Film Financing Per Napkin Stage

"We literally wrote the idea on the back of a serviette late one night", says UK-based film producer Lizzie Gillett. A few days later she - and film director Franny Armstrong - had raised 38,000 pounds (53,000 Euro) to develop their documentary film 'Crude: The Age of Stupid' (www.crudemovie.net) which explores the impact of global warming on five peoples' lives around the globe. "We invited lots of people we knew to a place in Soho (in central London) and presented the idea ... we raised the (money) by selling 100 'shares' ... People were investing for a mixture of reasons, but mainly because they believed in it", Gillett explains. While global warming may not be hot news, 'crowd funding' - the term used to describe people pooling money to create a larger pot to invest- is setting the cash-strapped do-it-yourself media world on fire.

Gillett and Armstrong are still fund-raising but the success they have had in raising 300,000 pounds (417,000 Euro) of the 475,000 pounds (660,000 Euro) they need - through a mixture of social events, mass email please and web donations - is not unique. US film-maker Robert Greenwald - the creative force behind the popular anti-corporate films films 'Outfoxxed' and 'Walmart: The High Cost of Low Price' - famously raised $250,000 in ten days when he decided to 'crowd fund' his 2006 film 'Iraq For Sale' (www.iraqforsale.org). Anyone who contributed had their name mentioned at the end of the film ensuring that it holds the record for the longest end credits in film history.

The film-maker is adamant that 'crowd funding' is the way forward - "identify your target audience that might be willing to help fund your work", says a representative. "Our model for success is using film to get people to take social action, but the success is in the political change not the funding. We have reached ten million people online".

Film-makers have not been the only people to capitalise on this increasingly-popular phenomenon, however. Software-writers, pop bands and even politicians have been utilising the web and the friendship networks it can generate to raise cash: Wikipedia is virtually entirely 'crowd-funded', creative industry websites like Sellaband.com have helped launch bands into the public realm with similar economic models and in 2004 Democratic presidential contender Howard Dean famously raised 61 per cent of his $50 million election war chest from small donors (much of it online).

'Crowd funding' has created such a wake however, that there are now sites devoted solely to web-based 'begging', such as Crowdfunder.com (www.crowdfunder.com).

Doctor Söoren Auer, a researcher based at the University of Pennsylvania's Computer and Information Science Department, explains that this model is open to exploitation: "I think people could misuse or abuse this system", he says. Auer is currently spearheading a crowd-funded software-writing platform called Cofundos (www.cofundos.org) which matches a real need, identified by online software users, with a programmer skills base: "The model often works with open source programming because it's useful and it either suits your requirements or not ... but our experience is that the programmers who work on these projects are not doing it to make huge profits but because the see there is a need". Creative projects and some other crowd-funded ideas, he feels, are less certain in their outcomes: "I'm very sceptical, with a piece of music or something, you don't know if you'll get the desired result".

Despite the risks of 'crowd funding' fatigue, film producer Lizzie Gillett remains up-beat about the possibilities it offers as a financial model for independent media and cites Radiohead's latest album - which was recorded without a major record label and released as a download with fans invited to pay what they wanted - as a potential way forward. "Because the project is debt-free you don't need to strike up a deal with a distributor, so we can do a big theatrical release but also do the independent sales thing as well ... any profits from the film will be shared out among those who worked on it and funded it". Having such a wide network of investors can be complex she admits but being organised is key: "Our financial structure is very complex but we've got good admin and we have been Financial Services Authority approved ... remember we've got 200 investors (in the project)".

For Gillet 'crowd funding' is a powerful tool for independent media operators which helps boost alternatives ways of operating financially: "It's all good, because it helps challenge conventional capitalism".