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– overseeing the work of copy editors, proofreaders, typesetters and printers, personally managing the book design and blurb-writing, distributing review copies, negotiating with distributors, pouring over legal contracts and performing all the petty accounting. By outsourcing all this work to a publisher, he argues, they more than justify the cut they take from his book sales. There’s also the matter of efficiency. Stross claims it takes him about six months to write a manuscript, while it takes his publisher another three months to have the book proofed, typeset, illustrated, printed and bound. If he were to undertake that work alone it would take him considerably longer, perhaps as long as the book-writing itself. A webcomic might be easier to collect and publish than a manuscript – there’s less editing involved, for one thing – but there’s still months of work to perform while you’re not getting paid. And in John Campell’s case, this goes a long way towards explaining the pressure he was under in the lead-up to the end of his campaign. $51,615 seems like a lot of money to squander, but it looks a lot less impressive when you break down the production costs. Kickstarter takes a five per cent cut of all successful projects, and Amazon Payments another three - five per cent, which would have immediately left Campbell with the more modest sum of $46,453. And the 2000 books he had printed cost $15 to make each, which works out to a total of $30,000. When we subtract that amount, we’re left with only
$16,500 to cover postage and overheads. Those are slim margins, considering Campbell made a loss on the books at the $25 price point. That implies those costs came to more than $10, on average, and with over a thousand backers that left him with not much of a financial buffer in case things went wrong. For Campbell, it was the success of his campaign that ultimately led to its failure. The unexpected funds meant he was under pressure to deliver a better product, which led to the time delays and overblown costs which, ultimately, sunk the whole thing.
Backers as Both Consumers and Investors
Campbell wasn’t the only one to succumb to the pressure of a successful campaign. When Amanda Palmer raised over a million dollars to fund the production of her latest album, Theatre is Evil, she received a lot of criticism from people who felt as if she’d won the lottery. Palmer was forced to justify her costs and expenditures to the general public, even though she would never have faced such scrutiny if her album was being funded by a record company. The problem is that Kickstarter backers are both investors and customers – like investors, they want constant information on the project, as well as something of a return. For backers this is usually a discounted, ‘backer-exclusive’ product. But, like customers, they want this product to be the
best possible value, which means high production costs and slim profit margins for the creator. Amanda Palmer was able to negotiate these competing forces, but only because she has a wealth of experience on the production side of music-making. She’s long been releasing her music independently and was no stranger to crowd-funding when she sought backers for Theatre is Evil. But, not every artist or creator is going to have that background, or know how to accommodate the conflicting needs of backers. No one forced Campbell to overspend on production costs, but Kickstarter often pressures creators to over-deliver. If he had gone with a more modest design for his books he would have been able to easily cover shipping, and he might now be looking at a significant profit from subsequent sales, but his backers might have felt that they were ripped off. Kickstarter is now being made available to Australians, some of whom will struggle with the same challenges and pitfalls that plagued John Campbell. To succeed, they’ll need to keep their goals manageable and be realistic about what they can achieve without putting themselves in financial dire. But they’ll also need backers who are less demanding about getting the best value from Kickstarter, and more willing to see the project succeed than receive the best rewards. Justin is currently seeking backers to finance a film based on his Sliders fan-fic. (Readers describe it as ‘high concept’ and ‘cutting edge’.)