Caroline Pauwels

Crowdfunding The Movies: A Business Analysis of Crowdfinanced Moviemaking in Small Geographical Markets

Abstract In this paper the business viability of a crowdfunding platform for movie production in a small geographical region is assessed. Based on a benchmarking study, we compiled a set of typical value-network elements, resulting in a proposed business model that employs a hybrid set of financing and revenue sources. Finally, we project this model on available data and constructed a pessimistic, neutral and optimistic scenario about the viability of such a platform. We conclude that in such a small market, it will never create the necessary revenues for the production of long feature movies. However, a crowdfunding platform could proof valuable when combined with other means of financing, for smaller movie formats.

CAN STATE AID IN THE FILM SECTOR STAND THE PROOF OF EU AND WTO LIBERALISATION EFFORTS

State aid granted to the European national film sectors has traditionally been legitimised on the basis of notions of national identity, the public interest and cultural diversity. While the economic value of these industries has contributed to their importance in the eyes of national policy-makers, this has also put state aid regimes under pressure on a European and global level, where a liberalisation agenda has come increasingly to the fore from the 1980s on. The research question raised in this article is therefore whether state aid in the film sector will be able to stand the proof of EU and WTO liberalisation efforts. Considering the evolution of primary and secondary EU legislation, as well as the on going debates within the WTO, it seems that the biggest threat to the sector’s aid regimes comes not from the regulation itself, but from the ambivalence and vagueness of its application. Not all points to a liberalising evolution however. The EU itself has set up a number of programmes intended to support the film sector, while the recent adoption of the Unesco Convention on the Protection and Promotion of the Diversity of Cultural Expressions can be seen as a counterweight as well. The actual strength and impact of these counterbalances in practice, however, is doubtful and/or unclear. The question remains therefore whether the WTO and the EU will be able to wander from their path dependent future, as a liberalist approach lies at the base of both. In consequence, political willingness will prove to be crucial in the following years, beginning with the review of present EU state aid regulation in 2007.

Belgium: Big Changes in a Small News Economy

For some time now, the news sector is believed to be in a period of deap-seated change (Preston 2009), the drivers of which are a continuously dropping audience, an evolution towards free news, failing alternative revenue models, a slow migration of advertisers to the online medium reinforced by the current economic crisis and changes in the news production process and changing patterns of news use [Preston 2009; see also Bruns (2008), Meikle and Redden (2010), Picard (2010), Heinonen (2011)].

Beyond Borders and into the Digital Era: Future-proofing European-level Film Support Schemes

The evolution of the European film industries since the Second World War goes hand in hand with the gradual set-up of a multi-level film policy framework. At the European level, the MEDIA programmes (now part of Creative Europe) and the Eurimages fund form its most prominent elements. As the film sector in Europe is in the midst of a digital transition, their further articulation will contribute to how future borders in this sector will be shaped. At the same time, the evolution of these policy instruments has to be situated within borders of their own: those between different policy-making levels, as well as those between sometimes conflicting policy objectives.

Best Frienemies Forever?” Public and Private Broadcasting Partnerships in Flanders

Relationships between public and private broadcasters have traditionally been considered highly competitive and more often than not, conflicting. However, at the same time, private and public broadcaster relationships have been symbiotic as well. Since the liberalisation of media markets and the advent of commercial television in the 1980s, public broadcasters have increasingly reoriented themselves to compete with private broadcasters. They have been embracing commercial broadcasting strategies consecutively leading toward a convergence of content and services (Saeys and Coppens, 2003; Tracey, 1998). In addition, public broadcasters’ legitimacy today partly rests on setting a “standard” in terms of quality and innovativeness. In other words: it should lead private players by example (Donders and Van den Bulck, 2012). In recent years, policymakers have increasingly picked up on an “ecosystem” approach, encouraging different types of collaboration between public and private media broadcasters. This, so they hope, will ease arguments on alleged anti-competitive behaviour of public broadcasters and potentially help public and private broadcasters to face new competitors and related challenges in a more convincing way. Such a more pragmatic approach to deal with the dual broadcasting system that is dominant in Europe (Harcourt, 2005) has especially been followed in smaller media markets like Flanders (i.e. the northern part of Belgium).

Supporting Film Distribution in Europe: Why Is Overcoming National Barriers so Difficult?

MEDIA and Eurimages are well-known supranational programs of the European Commission and the Council of Europe which aim at promoting the European film industry by encouraging the production and distribution of films and fostering cooperation between professionals. National film funds, however, still remain the most important mechanisms for supporting film in Europe. Typically, these funds prioritize support to film production over distribution in a national context. This chapter investigates the extent to which national support schemes have included measures to enable cross-border distribution, to what extent these support measures take the form of direct or indirect forms of support, and how differences in support mechanisms applied have been accentuated over time in the European Union. We find clear improvements of smaller nations in developing support mechanisms that target both domestic and cross-border distribution. Nevertheless, domestic production remains the dominant support focus of national film funds, with distribution support being restricted to promotion and marketing rather than substantial support for theaters, retailing, and online.

The European Commission’s Approach to Film Funding: Striking a Difficult Balance

Audiovisual works, in particular films, play an important role in shaping European identities and reflecting the EU’s cultural diversity. This chapter looks at the European Commission’s activities in relation to public film funding. It begins with a historic overview of the objectives of the European Commission in its approach to the audiovisual sector. It then turns to the concrete realizations of the Commission via its own funding programmes (the MEDIA programme) as well as through its State aid control of Member States’ financing schemes.

Crowdfunding Movies: A Business Model Analysis from Strategic Management Studies

A crowdfunding platform for movies is an alternative way of refunding movie production costs. Usually, such platform combines several types of funding, including sourcing the Internet community to gather small private donations, that is, a revenue stream which is typically named “crowdfunding”. In this chapter, we apply the framework of business model analysis to review this crowdfunding mechanism. We describe the business model characteristics of several industry cases. Next, we decide whether such a crowdfunding platform can sustain itself and whether it is able to collect sufficient funds for the production of movies. We argue that the platform could obtain enough funds from the general public for smaller-budget productions such as short films or documentaries. A movie crowdfunding platform could also collect enough income from advertising to make itself sustainable. Charging a premium membership fee to movie producers would yield negligible revenues and is hence not advisable. Further, we find that the platform will never amass the needed production budget in a small market, especially for the production of long feature films. However, a crowdfunding platform could be more valuable when combined with other means of financing smaller movie formats and could perform a marketing purpose alongside its central crowdfunding role.