Crowd-funding is an emerging media business model that raises cash online from many small investers to support the production and distribution of content. Proponents of crowd-funding argue that it lets content users buy into a creative project at its inception, tapping into a pool of supporters and fans who have an interest in the project. It provides an alternative source of funds and investment, particularly in the movie industry, where multi-million dollar production budgets and limited distribution networks have traditionally limited funding to a handful of studios, banks, and big investors.
Crowd-funding has supported two of the Palm d'Or (best picture award) contenders at this year's Cannes Film Festival ("Habemus Papem" & "Polisse"), as French crowd-funding site PeopleforCinema raised the capital to produce and distribute the films.
Crowd-funding is making other inroads as a financial model for media content and distribution. Two sites have been established in the U.S. to provide crowd-funding opportunities for creative artists and projects. Both Kickstarter and Rockethub post opportunities to support the production and distribution of creative projects. And Spot.us has been using a crowd-sourcing model to support independent online journalism.
The older media funding models worked fairly well for "commercial" and general-interest content, and may still be the best model for funding high-cost productions. Crowd-sourcing offers creators an alternative funding model that bypasses traditional media gatekeepers, particularly those whose focus is on producing content of high commercial value. It can particularly target minority and non-commercial interests, and tap into a highly supportive fan base for content and artists in more focused areas. Look for crowd-funding to increase as creative content diversifies, providing a more fertile field for cultivating creative artists and content.
Source: "Buy! Sell! Crowd-funding helps boost Cannes films", Broadcast Newsroom