Cessen's Ramblings

2007 - 07 - 26

More On Project Peach: A New Business Model

My entry about being accepted onto Project Peach was short, so I'd like to take a bit to expound on my reasons for excitement. (This is also a convenient excuse to put off a little longer writing a paper for one of my classes.)

When I decided to submit my portfolio to Peach for review, it was with some reservations. To be blunt, I don't think my portfolio is that good (professionally, anyway). So I was surprised when I receive an e-mail informing me that my mission—should I choose to accept it—was to jump aboard Project Peach, and embark on a journey of craziness. Obviously, I was excited.

My excitement was (and is) three-fold:

  1. I have an awesome job, working with awesome people!
  2. I get to live in Europe for six months!
  3. I get to take part in one of the first attempts at a new business model for media production!
Contrary to what some people might expect, I am most excited about that last bit. For that reason, and because it should be obvious why I'm excited about the first two (unless you dislike Europe, which I'm pretty sure is grounds for declaring a person legally insane), I will spend the rest of this entry explaining why I am excited about this new business model.

Let me start by explaining how the current media production system works.

At present, if you wish to make a movie, you basically have three options:

  1. Be a rich bastard with large sums of money to burn.
  2. Beg a rich bastard with large sums of money to fund your project.
  3. Make a movie that costs very little to make.
In the first case, you risk losing large sums of money. In the second, you risk losing large sums of money that aren't even yours to lose. Neither of these are savory prospects. (The third case I am simply discounting because it's not relevant to this discussion.)

This means that if you are not a rich bastard, you can only start projects that some rich bastard is willing to fund. Moreover, you essentially have to go into massive debt in order to make a movie. Granted, it's not the sort of debt that you'll be held financially accountable for, but if the movie flops you're unlikely to ever get funding again.

This leads to two rather annoying problems:

  1. Well funded independent film is rare. (Read: lack of variety in movies.)
  2. If a film maker screws up badly on a film (financially), they get no second chances.
There is also a third, separate problem with our current system: piracy.

In this "digital age" of ours, movies (among other things) can be duplicated and widely distributed at virtually no cost. Why? Because they are no longer tied to physical objects. And the shear extent of the restrictions necessary to make society collectively pretend that they are physical objects is quite ridiculous.

We're already seeing this silliness manifest itself in many forms: the DMCA, DRM systems, tons of lobbying and fear mongering by the RIAA and MPAA... it's really all quite absurd. And moreover, it's not working. And it's not working because people aren't that stupid as to believe that movies are physical objects just because the law says so. The "piracy" itself isn't actually the problem, but rather the system that wasn't built to allow for it (or, indeed, embrace it).

Ultimately all of these problems (monotonous movies, "piracy", etc.) actually come down to one common problem—or rather, to one common solution: instead of thinking of movies as products to be sold, we should think of movie productions as services to be funded.

Let me repeat that once more: instead of a movie being a product to be sold, a movie production can be a service to be funded.

And that's exactly what Project Peach is doing. We aren't begging The Big Boys for loans. We're going directly to the public and saying, "Hey, if you want to see this movie get made, fund it. If not, that's cool too, don't fund it."

This has the following implications:

  1. People are directly voting with their money. No rich-bastard middle-men trying to second-guess the movie-goers. (Pardon all the hyphens.)
  2. After the movie is finished, we have no reason to forbid people from copying the movie, because we were already paid to make it.
However, there are a few problems with doing this directly as I've stated it:
  1. The people who funded the project don't get anything more than the people who didn't. Both get full access to the movie afterwards, so what's the motivation?
  2. How the hell do people know if they want to fund a movie without seeing even a glimpse of what it will be like?
  3. What guarantees do people have regarding their money? What happens if sufficient funding is never accrued? Do they just lose their twenty (or thirty, or forty...) bucks?
Peach tackles the first issue, but not the second or third. (For the record, I am about to make up a new word: funder. A funder is someone who contributes funds to a project. I like it because it rhymes with thunder.)

Peach's answer to the first issue—how to reward funders—is DVD pre-sales and giving credit. Instead of just donating money, you're actually pre-ordering a DVD, plus you get your name in the credits.

For productions other than Peach this could be taken a step further: in addition to getting your name in the credits, you also get a special-edition "You helped make the movie!" DVD that you can easily show your friends to prove you helped make it. Additionally, you get a free ticket to see the movie in theaters.

People who purchase the DVD after an initial funding period will just get an ordinary official DVD, and no ticket or credit. So this exploits both human greed and ego. If the movie is good, they get bragging rights: "I helped fund it!" Plus, they get a movie ticket at no extra cost.

Who knows, maybe there are even more ways to reward funders. But something along these lines probably makes sense.

Moving on to the second point: how do people know if they want to fund the movie? Peach completely ignores this: people just have to take it on faith that the movie will be cool. However, while this may work for Peach, it is extremely unlikely to work for most other productions. People need some way to at least glimpse what they're going to be funding.

It just so happens that there's already a convenient example for us to follow: movie trailers. The difference in this case, of course, is that the trailers will be made before the movie. A sort of mock-trailer, if you will. These mock-trailers will serve not only to show (approximately) what the movie will be like, but will also serve to verify the skill of the film maker.

Granted, these mock-trailers will themselves cost money to make, but the investment is far lower than for a whole movie. And that (comparatively) small investment will act as a sort of gate-keeper, ensuring that these people really are serious about making a film. Additionally, expectations of quality for mock-trailers will presumably be lower than for ordinary trailers: people will understand that the trailers have limited funding, and that they cannot represent the movie exactly.

There may be other ways to overcome this particular hurdle, but this seems like an obvious one.

Now for the third issue: what guarantees do people have regarding their money in the event that sufficient funding is not raised? Peach simply assumes that the movie will get enough funding. While this may make sense for an odd case like Peach, it is unlikely to work for other productions. People need assurances.

The solution is obvious from a legal standpoint: a binding contract stating that if sufficient funding (X dollars) is not raised within a certain time span (X months), everyone will be refunded their money.

The only tricky part is keeping track of and refunding the money. And ultimately that comes down to accounting. I imagine much of it could be automated, but this really is a hurdle to the whole model, because it's not an entirely trivial problem, and it is critical to making the whole system work. Down the road, if this model becomes popular, it seems likely that this will spawn an all new business in the movie-making world: businesses that do nothing but manage this funding process (for a fee and a percentage upon success, of course). But in the mean time, it will probably have to be dealt with separately by each production. Perhaps some clever software solutions will pop up.

Anyhoo... all of this stuff is why I'm excited to be a part of Peach. I feel like I'm taking part in one of the first primitive attempts at working within this new business model—a model that I hope will (in more sophisticated forms) take over the movie industry. A model that allows people to truly vote with their dollars, and also lets them share movies freely with their friends.

I certainly don't expect this to catch on quickly. Indeed, I'm quite certain that the MPAA will fight tooth-and-nail against this sort of thing. After all, they won't be needed in such a model. But I really hope things start to move in this direction.

In short, I'm really excited to be a part of this. I couldn't have asked for a better job.