I wanted to do a little followup on the Veronica Mars Kickstarter. Yeah, they made goal. You can see the current numbers below.

Hey, you could even click on it to toss in a few bucks. I did.

But that isn’t to say that I think the setup is problem-free. I mean, there are issues and it does no one any good to gloss over them.

For example, at the time I’m writing this, Rob Thomas et al are going to have to make and ship over 40,000 “limited edition” T-shirts. That has to happen even if not one more person makes a pledge. They’re also looking at 4500 signed (by the cast) movie posters so far. You want to talk about signing your name seven thousand times (which is the limit for that reward)? I sure wouldn’t want to do it.

So… yeah. That sort of order fulfillment could be a huge drain on time and resources, even if you bring in a couple of out-of-work people (or actors, even) to handle it for you. He’s going to need his own clothing unit. And assuming they max out the poster reward (which looks pretty likely) and that it takes five seconds to sign one poster and move to the next, each actor is looking at over nine and a half hours to sign them all.

No writing hand was made to handle all of that. Just one hour would bring on cramps.

But that’s minor stuff. A great many people have been complaining that this project is just a way for a major corporation (in this case, Warner Brothers) to crowdsource production costs for their new movie. Is this the wave of the future? Will studios “hold their properties hostage” until the fans pony up?

It’s doubtful. The Veronica Mars Kickstarter is doing very well because it has a solid fan base. Also, it’s first. There’s a power in novelty when you’re asking people to give you money, and if it keeps happening again and again, there just won’t be much buzz around it.

Unless it’s THUNDARR THE BARBARIAN. Thundarr will always get buzz.

I can certainly see studios and production companies turning to crowdsourcing to decide if they want to re-up for another season, or bring the old gang back for a movie. Loved VR-5 and want to bring it back? Throw money at the Kickstater! and if it doesn’t happen the studio doesn’t have to be bad guy any more. They can just say: “The fan base wasn’t there. We only made 48% of goal.”

As for turning to fans for money that studios could put up themselves, the studios already do this in spades. They make foreign rights deals, they bring in outside investors, etc. It’s always been a part of doing business.

The big difference is that those investors get actual cash money once the film makes a profit. Fans, not so much.

Would I like to see that changed? Yeah, absolutely, but it’s not as simple as it sounds.

About ten years ago, my buddy and I were planning to make a movie. It was going to be a solid horror film–scary but not stupid–and we hoped it would open some doors for us. (Spoiler! It didn’t). As we were planning it, I did some research on how producers raise funds.

It turned out that there were all these restrictions on where the money could come from and who could donate. As I recall (a decade later) the budget would have to be split into X number of even pieces and each donor would be limited to that amount. There were more rules, too, and they were complicated and annoying. That’s when I realized I was a novelist.

(Digression: How it came out: The director sort of pushed me, the writer, out. He got the money from somewhere. The movie was seriously flawed and went nowhere. The script wasn’t my best but it is online: pdf or shitty html. It’s not my best work)

The point being, there are very strict rules around asking people to invest in your project for a cut of the profits.

However! The Jumpstart Our Business Startups Act (aka the JOBS Act) which was signed into law last year, contains provisions for crowdsourcing an investment in a company, not just in a particular project/product. You can read a description of the law here but just to touch on a few issues, investors are limited to 5% or 10% of their annual income, companies must use an established third party to run things, a great many disclosures are required, and the goal is $1million or less, so it’s not going to work for television anyway. While the law was passed last year, the crowdfunding part is not yet active because the SEC hasn’t finished drawing up a set of rules yet.

So, yes, a corporation is offloading a sizable part of their costs on this project to the fans, but they offload costs as a part of their every day business, and there’s no legal framework in place to allow the fans to invest directly. They only have the option to pledge for rewards, which is essentially preordering the end product, plus swag.

Will this become the model of the future? I doubt it, but even if it did it would be a terrific hedge against piracy and a fine reason to ditch DRM (not that there aren’t already many, many reasons to ditch DRM). Companies wouldn’t have to worry so much about their product being torrented if the true fans had already chipped in.