Crowdfunding Movies: A Business Model Analysis from Strategic Management Studies

Abstract

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.