鈥楳onkey鈥 puts feather in crowdfunding鈥檚 cap
Print Edition
The overwhelming success of a China-made animation has trained the spotlight on a burgeoning mode of Internet finance 鈥 crowdfunding.
The novel fundraising channel impressed many Chinese movie-goers when 鈥淢onkey King: Hero is Back鈥 presented a long producer list that included 109 children, whose parents pooled money to aid in the movie鈥檚 marketing.
Due to the film鈥檚 immense box office success, those investors, who ploughed in a combined 7 million yuan (US$1.1 million), are now set to get more than 30 million yuan in return.
As of Tuesday, 鈥淢onkey King鈥 had taken 700 million yuan, beating 鈥淜ung Fu Panda 2鈥 as the top-grossing animated film in Chinese cinemas.
Producer Lu Wei said he posted the crowdfunding bid on WeChat late last year when the film was near completion. The largest donation by a parent was more than 100,000 yuan.
鈥淭heir participation contributed greatly to the movie 鈥 they are not just funders, but also enthusiastic promoters who advertised the film,鈥 he said.
The concept of crowdfunding, which allows projects to raise funds from a large number of people via the Internet, is gaining traction in China where the government has been encouraging innovative fundraising to help money-strapped business startups.
Figures from Yingcan Consulting show China鈥檚 crowdfunding platforms increased to 211 by the end of June, raising more than 4.6 billion yuan in the first half of the year.
Despite the boom, crowdfunding remains distant from the general public. Ai Haiqing, co-founder of a crowdfunding website keddoo.com, said most projects have high capital thresholds and only solicit professional investors.
The projects on large platforms (with low or no investment threshold) are mostly rewards-based or public interest activities. Equity crowdfundings (promise shares in a company or film) are rare, Ai said.
Their foray into China鈥檚 booming film market to target ordinary movie-lovers is also viewed as more of a marketing stunt to encourage 鈥渋nvestors鈥 to go into the cinema to support their own 鈥減roducts鈥 rather than suppliers of much-needed funds.
鈥淐hina鈥檚 movie industry does not lack hot money. Good projects can easily ensure funding and thus need not resort to crowdfunding,鈥 said a producer at a Zhejiang-based movie-making company.
鈥淪ome (films) launched such projects to expand the movie鈥檚 fan base and encourage public participation,鈥 he said.
鈥淲hat they offer are more like a finance product, which promises fixed return rates instead of making you a shareholder of the film.鈥
Crowdfunding can boost a film鈥檚 popularity, but investors usually have no say in its production. Movies that have trouble getting venture capital may also find little luck in crowdfunding, Lu said.
Industry insiders said it will take a while for China鈥檚 crowdfunding to grow into a mature fundraising channel to benefit both small investors and businesses. The sector needs better transparency and risk control as well as more success stories to boost public confidence.
鈥淭he sector needs to make a fortune before it can tell its stories,鈥 said Li Qunlin, chief executive of crowdfunding site dajiatou.com, adding that the market needs time to bloom.
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