Kickstarter and Market Failure

Since launching earlier today, Rob Thomas’s Kickstarter campaign to film a Veronica Mars movie has already raised more than half of its $2 million budget.

Richard Lawson at the Atlantic Wire has a provocative and interesting response. He is upset that Kickstarter is commerce masquerading as charity: Anyone Know of a Better Charity Than the ‘Veronica Mars’ Movie?

Another part of my revulsion is, yes, likely to do with the simple fact that art-related Kickstarter campaigns strip away the pretense that art and commerce aren’t inextricably linked. Money has always been part of the commercial art game, but the budgeting and haggling is usually done out of view, by a few select professionals. Kickstarter, though, puts the economic reality right out in the light for all to see. Someone like Amanda Palmer is essentially telling us that she doesn’t want to work on spec, so if we want to hear something new, we have to pay in advance.

The response is not surprising, after all, these are wealthy and successful people begging for money. But this should lead to art that feels more personal and less commercial. Ultimately, that may be better for art, culture and entertainment as a whole.

Instead of cheapening art and entertainment to ask fans to support it, this actually addresses a severe market failure in the entertainment industry.

Many fans of an artist, film or TV show are fanatical and passionate, not simply casual viewers. People dress up for conventions, buy ancillary merchandise, and create fan web sites. And in many cases, there are artistic endeavors that have small audiences, but those audiences are very passionate.

While millions of movie viewers are willing to spend $10 to see The Avengers or The Hunger Games, there is a demand curve. The most ardent fans would be willing to pay hundreds of dollars to see the movie, while many casual viewers will not consider going to the movie if their local theater raises the price of a ticket from $10 to $11.

The traditional film financing system does not have a market to test the demand. Given the number of people who watched Veronica Mars on UPN, there’s no way that Warner Brothers would finance a Veronica Mars film if the only metric to test its success is in selling regular price movie tickets. But the Veronica Mars fans are more passionate that, on average, many would be willing to pay more than the regular price of a ticket to see the film.

Is it really so distasteful that the market is enabling creators to make films that thousands of people are willing to spend $100 and more to love rather than entertainment dumbed down and/or inoffensive enough that the requisite millions of people will be willing to spend $10, but no more, to merely watch? True, money is not the best arbiter of quality — reporting on a film’s success based on the amount of money it takes in at the box office shouldn’t make sense outside of the pages of Variety — but that individuals are willing to spend more does and should show that the fans are passionate.

By solving this market failure, Kickstarter (and Indiegogo et. al.) are making a more efficient arts marketplace, which should please both fans and creators. By connecting creators directly with the fans, the fans know that the money that they’re spending on entertainment is going directly and proportionally to the people who are creating that entertainment.

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