Is Crowdsourcing the Future Of Film? Not really

Hollywood has gone bankrupt several times. Marvel in 1996. MGM in 2010. Relativity Media in 2015. Film technology (cameras, software) gets cheaper and more easily accessible. Great pre-conditions for digital crowds to disrupt the industry. Hold your horses, the chances of success are very low.

Collective intelligence does not create value in the movie industry

Crowds fail in the movie making business as their three key value propositions are not applicable – modularity, customer selection or talent attraction.

The secret sauce of a successful movie lies within the overall coherence of the artistic genius. Modularity, the key of crowd-disrupted industries (TopCoder in IT market), hinders movie making process. We have seen different unsuccessful attempts to introduce modularity into film production. A UK team behind 50 Kisses gathered 1870 script submissions and 127 completed films. The result? 50 writers, 50 filmmakers, and one movie with very low Imdb score (5.5). Iron Sky pursued a path to crowdsource the collective intelligence selectively. “With our film the idea was to use the community to develop ideas and issues that are problematic rather than get them working on the script. We needed lyrics for the national anthem of the moon Nazis, and I don’t speak German, so it was something we put to the community.” Crowds participated, but the overall movie scored 5.9 on Imdb.

Crowdsourcing creates value by letting customers select what they like, what they value. In the movie industry, movie goers many times do not know what they want. Moreover, it is very difficult to judge the quality unless they see a large part of the movie. This is a moment when most of the cost is already sunk and only incremental changes can be done. Crowds can bring attention to already known topics, but will never produce the next big thing.

Crowdsourced movies are pre-determined to be market for lemons. The best talent is attracted to the biggest studios as they know that this is the place where their movie has the biggest chance to succeed. Julia Roberts wants to star in a blockbuster, not a niche Kickstarter movie. What are the chanced that the top artistic talent across acting, directory, production, marketing and distribution would meet on a digital platform?

Digital crowd efforts are not strong enough to capture value in the movie industry

Crowdsourced_movies

To succeed in the theatre movie making industry, you need big audiences, great connections and big opening weekend. Crowds have not been able to compete at this level.

The traditional movie studios follow a blockbuster strategy. The value capture is based on bets spread across a balanced portfolio of 15-25 movies per year. You need big money, big teams, top talent and strong connections in the distribution market. Only the big make it even bigger. And only some of them. Tomorrow land did not attract sufficient numbers to theatres to break even despite a great cast (George Clooney), massive production budget of $190 million and major studio support (Disney).

Users innovate well when markets are small and uncertain. Digital crowds definitely help movie makers to get closer to consumers, to activate them. However, you need millions of paying spectators to recover cost. Scale matters. The most successful Kickstarter movie campaign (Veronica Mars) attracted 91,586 backers. Digital crowds of tens of thousands are not sufficient even for a low budget movie. Production of Veronica Mars, backed by Warner Brothers, cost $6 million (low-cost compared to $150 million Jurassic World). Despite the large and loyal followership (number of Imdb raters is 15% of those of Jurassic World), it was able to earn only $3.5 million in gross box office ticket sales (0.2% of Jurassic World).

The interconnected world of movie making and movie distribution presents another hurdle for crowdfunding efforts. The team behind Iron Sky comments on the UK release: “The fact that they are releasing Iron Sky for just one day (in the middle of the week) shows a great disrespect for us, the film-makers, who have been slaving to make this film as cinematic – with big special effects, sounds and great action – as possible”. It may be disrespectful, but this is the reality of the industry.

Crowdsourcing is praised for its ability to prove initial demand. Compared to consumer products, the profitable consumption of a movie in theatres is very short lived. You do not get a second chance to reiterate the “prototype” and to capture the value later. Sequels are scarce. Grassroot release may work well for artists in music industry, but works poorly for movies.

Theatre movie making is an art, a very difficult type of art. Crowds will definitely bring to life some small niche projects that could not be founded before. We saw a successful example of non-commercial initiatives such as Life in a Day, which gained 11.4 million views on YouTube. However, crowdsourcing and crowdfunding will most probably not be able to disrupt the big screen movie industry.

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9 thoughts on “Is Crowdsourcing the Future Of Film? Not really

  1. Thank you for the post! Having burnt my fingers having contributed to a crowd sourced movie I can understand where you come from when you say Crowd Sourcing is not for films! Though, I disagree with the notion that crowd sourcing for movies will not be something which is sustainable going forward. In the past, crowd sourced movies haven’t worked for all the reasons you mentioned. However, the media industry is seeing a rapid change thanks to OTT and other channels taking over. The larger than life movies will continue to be driven by large production houses because of the value they bring to the table in distribution and marketing. However, the smaller movies which for example will mostly be viewed at home on your favorite OTT channel does not require the capabilities that big movie houses bring. It gives the opportunity for the crowd to back someone making a small movie exclusively for the small screen. This is where the crowd can contribute. That said the risk of a lack of diversification does exist, and the crowd needs take a similar approach and fund, say 10 movies with smaller dollar values, than 1 movie with 10x dollar value. It will be no different from picking stocks based on the public information available.

  2. Thank you for your post. I really enjoyed it. I agree with the challenges you see regarding content creation, but I wonder if we can take a wider view on crowdsourcing. For example, I believe crowdsourcing can be a safer way to do sequels (i.e. you can secure funding for the movie before actually deciding to produce it). In addition, you could also use crowdsourcing as a differentiation factor of a movie, what if spectators could choose different endings for a movie, so people can have a personalized experience while watching the same a movie. I know this is a tough industry, but I am convinced that there are several areas where crowdsourcing could add value.

  3. I don’t understand much about film making but if art is an “industry” where only the geniuses win, then by definition the best movies will be the ones ideated by only. Then, how could the crowd provide something different?

  4. You mentioned the success of “Life in a Day” on YouTube in generating over 11m views. Why do you not think this is replicable? If a YouTube creator was able to attract a major actor, do you think we could see blockbuster success levels? Many YouTube creators have garned hugely loyal fan bases. If multiple YouTube creators joined forces, they would already have insight on what viewers want to watch, and they would have star power. If they have been successful with short videos, what is the greatest limitation to their ability to succeed with longer movies?

  5. Thanks for your post! I think you’re right that trying to craft a script or film a movie by crowdsourcing is almost always destined to fail for all the reasons you mentioned. That said, it is interesting that most major films are still pre-screened to audiences in order to get audience feedback that is then utilized during the editing process. While this is certainly not crowdsourcing as it takes place in a very select and controlled environment, it is still trying to harness the wisdom of the consumer through a survey. Wonder if you have any thoughts.

  6. Enjoyed reading this one! I never really thought of the possibility of crowd-sourcing movies but certainly heard of some of the Kickstarter campaigns such as Veronica Mars. I don’t think crowd-sourcing the whole effort (writing, casting, filming, production, promotion, etc.) is realistic today, but I do think crowd-sourcing can be particularly powerful in designing a storyline, sequel or spin-offs from which a large movie studio can take over the rights and do what they do best. I’m thinking more of an open source concept where users build a character or plot and when the studios see demonstrated interest in the crowd, they do some further research to gauge demand. The initial supporters/creators will become powerful ambassadors for the movie. This does assume that Hollywood’s creatives have the knack for spotting ideas and building them into a full-blown production (and the fact that they want to put their name on something that they didn’t originate).

  7. Great post. I’m also interested in this one. I think it’s a great thing that certain projects are getting funding that otherwise may not have done so through traditional means. It’s not just about a “market for lemons” as we discuss sometimes with these crowdfunding markets. While there is some truth to that, it may also be about innovation at the grassroots level. These experiments are useful as we all discover which crowdfunded projects will turn to be worthy of its price. As we explore, both the users and the platforms they use will become more efficient in producing valuable products, even in the entertainment industry.

  8. Agree with you that crowd-sourcing will not be the future for big block busters, but I do think that it has a market for niche markets, and because there are so many niche markets out there, do you think one could aggregate all of them unto one platform to make it the place to go for specialty films? Another point I would like to make: I think the technology in graphics and production will have huge impact on this market. It is conceivable that one day that someone in his/her basement, with the right skills, could produce pictures and sounds that could match what Hollywood could do, and then big production houses will have one less edge than these smaller players.

  9. Thank you all for the great comments, lots of food for thought!
    Overall, I believe that the crowdsourcing and crowdfunding activities will continue, however, we will not see a sustainable business model emerging. Even if it is a basement movie, the cost will be high. I understand all the OTT / direct-to-consumer points – will we ever have a model that someone will be paying per view more than a movie theatre ticket or more than a monthly Netflix subscription? Even if the cost is just $1 million and we assume $10/person (going directly to the producer, not as in the case of movie theatres where it is between 50-90%), we would need 100,000 viewers just to break even. Will the niche movies get these supporters? You would have to spend extra money on advertising in order to reach these masses. Will Netflix buy your specialty movie? I doubt it given its mainstream focus. Do you have more business thoughts on this?

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