The Missing Piece of Crowdfunding

I’ve written previously about the benefits of crowdfunding as a way to finance projects without debt. Today I’d like to talk about the broader implications of crowdfunding and its place in the new economy.

Media distribution has been radicalized in the past decade and physical goods aren’t far behind. It is now possible to move content directly, digitally without the need for retail storefronts or shipping services. Moreover the centralization of digital goods on a handful of platforms ensures one-stop shopping for some time to come. For new artists, authors, filmmakers, and other content producers, there is no longer a barrier to reaching the marketplace. This will undoubtedly open variety of niche markets hitherto unimagined and enable smaller communities to curate their own media presence. However, this deluge of new media also dramatically changes the field of play for marketers and producers. While more readily available specialized content will certainly attract new buyers, more traditional consumers will have difficulty selecting from such a broad variety of new options. Mainstream information sources are ill-equipped to provide coverage for the number of releases with which they will be inundated.

Advertising has traditionally relied on cultivating consumer awareness of media events, rather than promoting the objective merits of individual projects. Billboard advertising, for example, cannot easily communicate much about a film or album other than identify famous participants. In a new environment with many, many more participants, relevant individuals may become more difficult to identify.

Music, film, and fiction critics already have difficulty keeping up with users ‘doing their jobs for free’ online faster and more efficiently directly to their own communities. Combined with the decline in print media, creatives can no longer look to reviewers for support in publicizing their projects. This problem is doubly significant for crowdfunded projects who must attract attention in advance of the relevant work having been created. A large audience of dedicated supporters willing to donate capital must be cultivated early for a crowdfunded project to see the light of day. As I’ve also written before, these early-stage partners are also a great tool for success. Whether financially or emotionally invested, contributors who feel like part of a project are more likely to evangelize it. A good supporter is like a smart-bomb or a virus: s/he is able to target potential consumers within his/her community and social network with far greater accuracy than a marketer.

While the importance of supporters cannot be overestimated, a new breed of marketing firm is needed. Generating the necessary interest for early-stage project funding can be incredibly difficulty. Today most crowdfunding platforms emulate the early days of YouTube. The limited amount of quality content enables the few standout programs to be highlighted and evangelized more than would be expected in a broader marketplace. As crowdfunding grows in popularity, so will supporters discrimination. Projects that lack the necessary spark and good fortune to be named flavor of the day face harsher odds of meeting with success during their fundraising window. A marketing group with a comprehensive understanding of digital communication, social media, new distribution systems, fundraising, and a familiarity with traditional media could both serve new projects and creators well and generate massive revenue. As with any new frontier there are incredible profits to be collected, and the systems currently evolving will certainly supplant existing models and take with them the associated cashflow.