How Kickstarter Helped Save Independent Cinemas from Digital Oblivion

By Patrick von Sychowski | February 12, 2014 1:27 am PST

Kickstarter has played a significant role in enabling small independently owned cinemas across the United States to make the transition to digital, a detailed analysis by has uncovered. Reviewing 70 campaigns to raise funds to assist with upgrades to digital projection and associated technology improvements (mainly sound), we have found that the crowdfunding platform has been used to save at least 38 cinemas across 20 US states and Canada. Spanning a period from mid-2012 to the present date, the overall success rate of Kickstarter 35mm-to-digital campaigns has been 57.6 per cent, with 38 per cent unsuccessful in hitting their funding target and 4.4 per cent cancelling their campaign, while four campaigns are still active. Digging deeper yields interesting results and lessons for how to use Kickstarter effectively to achieve the fundraising goal for switching from film to digital. With Hollywood studios ending 35mm prints distribution this year we expect to see many more small and single-screen independent cinema turn to community and crowdfunding for support.

Kickstarter has in a few short years become the go-to platform for online fundraising for a variety of projects, ranging from smartphone accessories to the Oscar-nominated documentary The Square. As Digitaltrends recently noted, “More than 3 million people pledged over $480 million to Kickstarter projects last year,’ with a total of 19,911 projects successfully meeting their funding targets.  It is should come as no surprise that small cinemas that are unable to tap VPF (virtual print fee) or other forms of Hollywood studio-supported funding mechanisms have turned to the internet to raise the money needed for buying and installing DCI-grade projectors, servers and sometimes also upgrading their sound systems. Finding all of these projects on Kickstarter is no easy task as they are not grouped together, nor does a search for terms like “digital cinema” or “digital conversion” yield all the relevant campaigns. This is because the campaigns are directed by the creators towards the potential audience and supporters, usually through social media such as Facebook and Twitter, rather than towards cinema analysts. As such, we believe that our sample is comprehensive but possibly not 100 per cent complete. Statistics of Success & Failure

There are many conclusions to be drawn from the completed campaigns, both the ones that achieved their funding target and those that failed or pulled out. In total more than $2.66m was raised from a collective goal of $2.38m by more than 25,000 backers for digitising 42 screens in 38 cinemas, with an average donation of $109. Given that the majority of cinemas that started a campaign are independent single-screen theatres, the cost of a single projector and server is largely fixed, with the amount varying depending on additional upgrades to the theatre. As such we found that the campaigns typically ranged from $35,000 to $80,000, with most asking for around $40,000 to $50,000, though there were a handful of campaigns aiming and achieving more.

In two cases in Colorado targets of no less than $150,000 targets were met, in one campaign for four digital projectors for the Denver Film Society ($176,925), while in the other was for two projectors for the Lyric in Fort Collins ($158,692). The latter also had the largest number of backers of any campaign with 2,324 people pledging their support. Yet the single highest amount raised was $195,043 (for a target of $175,000) for the Village Picture Show, Manchester, VT’s “only movie theatre,” by 1,006 backers. Notably, there was also the “Cinefamily Digital Projection & Theater Restoration!” that raised $158,541 for digitising the former Silent Movie Theatre in West Hollywood.

There were 25 campaigns that were unsuccessful in meeting their campaigns’ funding targets. Of a hoped-for $1.6m only around $200,000 was raised. This highlights the fact that almost all Kickstarter cinema digitisation campaign that failed fell well short of their target, rather than just missing out. Of the 25, only three came close to or just over 50 per cent of their target, with many not even achieving ten per cent of their goal. Interestingly the average contribution for failed campaigns was still $94, putting it very close to the average of $109 for the campaigns that succeeded. A further three campaigns were cancelled before they finished, while four are still active, with two of these looking likely to meet their target.

Rewards and Incentives

The most prominent reason for pledging to these campaigns is obvious from their titles: ‘SOS: Help Storyville Cinema convert to digital!’, ‘Tivoli Cinemas in Westport: Go Digital or Go Dark’ and ‘Save The Eaton Theatre – Help Us Go Digital!’. In fact, no less than five of the campaigns use the rallying cry “Go Digital or Go Dark,” driving home the message that without the funds to buy digital equipment it will be The End for showing films at the local cinema. In many cases they are small-town or neighbourhood cinemas with a strong local following who are moved to action by the threat of no more films shown. This message is also driven home in the short films that accompany the Kickstarter campaigns, some of which may have been shown at the cinema themselves (on lower-end digital and advertising projectors).

In each campaign there are additional incentives, based on the amount that a supporter pledges. Below are some examples from successful campaigns:

– Pledge $25 or more – 75 backers All gone!

2 movie passes with one small popcorn and medium drink with each honored for one year. Donor’s name on web site donor page. Select 2 free movie posters we have on premises. (“SOS: Help Storyville Cinema convert to digital!”, Colorado Springs, CO )

– Pledge $75 or more – 42 backers Limited (158 left of 200)

Snag everything at the $50 level plus an exclusive Northwest Film Forum t-shirt in your size, with choice of his or hers. (Also, we have a limited number modeled on Jean Seberg’s “news” fashion statement in Breathless.) (“Digital Cinema at Northwest Film Forum”, Seattle, WA)

– Pledge $242 or more – 11 backers All gone!

A YEAR OF MOVIES – Early Donor version! Be one of the first people to jump on this, and we’ll give you a pass for as many movies as you want to see in a year. The pass is good from one year after the new DCP system goes live. (“Keep Central Cinema fun with a Digital upgrade”, Seattle, WA)

There were even higher pledging categories with one person donating $5,000 to the Tivoli cinema in Westport (Kansas City, MO) to become “TIVOLI EXECUTIVE PRODUCER: Receive everything from the Tivoli Super Supporter & Performing Arts Producer’s Circle Levels and you get to collaborate with Tivoli owner Jerry Harrington to curate your own film series!”

Yet with many donations starting at as little as $10 with no promise of anything more than a popcorn and drinks combo and your name on the cinema’s website, it is clear that the majority of people supported the campaigns to save their cinema, with the rewards as a bonus rather than main reason for donating.

Looking at the numbers it is worth noting that no campaign was significantly oversubscribed, with an average of 112 per cent pledged towards the goal, with half only achieving 110% or less. The highest rate was achieved by Playhouse Projector Project in Randolp, VT, which hit 147 per cent of its very modest target of $20,000, followed in second place by San Francisco’s Balboa Theatre that achieved close to 136 per cent of its more ambitious $75,000 target, with bronze going to Bijou Art Cinemas’ Totally Modern Digital Conversion in Eugene, OR, which hit 129.69% of its modest target of $38,713. These were thus outliers, whereas most saw their funding drive dry up once the target had been met. Cinema digitization campaigns are thus markedly different from Kickstarter campaigns for manufactured gizmos and inventions, such as the Pebble watch, which aimed for $100,000 and got over $10m on the promise of one of the watches for each backer.

Reasons for Success/Failure

Delving into the individual campaigns yields plenty of learnings why some hit their targets, while others fail. As stated earlier, most that failed did so by a wide margin, many effectively not even getting off the ground. Notable failures were drive-in cinemas, of which five failed and only one succeeded. With the amounts targeted being in line with other single-screens, the obvious explanation is that drive-ins are no longer part of the American movie going landscape and were headed for extinction even before the end of 35mm, which was part of the reason for Honda’s Project Drive-In last year. People obviously do not feel as passionately about preserving a local drive-in as they do about a small movie theatre.

Away from drive-ins it should be observed that the reason for the success of many Kickstarter go-digital campaigns are not unique to cinemas, but are equally true for most Kickstarter campaigns that hit their goal. This includes putting together a comprehensive presentation of the reasons behind the campaign with detailed description, pictures and a good short film of what it is hoping to achieve. Studies have been carried out on what makes or breaks a Kickstarter campaigns, including this one: ‘To Get Funded On Kickstarter, Talk About Cats And Karma (And Don’t Grovel)’ While we did not encounter any feline reasons for supporting cinemas in our research, implied karma was a strong factor, with some campaigns having names such as ‘Be A Movie Hero of The Elder Theatre: Going Digital’ or ‘Become A Movie Hero For The Vassar Theatre!’ They typically had a positive tone about continuing to show films and be a cultural hub for the community it serves. Several cinemas also highlighted the long history of their theatre, including black and white photos, copies of playbills and tickets from years past, directly speaking to the nostalgia and heritage that would be lost if the campaign failed. Reversely, campaigns that did not succeed were often just one or two paragraphs long, with only the bare minimum of photos and/or a poorly put together video.

Looking at the numbers, however, yields even deeper learnings. Asking for half a million dollars as one cinema in Wayne, PA did was unlikely to ever succeed (it earned $484 in pledges from nine backers). Yet counter intuitively most cinemas asked for too little, or at least less than the ones that hit their funding goal. If we put aside the $500,000 campaign we find that the average target for failed campaigns was $48,000, compared to $62,700 for ones that succeeded. Two of the campaigns that failed asked for just $8,000, which would only have paid for part of a conversion or a digital cinema server, though the only (failed) campaign that was specifically asking for a server, in Santa Ana, CA, had a goal of $65,000 but only got a tenth of that pledged. There is also no geographical decider which campaigns succeed or fail, with cinemas in big cities like Los Angeles, Chicago, San Francisco, Denver and Salt Lake City succeeding on the same terms as the likes of De Pere, WI, Ogunquit, ME and Paducah, KY, while other cinemas in Tampa, FL and West Chicago, IL failed, as did Bethel, VT and Thief River Falls, MN.

Why So Few?

While there as undoubted success stories of small cinemas going digital with the aid of Kickstarter, they represent a minority of all screens threatened by closure following the switch to digital. Although we cannot claim to have identified 100 per cent of all Kickstarter cinema digitization projects, we are confident that we have located over 90 per cent of all campaigns. According to cinema trade body NATO, “as of July 2013, 35,712 screens in the United States have been converted to digital,” with a further 2,951 digital north of the border in Canada. Set against this, the successful Kickstarter screens represent just one tenth of one percent of all digitised screens. Rolling Stone magazine recently published an article with the alarming headline, “How Digital Conversion Is Killing Independent Movie Theaters – State of the art projectors, which can cost $100,000 apiece, are threatening to close 10,000 screens across America”, citing data from NATO. Even if the actual figure is 5,000 or 2,000 or even 1,000, this still represents the death of a critical community focal point for small town America.

There are a number of explanations for why more campaigns have not (yet) appeared on Kickstarter. It is worth noting that Kickstarter is the most famous but by no means only crowdfunding website, with rivals such as Indiegogo and Smallknot, which we have not surveyed, also providing a platform for online fundraising. Most cinema fundraisers are likely to have taken place largely off-line, with everything from special screenings and Your-Name-On-A-Seat to funding from the local Chamber of Commerce. As Rolling Stone notes, “Some have held on-site fundraisers, using the church-raffle model. Others, like the 101-year-old Colonial Theater in Belfast, Maine, have used a combination of approaches, taking pledges from locals as well as charging patrons an extra 25 cents per ticket.” There are many non-internet ways to raise money for digital.

Reasons for not using Kickstarter vary. The chief reason against is Kickstarter’s all-or-nothing approach, which means that if you fall just a dollar short of your target, you get nothing. Cinemas would prefer to hold onto every single cent that is donated or pledged, rather than nervously biting their fingernails as they cross off days in the calendar as the target date looms large. Kickstarter also takes a five per cent commission fee, while donating locally ensures 100 per cent of the funds reach the intended target. It may also be that many cinemas and their audience/patrons are not familiar or comfortable with online crowd-funding or simply find the requirements of producing a detailed campaign page with customized video too arduous, not to mention the social media campaign that needs to be put into overdrive once the Kickstarter campaign has launched. The failed campaigns clearly illustrate that just slapping up a Kickstarter campaign will by itself not get the pledges rolling in.

What we have seen in our analysis is that executed correctly, Kickstarter can be a powerful tool for helping small and independent cinemas in their fundraising goal of enabling a transition to digital. As more and more Hollywood studios cut back or end 35mm prints completely in 2014, we are likely to see more cinemas and campaigns on Kickstarter before it is too late. And while digital projectors is required to show new films, there will still be a need for 35mm for archive films. The campaign “UICA’s Film Theatre – Bring Back 35mm Projection” was launched in September last year with a goal of raising $8,000 “ to purchase and re-install a 35-mm projector in our new theatre so we can ensure the vibrant programming variety our patrons expect.” It succeeded in raising $9,197 thanks to 107 backers, thus exceeding its target and achieving its goal of enabling film projection at the Urban Institute of Contemporary Arts in Grand Rapids, MI. Kickstarter has something for everyone.

[The full data of this research is available exclusively to CJ Premium members.]
Patrick von Sychowski
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