

Re: Another Paywall
Is this new? Not really. People have been using threshold contracts in security law for a long time. It is a bit newer for average consumer goods where the creator used to take more risks in producing the initial product run.

You make a good point here and it's good to see you starting to agree with things around here.

Of course the concept of "funding things" isn't new. Great ideas often aren't "new" ideas, but are derived from multiple ideas. Hence the often ridiculousness ends we see in patent and copyright claims as "new" ideas.

Imagine if those threshold contract creators patented the concept and the "something positive" you are so happy to see what never have happened.

Imagine how many more creators could eat and enjoy health insurance (as a side note, who really "enjoys" dealing with health insurance?) if more doors were open to them than closed?
[ link to this | view in thread ]
Another AC, 28 Feb 2012 @ 6:07am

Re: Another Paywall
I don't hate creators, the big labels and studios do.
[ link to this | view in thread ]
Bengie, 28 Feb 2012 @ 6:13am

Re: Another Paywall
9/10

Best troll in a long while.
[ link to this | view in thread ]
Prisoner 201, 28 Feb 2012 @ 6:15am

Re:
Why would anyone contribute to the creation of Ghost Rider 3?
[ link to this | view in thread ]
PaulT (profile), 28 Feb 2012 @ 6:17am

Re: Another Paywall
"I like Kickstarter but it's the ultimate in paywalls."

Bull, like every paywall comment you make under your weird ongoing obsession. You literally haven't got a clue what the term means. Hint: it's not when you're asked to pay for something, especially not when said payment is opitonal.
[ link to this | view in thread ]
PaulT (profile), 28 Feb 2012 @ 6:22am

Re:
The measure for hitting it big is to fund another sequel in a pointless franchise which doesn't have enough fans for the current movie to be successful, where most people hated the first film?

That's a bit of a strange metric, don't you think?
[ link to this | view in thread ]
:Lobo Santo (profile), 28 Feb 2012 @ 6:31am

Re: Belief
Well, really the government shouldn't be funding anything except perhaps a defensive military force--on the other hand, they shouldn't be taking all of our money either.
[ link to this | view in thread ]
E. Zachary Knight (profile), 28 Feb 2012 @ 6:35am

Re: Another Paywall
bob,

I rarely give your comments a second thought let alone an actual first read. However, your continued insistance that Kickstarter is some kind of paywall you expect us to hate is really off base.

Under the old regime, artists had to get permission and funding from a single entity (be it a label, studio or publisher) in order to be able to create their art.

Under the new system, artists can appeal directly to the market for the necessary funding. If the market holds not interest in making something, then no one loses. The Market gets to avoid something it doesn't want and the artist saves time by not making something that is not commercially viable. On the other hand, if the market wants the product, it will fund it and the product will be made. Everyone wins. The market gets what it wants and the artists spends time making a successful product.

Why the former is better than the latter in your mind is completely lost on me.
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 6:46am

Re:
Fine, I rescind my Ghost Rider 3 comment.

You'll know when Kickstarter has made it big time when they over fund a movie like Osombie:
http://www.kickstarter.com/projects/arrowstorm/osombie-feature-film
[ link to this | view in thread ]
Bengie, 28 Feb 2012 @ 6:50am

Re: Re: Another Paywall
Me at work. I need to not call people troll until later in the day.

IGNORE ME
[ link to this | view in thread ]
Chuck Norris' Enemy (deceased) (profile), 28 Feb 2012 @ 6:56am

Re:
NEA - When one appointed bureaucrat gets to pick and choose which artist creates the art that the masses should have.

Kickstarter - When the people decide which artist creates the art they should have.
[ link to this | view in thread ]
PRMan, 28 Feb 2012 @ 7:18am

Re: Re:
Ghost Rider 2 wasn't THAT bad.
[ link to this | view in thread ]
bob, 28 Feb 2012 @ 7:30am

Re: Re: Another Paywall
Optional? I don't think you understand Kickstarter. You have to get something tangible in return for your cash. Otherwise the security laws kick in.

And if the entire amount doesn't appear, there's nothing optional. The work doesn't get done and you don't pay the cash. If people don't pay, a big wall blocks everything.

Sheesh, It sounds like I can fool people by designing a paywall and renaming it something trendy, perhaps without a vowel. Maybe I'll call it Paywll and you'll all think it's really innovative and wonderful.
[ link to this | view in thread ]
bob, 28 Feb 2012 @ 7:33am

Re: Re: Another Paywall
Wow. You sure get fooled by the hype, don't you?

When you buy into a kickstarter project, you take a risk that it will be what you expect. Sometimes it will be better but sometimes it will be terrible. Everyone doesn't win every time.

Mark my words: there will big complaints about fraud and misrepresentation with Kickstarter. There will be some great projects but there will be some that just don't turn out the way the sales copy promised. The consumer loses the usual protection that comes from seeing a finished product and waiting for reviews.

And don't be so sure about the lack of control of a single entity. The Kickstarter board has to approve every appeal that is made public. They reject a fair amount. So if you don't play by their rules, you can't reach the crowd. Oh sure, you can set up your own website but you could always do that.
[ link to this | view in thread ]
PaulT (profile), 28 Feb 2012 @ 7:42am

Re: Re: Re: Another Paywall
"Optional? I don't think you understand Kickstarter."

I certainly do. When was the last time you were forced to pay anything there? You're free to not pay anything, just don't whine if your preferred project doesn't get funded without your help.

For reference: I can name at least 3 project that have appeared on Kickstarter recently that have been funded at a rate of well over 150% without my help. I opted not to fund these projects (as they'#re already funded and my money may go to other worthy causes), yet the art is being created. In other words: my contribution was optional.

"You have to get something tangible in return for your cash."

No you don't. Read how it works again, and think.

"Otherwise the security laws kick in."

Charity is illegal now? I can't help fund a project without demanding a tangible object in return? I can't merely donate without demanding anything except that the art exists at the end of the process? Weird.

"The work doesn't get done and you don't pay the cash."

So, I've not lost anything and the artists are not in a position where they're obligated to continue with a project that's not fully funded and may not have the expected market later on. This is a bad thing to you?

"If people don't pay, a big wall blocks everything. "

That's better than "if a big corporation don't think the work is commercial enough, they block it". I fail to see how this can be a problem, unless you're indebted to the traditional gatekeepers who are becoming less and less relevant.
[ link to this | view in thread ]
PaulT (profile), 28 Feb 2012 @ 7:52am

Re: Re: Re: Another Paywall
"When you buy into a kickstarter project, you take a risk that it will be what you expect. Sometimes it will be better but sometimes it will be terrible. Everyone doesn't win every time."

When I buy into a product that's produced by the traditional industry, I take a risk that it will be what I expect. Sometimes it will be better but sometimes it will be terrible. Everyone doesn't win every time.

Is this the best you have? Your objections would appear to be criticisms that can be levelled against any traditional model, except I would have more direct influence - both on what's produced and in some cases the actual content. This is a bad thing?

"There will be some great projects but there will be some that just don't turn out the way the sales copy promised."

Again, this is different from misleading sales blurb, trailers that misrepresent the film's content, singles that don't represent the content of the album, buggy games that don't work properly until the 4th patch, and so forth?

"The Kickstarter board has to approve every appeal that is made public. They reject a fair amount."

I'd like a citation on this, pls.
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 7:54am

Umm, a little misleading here, don't you think?

Kickstarter people are pledging against a future product and special perks they expect to receive. If you deduct the theoretical value of the goods to be received, I suspect you are looking at only a few million net "endowment", and the rest is just a special way of doing pre-sales.

Not quite the same thing - nice try Mike. I trust that they will keep the link to your site up for another month as a result of this post.
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 8:14am

Re:
More like when it green lights Dude Where's My Car 2 or Weekend at Bernie's 3
[ link to this | view in thread ]
E. Zachary Knight (profile), 28 Feb 2012 @ 8:18am

Re: Re: Re: Another Paywall
Wow. You sure get fooled by the hype, don't you?

Apparently, not as bad as you.

When you buy into a kickstarter project, you take a risk that it will be what you expect. Sometimes it will be better but sometimes it will be terrible. Everyone doesn't win every time.

That is a risk that a whole lot of people are willing to accept. Of course the Risk is not blind. Most Kickstarter projects have creators who have done something in the past to show that they can complete the project and make it to the expectations of the funders. But either way, there is risk involved, but it is acceptable risk. If the risk was not acceptable, the project will nto get funded (which a lot don't)

Mark my words: there will big complaints about fraud and misrepresentation with Kickstarter. There will be some great projects but there will be some that just don't turn out the way the sales copy promised. The consumer loses the usual protection that comes from seeing a finished product and waiting for reviews.

Complaints are nothing new. People complain about a lot of things. But again, that is a risk that both the creator and the funder accept. As for the "protection" brought about by reviews, I will simply point you to the 10 point scale of games reviews that in actual fact has a floor of 7/10. Hardly a very effective way to protect the consumer.

And don't be so sure about the lack of control of a single entity. The Kickstarter board has to approve every appeal that is made public. They reject a fair amount. So if you don't play by their rules, you can't reach the crowd. Oh sure, you can set up your own website but you could always do that.

I don't deny that Kickstarter holds some editorial control on what projects are accepted. That is their right as they control the site. However, the only option is not just creating your own site (although that is a good one too) there are plenty of other crowd funding sites out there. One commenter here pointed to Indiegogo as another similar site.

But again, you are confusing Kickstarter as the "solution" that we propose to replace legacy gatekeepers. It is simply one example of how art can be funded without signing your life away to a gatekeeper. There are still plenty of other ways to make money and make art.
[ link to this | view in thread ]
E. Zachary Knight (profile), 28 Feb 2012 @ 8:21am

Re: Re: Re: Re: Another Paywall
bob is right on that last one. Kickstarter approves all campaigns run on their site. They do reject quite a few. If the project does not meet these guidelines, it wil be rejected:

http://www.kickstarter.com/help/guidelines?ref=footer
[ link to this | view in thread ]
Viln (profile), 28 Feb 2012 @ 8:28am

Re: Re: Re: Another Paywall
"When you buy into a kickstarter project, you take a risk that it will be what you expect."

The word "Kickstarter" is extraneous to the truth of that statement.

"Mark my words: there will big complaints about fraud and misrepresentation with Kickstarter."

There will be complaints about misrepresentation against creators who are hosted by kickstarter. Just as there are against freelance coders on contract sites. Just as there are against anyone with whom you form a contract when the result is not to your satisfaction. It states quite clearly on the site that you are not making an investment with a specific and guaranteed return... it's more like very specifically-directed charity.

I don't actively use Kickstarter, but honestly... do you have a single legitimate complaint against their model that doesn't also apply to the universe at large?
[ link to this | view in thread ]
The eejit (profile), 28 Feb 2012 @ 9:03am

Re:
WE already have htree projects hitting over $1m in hte last month alone. There's been a number of projects at the many hundreds of thousands stage. Kickstarter will be one of a number of ways forward for budding artists the world over.

And that last line is rather amusing. Thought you should know that.
[ link to this | view in thread ]
Hephaestus (profile), 28 Feb 2012 @ 9:09am

Re: Re:
Aren't they at weekend at Bernie's 12 already ;)
[ link to this | view in thread ]
Bryan Price (profile), 28 Feb 2012 @ 9:55am

Kickstarter has it's own problems.
I have donated to a few Kickstarter projects, all of which have made their cutoffs.

But one of them won't be getting my money, not through Kickstarter. I signed up for Go GloSpex, which far exceeded its goal, was just about to close, and Kickstarter canceled it. No explanation was given to me (others that have gotten a response say that Kickstarter does not comment on why some projects get canceled), and nothing has even been told the project starters!

https://twitter.com/#!/GoGloSpex/status/172385407474999297

Kickstarter is being quite opaque on this project, and apparently other projects as well. If the project violated the TOS, they should be able to explain at least to the project starters what the issue is, and it shouldn't be right before the project is due to close in any case.
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 10:15am

Re: Re:
It doesn't matter how much they hit - they aren't a cash giveaway - they are pre-selling products.

Take away the actual value of the products, and how much actual free cash is generated?
[ link to this | view in thread ]
Colin, 28 Feb 2012 @ 10:45am

Re:
How is it misleading? The article is about funding amount, not charity or profit or anything. People will (usually) get something for what they give, but that doesn't change the fact that they're giving it.
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 11:31am

Megaupload also provided an alternative way for artists to make money but Hollywood couldn't have that ...
[ link to this | view in thread ]
David Rorabaugh, 28 Feb 2012 @ 12:05pm

proportion of arts funding?
Has anyone seen a breakdown on how much of Kickstarter's funding or how many of Kickstarter's projects are arts-related? I've funded three: watchbands, power tools, and kinetic sculptures. Before comparing to NEA, I'd like to know the splits...
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 2:27pm

Re: Re: Another Paywall
Quote:
Imagine how many more creators could eat and enjoy health insurance (as a side note, who really "enjoys" dealing with health insurance?) if more doors were open to them than closed?

You mean like the creator of Dick Tracy, Warren Beatty?

http://www.thirdage.com/news/warren-beatty-wins-dick-tracy-dispute_3-26-2011

Oops, Warren Beatty is not the creator is it?

Quote:
In May 2005, Beatty sued Tribune Co. for $30 million in damages, claiming he still maintains the rights to Dick Tracy. Beatty received the rights in 1985 and claimed that Tribune moved to reclaim them in violation of various notification procedures. There was talk of a sequel, and Beatty did express interest in reprising the part, but the sequel was sidelined by unexpected legal disputes. In March 2009, Tribune filed suit against Beatty, saying that Beatty had "made no productive use" of the rights for over a decade, causing them to revert back to Tribune.[6]

Source: Wikipedia: Warren Beatty - Tribune Lawsuit
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 2:28pm

Re: Re: Re:
Wait until it gets to Ghost Rider 13 then you see how bad things get.
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 2:32pm

Re: Re: Re: Another Paywall
Oops, answer fail!

It was meant to bob.
[ link to this | view in thread ]
Anonymous Coward, 28 Feb 2012 @ 7:57pm

Re: Re: Re:
Why is "free cash" important here? This is about artists getting the money they need to keep creating. If that money comes from the National Endowment for the Arts, fine. If it comes from Kickstarter, that's another great avenue. Sure, Kickstarter is not an "endowment" but it still means that artists receive the money they need to create. Yes, some of that money will go to printing, pressing, fabricating, and otherwise manufacturing the rewards for backers, but lets not forget that artists can budget what they need to film their movie, record the album, eat, pay the rent (or go "A Year Without Rent" in one case) into their funding goal. The NEA is a great thing to have, and Kickstarter is another great thing, and it's good to see them reaching the same scale as the NEA. That's what the article is about, how Kickstarter is growing, not that Kickstarter is synonymous with or a replacement for the NEA or others.
[ link to this | view in thread ]
Anonymous Coward, 29 Feb 2012 @ 3:08am

Re: Re: Re:
That depends entirely on what you were expecting or looking for when you went to watch it. I was lucky and learned beforehand that it was anything but serious, so I treated it as such, hence, only small disappointment. Had I expected it to be as serious as the first, then yeah, I would have certainly considered it to be horrible.
[ link to this | view in thread ]
TJM, 4 Mar 2012 @ 4:59am

Re: Re: Another Paywall
Clear, concise and convincing! This is a good comment!
[ link to this | view in thread ]