Who Owns Kickstarter Projects?


This blog hasn’t been shy about Kickstarter in the past. It’s a great service and one that enables independent creators to fund their creations in an efficient and relatively risk-free manner. Of interest to us is the animation-related projects (naturally) and with the recent success of the Cyanide & Happiness campaign, there has been much to celebrate in that regard. That said, as with any successful service, the big boys eventually come knocking and that’s where the problems begin when it comes to determining who owns Kickstarter projects once their funded.

Backers Are Technically Investors

Think about it, if you put money towards something (tangible or not) you’re really investing in its success. Projects that aim to create a physical object generally offer said project as the reward for backing. Projects concerning content also tend to offer the content (or access to it) as rewards because (naturally) people who back something want to be able to see it too.

The problem is that content projects generally depend on lots of people watching it. Those lots of people won’t be backers, they’ll be members of the general public who heard or read about it from somewhere else. Since they have nothing to do with the original Kickstarter campaign, that essentially makes the original backers investors instead of donors. Concepts such as ownership of the completed works and the nature of any copyrights associated with them have so far gone unaddressed in many Kickstarter campaigns despite the fact that they are often a sore spot in traditional models.

How This Becomes Problematic

The impetus for this post comes from Dara Naraghi who commented on the recent Veronica Mars Kickstarter campaign. If you are not familiar, the gist is that major studio Warner Bros. ‘told’ the series creator that if they could raise $2 million, the studio would consider a feature film. Needless to say, that target was blown away within hours (its at $4 million as of writing).

Dara however, sees a massive problem :

First of all, allow me to congratulate Warner Bros. for being so incredibly generous to “allow” people to give them free money, with absolutely zero risk to the studio. What great movie making folks they are. And secondly, if the phrases “met with the Warner Bros. brass” and “they agreed to allow us to take this shot” make you feel confident that the movie studio is obligated, ethically and legally, to make this movie, then you’re either the world’s biggest optimist, or stupidest investor. Seriously.

He’s right too, but the problems extend far beyond the above attempt to make a film. In the past, if you put money towards a project, you were also (generally) entitled to a share of any profits generated (its one of the founding theories of capitalism). With Kickstarter, no such guarantees exist. Essentially once a film/series is funded, you (the backer) are no longer entitled to anything beyond what you were originally promised, and even then you may be left in the lurch.

Under certain circumstances, such a scenario is acceptable though. Think an independent animator who just wants to get their film onto DVD, or the comic artist who wants to publish a book.

Those kinds of campaigns are different though as the content has already been created. The projects this post is concerned about are the ones whose goal is to fund the content itself. Problematic insofar as content tends to live on for quite a while and can generate revenue for decades after they are created. Is it really fair to the people who paid for it to see the money raised go straight into the pockets of the creators who essentially put up nothing besides the idea? (If you disagree, please by all means add a comment below.)

How This Can Lead to Abuses

While many people freely donate/invest knowing this, where it could potentially become a problem is when larger players get involved. Projects like the Cyanide and Happiness one are done by individuals with a strong connection to their fans and who gladly give the content away for free afterwards, but what if a major studio (such as Warners) did the same? Do you think they would make it freely available afterwards? Nope, not a chance. What about the money they would make from it, would that be distributed among the people who donate? Again, not a chance. Heck, Hollywood studios are already notorious for not even giving out the money their contractually obliged to. What hope to thousands of individuals have?

Naturally if you only throw $25-50 at a project chances are you won’t be too put out, but some campaigns have donors who pledge $10,000 or more! That’s certainly not a pledge but a true investment; even more so since they often come with a ‘producer’ credit.

How To Mitigate For Abuses of Kickstarter Backers

As you can probably tell, the issue here isn’t people receiving nothing, or people receiving little but rather people seeing their generosity taken advantage of. Independents keep this in mind, but larger studios certainly won’t. If Warners receives the Veronica Mars Kickstarter money, rest assured it will disappear into the black hole of development hell. Why? Because it’s 100% profit for them and having $4 million in their hands is worth a heck of a lot more than a potential $100 million box office.

The simplest and most effective way to mitigate is to simply let the content created roam free either in the public domain or (more sensibly) under a Creative Commons license. Put simply, the latter does not prohibit creators from making money, but does not preclude investors from enjoying and sharing it either.

What Do You Think?

Lastly, I want to hear what you think. Time pressures meant I was unable to contact and query the people I wanted to before writing this post, so I’m eager to hear what you think. Would you feel cheated/angry if a Kickstarter project made lots of money after you backed it? How about being told you can no longer enjoy it thanks to copyright restrictions?

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2 thoughts on “Who Owns Kickstarter Projects?”

  1. Interesting article, especially to someone currently running a campaign to get an animated short made. However, although the campaign is to create the content, there has already been a lot of money invested in it’s development which accounts for more than the target we’re trying to reach. Ideally we would like to sell it, to raise money for the next project. Definitely a tricky situation, as we wouldn’t want our backers to think we took them for granted. Quite the opposite! We couldn’t be more grateful.

    1. That’s true, and plenty of people would not object to that on the grounds that all you’re really asking for is a leg up. What concerns me is when backers are taken for granted. It doesn’t appear to have happened yet, but it’s only a matter of time.

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