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I Invented Crowdfunding. Here's How It's Changed Since Then - and Where It's Headed.

By Mark Tapio Kines | Indiewire March 7, 2014 at 10:30AM

Mark Tapio Kines is the first person to employ online crowdfunding to finance a film; in 1998, he raised $150,000 in finishing funds for his debut feature "Foreign Correspondents." He writes about how crowdfunding has changed since then and his latest campaign.
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Mark Tapio Kines
Mark Tapio Kines

Mark Tapio Kines is the first person to employ online crowdfunding to finance a film; in 1998, he raised $150,000 in finishing funds for his debut feature "Foreign Correspondents." More than 15 years later, he is currently running a campaign for his third feature "Dial 9 to Get Out."

1997 was a heady time for both Hollywood and the Internet. With studio blockbusters incorporating more and more digital technology and distributors like Miramax making independent filmmakers all the rage, and with online giants like Amazon and Yahoo! becoming major corporate players, pundits began throwing around the term "convergence" – referring to the potential merger of the film world and the "dot-com" world – as if it were a self-fulfilling prophecy.

I was in the middle of all this, as both a writer/director shooting my first indie feature and as a full-time Web designer who had made sites for a number of studio releases, from "12 Monkeys" to "Happy Gilmore." In due course, I would also become a poster boy for this convergence, because of something I did in early 1998: I invented film crowdfunding.

This was not something I planned or even wanted to do. But in August 1997, my film "Foreign Correspondents" had wrapped, and was deeply in the red. We had barely gotten it in the can and were saddled with a six-figure debt. I needed a lot of money to finish the movie, but no one in the industry was interested in helping out at this late stage. I had to reach out to the world at large.

Since I was a Web designer, I knew that the Internet was one publicity channel I could explore for free. So I hired myself to design a site for the film, launched it in November 1997, and got the word out. I knew, at the time, that I was the first filmmaker to make a website for his own movie. (In 1997, there was still room for Internet firsts.) But in January 1998, I would also become the first filmmaker to finance a movie online, the moment I received the first check from a stranger who wanted to help me complete "Foreign Correspondents."

How did this all happen? The same way filmmakers who crowdfund their projects make it happen today: I emailed everybody I knew. I looked at what made my film stand out – in this case, stars Melanie Lynskey, Wil Wheaton and Corin Nemec, who had fan followings – then contacted relevant websites, asking for some love. And I just kept at it.

At some point, one of those fans – a Canadian whose family had loved Will Wheaton in "Stand By Me" – took the plunge and invested $25,000 in my film, thus becoming the world’s first "backer."

'No one had coined the term "crowd funding" yet; we just called it "raising money over the Internet."'

By chance, within days of that huge investment, forcor.com was featured on Cool Site of the Day, one of the Web’s most influential sites (it was a much smaller Internet back then). This attracted a lot more investors and donors, and by 1999, I had raised $150,000 (in the form of paper checks snail-mailed to my P.O. box), finished "Foreign Correspondents," and started to get some media attention.

No one had coined the term "crowd funding" yet; we just called it "raising money over the Internet." But in all the interviews I did, the same sentiment was shared by interviewer and interviewee alike: That soon, perhaps very soon, other indie directors would be turning to the Web in order to finance their films.

Flash Forward to 2014…

As you might guess, crowdfunding did not, in fact, take off in 1999. We can at least partly blame the dot-com crash of 2000, when the "convergence" acolytes lost their jobs and all those freshly-poor investors got scared away from throwing their money at indie filmmakers.

Slowly, however, as the economy recovered, crowdfunding would be reborn. ArtistShare, which launched in 2003, introduced the idea to music fans. In 2004, British director Franny Armstrong began a five-year-long effort to finance her pseudo-documentary "The Age of Stupid" (which, like "Foreign Correspondents," used an investment-based model, not a donation-based one). A pair of French filmmakers reportedly crowdfunded a sci fi short in 2004 as well. Then came Kiva.org, which acclimated more people to the idea of "pitching in a little.” Then came Indiegogo and Kickstarter, and here we are today.

Now that I am using Kickstarter to fund my third feature film, "Dial 9 to Get Out," I’m finding a lot of similarities, both good and bad, to my early efforts in the late '90s: You still have to bang the drum; you can't just let your campaign sit there and wait to be discovered. You still have to figure out what makes your film – and you yourself – so special, and use that as your key promotional message. (Even when mine was the only film on the Internet looking for money, convincing strangers of its specialness was a chore.) You still have to harass your friends to support you, either financially or by sharing your project with their friends. And you have to do it over and over – which, frankly, is soul-sucking.

But what has changed since 1998 – aside from the size of the Web and the number of indie filmmakers looking for cash online – is the basic mentality behind giving money to a creative stranger.

I’ll explain:

In 1998, it would have been unthinkable for a feature filmmaker like me to ask people for donations. After all, this is a for-profit enterprise – well, theoretically, anyway. No, it was investments or nothing. (I did receive a handful of donations, and I sold some glossy stills for $15 – the progenitor of today's backer rewards – but that made up just 1% of the total I raised.) But somewhere along the way, perhaps thanks to ArtistShare and Kiva, people accepted the notion of donating money to a creative professional – knowing that this person could profit from their project yet never have to share that profit with their backers.

This is a genuine sea change of thinking: bragging rights and mementos have actually superseded the desire for a return on investment.

Now that Title III of the JOBS act has officially opened the door to equity-based crowdfunding – albeit just a crack – once the law becomes simplified and more wide-reaching, I believe we will return to that model that Franny Armstrong and I both used, in which all of your backers will be investors. At that point, we might look back at our current system of donation-based crowdfunding as an odd if lovely little era when selfless, impulsive generosity was actually the norm.

This article is related to: Filmmaker Toolkit: Crowdfunding, JOBS Act, Kickstarter





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