23 Jun CROWDFUNDING A CHINESE FILM
As China cools on Hollywood, why not consider crowdfunding your next China project?
What is crowdfunding? It’s the process of funding a venture or project by raising small amounts of money from a large number of people. This is typically done via the internet.
To Illustrate how traditional funding models are changing – the article Entertainment Finance: Where Will the Money Come From? highlights several key points. Bennett Pozil, Executive Vice President and Head of Corporate Banking at East West Bank was quoted saying: “There’s a huge change that’s going on from our traditional models to non-traditional models of entertainment finance.”
In addition, Mr. Pozil added that crowdfunding assists low-budget films, new filmmakers, and independent productions to enter the mainstream.
Furthermore, Mr. Pozil highlighted the fact that content is no longer limited to theatrical releases. The industry is now looking at streaming companies “with on Netflix to secure better long-term value.” Mr. Pozil also pointed out that China’s capital outflows remain uncertain.
Moreover, in the article China’s Booming Equity Crowdfunding Industry: What Happened In The Past Year? Huang Xiangping, the former chairperson of Securities Association of China, echoed this idea. He suggested it is the most effective way to solve the problems of financing difficulties for small and micro businesses.
The article highlighted the difference in crowdfunding types and platforms with this chart.
The Future Looks Bright
In The Rise of China’s Crowdfunding Potential article, it reported that China is estimated to generate 52 percent of the global total in crowdfunding by 2025. The article surveyed 283 crowdfunding platforms. It discovered the majority (69%) of funded projects are reward-based projects. This is where reward-based crowdfunding, where participants were given incentives in return for donations.
HOW IS CROWDFUNDING IN CHINA DIFFERENT?
First, many sites have a specialized focus. The article pointed out that “Dreamore raises funds for art, culture, and public welfare projects, Musikid serves as a platform for music-related projects. Tao Meng funds amateur filmmakers and can also recruit crew for proposed projects.” Many of these sites offer goods (a DVD, or book etc.) in return for a donation.
WHERE TO START?
EQUITY CROWDFUNDING SITES
Baidu Crowdfunding Is attached to Baidu Wallet, the online payment brand.
Demohour Operates crowdfunding projects online for smart hardware.
Kaistart Online crowdfunding for personalized products.
Dreamore Is an all or nothing crowdfunding model.
Fundator This is another all or nothing crowdfunding model. (This site is also in English).
Tao Meng An online crowdfunding site to fund amateur filmmakers and recruit crews.
Musikid Focuses on music-related projects.
ZhongChou Uses a reward based platform.
FringeBacker Bilingual site facilitates creative arts, innovative industries, and charitable organizations.
Music Bee An outlet for musicians to generate buzz.
Kickstarter (Hong Kong) Focused on creativity and merchandising.
BEWARE / FRAUD
However, as crowdfunding is relatively new in China – so our its regulations. Fraud can happen. According to the article The Rise of China’s Crowdfunding Potential it highlighted one telling example. It mentioned “Ezubao, an online finance company that supposedly offered fake investment products to nearly one million investors. It pilfered over US$7.6 billion. In late 2015, local officials investigated, shut down, and discredited it as a large Ponzi scheme.”
Here are some steps you can take to begin your campaign.
Study successful and unsuccessful campaigns. In the article 5 Tips for Crowdfunding a Film or Movie – highlights what to look for in successful campaigns such as:
- Review the length and structure of the pitch video.
- Determine the rewards that are most and least popular.
- Discern how creators do updates and respond to comments.
- Check the layout of the project text (titles/images) for included and omitted information.
Additionally, other ideas you can use to build your campaign include:
- Create a landing page to build a list.
- Invent a customer avatar.
- Shoot a video.
- Assemble your team ahead of time.
- Plan to publish daily content.
- Give fans an inside peek at your project.
In summary, to start your campaign check out Chinese crowdfunding sites, know the dangers and create your campaign.
If you’re looking to crack into the Chinese crowdfunding scene and want to connect with Chinese financiers/filmmakers – join my facebook group here.