Film Crowdfunding 2.0: An Indie Studio Got 60,000 Fans to Invest $25 Million. How?
Players like Legion M, Bleecker Street and Eli Roth’s Horror Section are turning to ‘fan-vestors’ to finance films and activate audiences
I cover top dealmakers for paid subscribers. I wrote about animation’s box office boom, who’s scoring big feature film deals now and Hollywood’s coming mid-market M&A frenzy, and I interviewed WME’s indie film co-head Deborah McIntosh.
Every conversation I’ve had with people working in the industry this year — regardless of the intended topic — inevitably turns to three concerns:
The contraction in content spending
The desperation to break through the noise and attract audience attention
The impact of generative AI on all aspects of filmed entertainment.
My column today centers on the intersection of the first two — funding storytelling and engaging fans — and maps out how the third might come into play.
We’re talking about crowdfunding, but not your typical Kickstarter campaigns. The new iteration of fan funding trades cash for equity, not just perks.
When Legion M launched as a fan-owned entertainment company in 2016, co-founder and president Jeff Annison says Hollywood was trepidatious and consumers were confused. “They knew Kickstarter and they were like, ‘Wait, you can’t get returns from a Kickstarter project,’” he tells me. “This is a fundamentally different proposition. This isn’t, Hey, will you support my project? It’s, Do you want to be a part of my project?”
It’s not the first time he and co-founder Paul Scanlan set out to disrupt the industry. Back in 1999, they wanted to put TV on cell phones and people thought they were crazy. But, just a few years later, their startup MobiTV had partnerships with major mobile carriers like AT&T, T-Mobile and Sprint, and they earned an Emmy for innovation in television. (MobiTV’s assets were bought by TiVo out of bankruptcy in 2021; Annison and Scanlan left the company in 2009 and 2015, respectively.)
Ten years into their current endeavor Scanlan is more bullish than ever: “We want to unite a million people to co-own our company and then take over Hollywood.”
With 60,000 investors so far and more than $25 million raised, Legion M is the biggest of its kind, but it’s not the only studio giving fan-funding a shot.
This year alone on Republic, a global platform for investing in private companies and digital assets: Eli Roth’s The Horror Section raised more than $6.1 million from about 2,500 investors; Robert Rodriguez’s action label Brass Knuckle Films raised $2 million from almost 2,200 investors; and Ron Perlman’s Watrfall raised $1 million from more than 1,100 investors.
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With all this activity, I decided to dig in and find out what kind of potential there is for these models to take off in a bigger way. I talked with dealmakers including Annison and Scanlan, Bleecker Street CEO Kent Sanderson and Roth’s The Horror Section co-founder, Jon Schnaars, about the evolution of film crowdfunding to create a guide for anyone in the industry who’s thinking about launching or backing one of these fan-fueled endeavors.
Today, I’ll cover:
The hangover from Kickstarter’s false start in Hollywood (remember that Veronica Mars campaign?)
How an Obama-era law rewrote the rules for film crowdfunding
Why studios like Bleecker Street are betting on the model — and what they need to get on board
Why horror and other genre fandoms could be fan funding’s sweet spot
What talent reps and attorneys are watching — and worrying about — as fan funding grows
Fan funders’ risk tolerance and marketing power — and what it all means for original film ideas
AI’s potential to launch crowdfunding into the mainstream