Getting Rich on Social Media

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Posted under: Digital Natives 22nd of April, 2014

Kickstarter is a social media site that serves as a platform for crowdfunding, a method by which creators can receive support for their pieces of work from the people who want them. Over $1 billion has been pledged to Kickstarter projects, with $874 million going to successfully funded projects (Kickstarter, 2014). Users who create projects on Kickstarter incentivise consumers to support them by offering rewards in different tiers according to the amount of money pledged, most rewards generally being the finished project as a special edition, or limited edition apparel. 44% of all Kickstarter projects have been successfully funded, this relatively high rate resulting from the ability of Kickstarter project creators to modify their projects to respond to their consumers’ needs. The direct line of communication Kickstarter provides facilitates this, and those who utilise it are successful. “The losers are detached from their customers because they are unable to hear the outpouring of ideas and feedback over the drone of their antiquated toiling. Conversely, the winners are tapping into consumer needs and wants…” Lovett.

This method of financing media projects ensures that there is an audience for a product, and more specifically an audience that will pay for that product. Zach Braff is one example of someone who has successfully applied crowdfunding to their project.

Asking for $2 million on April 24th 2013, Zach Braff’s film project successfully reached its funding goal and exceeded it by $1.1 million, 30 days after the project began (Zach Braff, 2014). Braff’s project is one of 58 successfully funded Kickstarter projects which produced more than $1 million for the project creator. Braff states in his Kickstarter video that he was inspired by another successful project, the Veronica Mars movie project which was successfully funded $5.7 million a month before Braff created his project. Braff (2013) goes on to say, “I couldn’t help but think, like so many others, ‘maybe this could be a new paradigm for filmmakers who want to make smaller, personal films, without having to sign away any of their artistic freedom.’” While the benefits of Kickstarter are clear in how it supports creators to connect with their audience, it also has the potential to enable scammers.

Only Kickstarter projects that achieve their funding goal receive the pledged money, but not all successfully funded projects succeed as a project itself. In some cases, project creators have been unable to start production and update their backers on the failed status, such as a tabletop game that raised $122,874 (The Forking Path, Co, 2013), or a video game that raised $28,739 (Dakan, 2013). While both of these creators spoke to their backers and promised refunds, other projects were successfully backed but haven’t been updated for years in some cases, including projects for high definition recording glasses which raised $343,415 (ZionEyez Team, 2014), or a physically lockable USB stick which was funded $196,404 (Cryptrade Inc., 2014).

But be wary – Susceptibility to scams is the major drawback with Kickstarter, as the backer trusts the project creator to be honest and passionate about their project.

 

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