Australian theatre’s new funding model

When major Sydney-based theatre company Belvoir turned to crowd-funding to send a theatre production to New York, they received outspoken criticism about their campaign.

Less than 20% of Belvoir’s annual funding comes from Arts NSW and the Australia Council for the Arts, although the most recent annual report states that the company is “performing well financially.”

Despite this, Belvoir ran a Pozible campaign in August this year to raise $10,000 towards the touring production, a tenth of what was actually needed.

Pozible is an Australian-based crowd-funding platform where any person can establish a campaign and ask others to pledge financial assistance to help the campaign be realised.

Campaigners must set a financial target and have a certain time period to achieve that target. In that time, people can pledge any amount of money they like to the project.

If the campaign reaches its target in time, Pozible processes the pledges, and the campaign is successful. If the target is not reached, none of the pledges are processed and the campaigner receives no money, based on an all-or-nothing model.

According to Pozible’s Marketing and Partnerships Manager Matthew Benetti, Pozible campaigns have raised over $3 million for films, over $2.5 million for music, about $1.5 million for live performance and about $1 million for fine arts in the past three years.

Most of this funding, Benetti said, was raised in the past 12 to 18 months, as crowd-funding in Australia has only recently begun to catch on.

In the United States, however, it has been extremely successful for a longer period of time.

“We’re probably 18 months or so behind where Kickstarter is,” he said, “as far as putting energy into marketing and getting the word of crowd-funding out there in Australia. We started a bit later.”

The US market, Benetti said, also has a wider range of projects on its crowd-funding platforms.

Over half of the crowd-funding projects in the United States are in the technology and gadgets sector, whereas that sector makes up for only about five to seven per cent of Pozible campaigns.

“It’s those sort of [technological] projects that will often be the ones where you raise in the millions and millions of dollars,” Benetti said, “because they’re pre-selling something versus a film where you’re trying to get a film funded and created. That’s more of a philanthropic endeavour.”

Belvoir’s critics argued that Pozible and other crowd-funding platforms should be reserved for those who have no other way of raising funds for their projects.

Chris Rodley from The Guardian wrote: “Belvoir shouldn’t be using their reputation to raise crowd-sourced money that is better spent on struggling grass-roots artists.”

The backlash is not the first in crowd-funding history: well-known actor and director Zach Braff and singer Amanda Palmer were both criticised for using American crowd-funding platform Kickstarter to raise over $3 million and $1 million respectively for creative projects.

The controversy with Belvoir has raised the profile of crowd-funding as a popular and increasingly common way of financing arts projects.

Members of the Australian arts community are faced with a growing number of arts-based crowd-funding campaigns from both emerging and established artists.

Australian independent artist and theatre producer Lauren Orrell felt that crowd-funding was born out of necessity for change. She found that funding for creative projects was difficult to obtain from traditional sources, and that there was a general misunderstanding of the financial cost of creativity.

“I think people have this vision of major companies and major artists having more money than they actually do,” she said. “It’s really hard to create the work you want to create through a corporate system or I imagine even a studio system, where you get projects that are producer-directed rather than artist-directed… I do think people have unrealistic expectations of how much art costs and [how much] money performers and actors actually make.”

Despite this, Orrell said it was necessary to use crowd-funding cautiously, and sparingly, where possible.

“I wouldn’t like to rely solely on crowd-funding,” she said. “I do think it’s a finite resource. You have to stand on your own merit at some point. You don’t want to bleed your family and friends dry.”

Orrell used Pozible for the first time this year to fund an independent theatre production for Sydney Fringe Festival. She had originally applied for a local council grant but, having just established a new theatre company, was unsuccessful.

“The feedback [from the council],” Orrell said, “was that because we were a new company, we hadn’t produced enough work to warrant [funding].”

Instead, she turned to Pozible, where she was no longer reliant on a government body’s approval to obtain funding.

“You can create your own opportunities [with crowd-funding],” she said “That’s the brilliant thing about it.”

The campaign was very successful and raised over $6,500 towards the project. The experience of receiving pledges was an eye-opener.

“We had people [pledging] $5 and people [pledging] $2000 and it was all proportionate to what people had available to them,” Orrell said. “It came from artists, from family, from friends, from people I hadn’t spoken to since high school, [and from] the broader public. It came from all walks of life. And that’s the beautiful thing about crowd-funding. [People can pledge] small amounts and those small amounts make a huge difference.”

Benetti said that people are using the Pozible platform for a range of campaigns. They vary from creative projects to business start-ups to non-profit fundraising campaigns.

Campaigns run through Pozible must be project-based, with a start, finish and outcome, making it a perfect platform for the arts sector.

“In Australia, it’s largely been the creative industries that have embraced [crowd-funding],” Benetti said, “and I would say that it’s now pretty much embedded as a viable funding source in [that industry].”

The use of crowd-funding platforms in Australia is growing, according to Benetti, as they have a higher success rate than government and council grants, which can be hard to obtain.

Roughly 15 to 35 per cent of Australia Council grant applications are successful. In contrast, about 56 per cent of Pozible campaigns reach their financial target, Benetti said.

During the month of September, Sydney Fringe Festival played host to over 300 different creative projects.

The festival is focussed more on exposure for emerging artists than making a profit, and most artists who broke even financially were doing well, according a spokesperson from the festival.

Only eight of this year’s Fringe projects used Pozible as a way of financing their creative project. Some artists instead decided to apply for a council grant or simply fund the project themselves.

One such artist was theatre director Alex Butt, who produced his show using his own money. Crowd-funding and grants were a great way to build a sustainable business or career, he said, but should not be relied upon indefinitely.

“It is up to the artists to prove to investors that their money will be well-spent and the quality will be of the highest possible standard,” Butt said. “I think eventually artists should be able to support themselves financially through ticket sales or by co-producing with other companies.”

One of the risks of using crowd-funding for a project is that most campaigners target a niche group, particularly when campaigners market their project mainly through social media.

This tends to minimise the project’s exposure, and campaigners risk alienating their social media contacts with repeated requests for financial pledges. Benetti noted that this can become an issue.

“We do on occasions get some feedback that, because it’s artists talking to their friends who are also artists and asking them for money, it can become tiresome,” he said. “Fringe festivals are a good example. Obviously, the people all kind of know each other, and they all run crowd-funding campaigns and they’re all asking each other for money. So we do encourage them to tap into networks that they might have outside of the arts.”

Some people may be wary about pledging money, as there is a financial risk involved in pledging money to start-up projects. The Pozible platform has agreements in place to reduce this risk.

“When people sign up,” Benetti said, “they enter into an agreement with us that says they’ll deliver upon the rewards or else they’ll return the money. They’re also subject to consumer protection law, which basically says the same thing.”

According to Orrell, crowd-funding is, at least for now, the most feasible way of producing and creating art, although some people will not understand that. The backlash against Belvoir, she said, was inevitable.

“I think people are going to whinge about crowd-funding, and about artists asking for money,” she said. “If we are to change that and come up with other avenues, we have to start paying performers and artists what they’re worth, and presenting opportunities for them, because it’s so hard to get work off the ground in Australia. It’s so hard, and it’s so expensive.”

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