The importance of signaling and Kickstarter: It’s not just the money

Movie star Zach Braff raised two million dollars on Kickstarter, and in the process a bunch of people on the Internet (and some who should know better) wrote critical commentary—this Reddit post is a decent summary of the slightly angry “Why is a rich celebrity seeking other people’s money?” point of view. Some people also used the Kickstarter to write reasonable, illuminating commentary, as Dan Lewis did in “Zach Braff, Amanda Palmer, and the New 90-9-1 Rule: The Indifferent, the Haters, and the Ones who Love You.

But, for the most part, one important and subtle factor about Kickstarter got lost: Kickstarter functions as an easy-to-use signaling mechanism. Lots of people on Internet forums and real life say, “I want to see Garden State II or Season 3 of popular TV show X” or whatever. But the cliché is true: talk is cheap, and lots of people will say lots of things when they have nothing at stake.

Kickstarter, however, lets people put their money where their mouths are: instead of saying, “I want to see or read X,” they can say, “I want to see or read X so bad that I’m willing to pay $10 to make it happen.” That $10 is much louder than 10,000 posts. The money is important in and of itself, yes, but it also demonstrates that your fans care enough to give the creator something valuable.

Although I didn’t especially care for Garden State when I saw it in college, I can see why it appeals. My favorite movies are definitely worth way more to me than the relatively small amount of money I paid to see them. (Or, as economists would say in their racy, lascivious language, my consumer surplus is high, while it was pretty low for a movie like Spring Breakers and outright negative for awful movies.) How much is a movie like Blade Runner or the underrated Kiss Kiss Bang Bang worth to me? I don’t know, but if the team behind a movie Kiss Kiss Bang Bang wanted to make another movie and tried Kickstarter, I’d give them some money (in Lewis’s term, I’m somewhere in the 9% of people interested but not super-fans; maybe I’m in the 12th to 15th percentile).

We’re still in the infancy of crowd-source funding, and it’s possible that we’ll see crowd-source funding morph towards being seen as an important signal too, and this blog post is a step in that direction.

One response

  1. I don’t know, but if the team behind a movie [like] Kiss Kiss Bang Bang wanted to make another movie […]

    They did. It’s called Iron Man 3. ;-)

    Like

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