Project Startup

Could crowdfunding produce A&E's next hit show?

April 18, 2013: 3:05 PM ET

Crowdfunding success no longer just means financial backing. A&E's partnership with RocketHub could mean it comes with advertisers and free publicity, too. 

By Kurt Wagner, reporter

130418120605-rockethub-614xaFORTUNE -- When more than 90,000 supporters helped to raise over $5.7 million last month on Kickstarter for a Veronica Mars movie, crowdfunding got a taste of what high-profile reputations can do. The campaign originally set out to raise a mere $2 million to fund a full-length film based on the long-canceled Warner Bros. television show, but the flood of financial support not only set Kickstarter records by hitting its funding goal in less than 11 hours, it also raised questions: When will other major entertainment companies join the crowd?

The crowdfunding industry took another step toward synergy with traditional media outlets Wednesday when RocketHub announced a commercial partnership called "Project Startup" with A&E. It's the first time a crowdfunding platform has joined forces with a television network.

Entrepreneurs who fund their ideas on RocketHub will now be potential targets for A&E advertisers, says David DeSocio, senior vice president of ad sales marketing and partnerships for A+E Networks, the umbrella company that owns a number of channels including A&E, History, and Lifetime. Some successful projects that match up with A&E's brand may even find themselves featured on the company's website or on the receiving end of seed money from the network, says Dr. Libby O'Connell, A+E Networks senior vice president of corporate outreach. A&E would provide money in the same way that current donors do, using the perks-based model where donors receive a gift or perk in exchange for their contribution. The perk, in this case, may simply be a business relationship, says O'Connell, but A&E will not be investing in campaigns in exchange for equity as angel investors or venture capitalists do.

MORE: Who's getting crowded out of crowdfunding?

The network's interest in small businesses and entrepreneurs has grown in recent years, says O'Connell. Shows like Duck Dynasty, Storage Wars, and Barter Kings have given A&E an entrepreneurial aspect to its brand, she added. Could the network's next hit show be funded on RocketHub? "Anything is possible," says O'Connell.

For RocketHub, the new partnership means they can offer entrepreneurs something that rivals Kickstarter and Indiegogo can't: a potential relationship with a television network, an obvious selling point with so many crowdfunding platforms vying for entrepreneurs' attention. Those campaigners seeking to fund media-related projects (think television shows or short films) may now be drawn away from Kickstarter and toward RocketHub. "One of the things that we ask ourselves every day at RocketHub is, 'How can we add value to our project leaders?'" says Brian Meece, RocketHub founder and CEO. "I see [this] as a huge value for our users."

Kickstarter is well known for attracting campaigns geared toward film and theater, and A&E said that it did approach Kickstarter 10 months ago when it began searching for a crowdfunding partner. Nothing materialized. "The people who were most receptive and welcomed our project was RocketHub," says O'Connell. Kickstarter declined to comment through a spokesman.

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If anything, the new partnership is vindication that crowdfunding is no longer just a simple way to get your niche project funded. In recent months, crowdfunding has become more mainstream through high-profile campaigns like the Veronica Mars movie on Kickstarter, and on Indiegogo, a campaign dedicated to building a Tesla museum raised over $1.3 million in 2012. An industry that was once dedicated to funding small, quirky projects you'd find in your local community has quickly become a way for entrepreneurs to gain major recognition.

Seventeen films at this year's Sundance Film Festival were funded through Kickstarter, six of which were acquired for 2013 distribution, according to the Kickstarter website. Another Kickstarter-funded film, Inocente, won an Oscar for best documentary back in February. "Once it was a fringe model for artists," says Meece, "but it is now becoming a staple for seed-stage funding for businesses, for media makers. I almost feel like we're in the year 2003 talking about social media, but we're in 2013 talking about social funding." Both Meece and O'Connell believe that their relationship is just the beginning of what will surely be similar arrangements in the crowdfunding industry. With the entertainment industry eager to capitalize on a sea of fresh ideas, it appears as if an entirely new crowd is right around the corner.

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