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Friday, April 25, 2008

Internet Film Financing: Evaluating the Options

Let’s have a look at the three sites that aim to help filmmakers raise money for their projects online, all of which are at a pretty early stage of development.

My only criteria was that they’re open to any filmmaker (I didn’t include sites that are raising money for one specific project, like I’m not endorsing any of these companies, just reporting on what they’re up to. If any of you CinemaTech readers have comments, or experiences with any of the companies, please post below.

1. IndieGoGo

In its first few months of operation, IndieGoGo has helped two films raise $10,000 each; in neither case was the $10,000 the film’s complete budget, but rather a “first round” of funding. Financial contributors may be rewarded with invites to wrap parties, DVD copies of the film, film credits, or signed memorabilia. Creating a project profile for a film is free, but once the financial goal is reached, IndieGoGo takes a nine percent cut. Filmmakers can post any material they like – some, like a budget or script, may be password-protected in a private area for certain potential contributors. Non-profit enterprises can use IndieGoGo to solicit tax-deductible donations, too.

2. ArtistShare

Used so far mostly by musicians, ArtistShare is allowing at least one filmmaker, Paul Devlin, to raise money on the site for his “science-adventure” doc ‘Blast.’ Donors can pre-purchase the DVD ($49.99) or, for $150,000 go out to dinner with the filmmaker and star of the movie, get a personal lecture from the star, and be listed as an Executive Producer. ArtistShare charges a set-up fee for all accounts, plus a monthly fee, in order to be able to raise funds through the site. Unclear how open they are to helping other film/video projects raise money. Rick Moranis has used ArtistShare, as have jazz guitarist Jim Hall, Phish co-founder Trey Anastasio, and Maria Schneider, who won a Grammy this year for “Best Instrumental Composition.”

3. IndieMaverick

IndieMaverick, based in the UK, is the only one of the three sites that hopes to offer investors in a film a positive financial return if the film does well. Filmmakers can raise as much as $1.5 million for a project, but if the budget is over $50,000, they need to meet with IndieMaverick employee in person “to ensure the filmmakers are not fraudulent and to assess if they can make the film for the budget they have requested,” according to the site. Filmmakers are responsible for their own distribution deals when they’re done, and they agree to split any profits with IndieMaverick investors, 30/70. (Filmmaker keeps 30 percent.) All investors also receive “limited-edition DVDs.” How does IndieMaverick make money? Through advertising on the Web site, interest on the funds invested, and uploading costs, they say. IndieMaverick also reserves the right to sell the completed film as an Internet download after the theatrical or DVD release has taken place. One feature, ‘Run With Me,’ has raised $232,000 on the site, and another, ‘Putnam County Law,’ has raised $32,000. But filmmakers are allowed to include previously-committed funds in their total.

Two other sites are worth a look, for smaller projects: HaveMoneyWillVlog (geared to video bloggers trying to raise $2000 to $3000 for a special project….but site is currently on hiatus) and Fundable.

Update: FilmRiot, based in Canada, and IndieShares, in Seattle, are also trying to get some momentum with online film financing.

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