Original Blog by Neilinder Saini

Crowdfunding is an emerging trend that helps entrepreneurs raise capital for their projects. For larger companies, however, these crowdfunding sites provide the perfect platform to conduct market research. Through these platforms, companies can collect valuable information about consumer demands, tastes and preferences, and forecast how well their product or service will perform once it launches. In his blogpost, Neil provided an example with Marvell Conductor Group Ltd., which started a campaign on Indiegogo to gain insight on the demand of their new product. The campaign not only helped Marvell collect the information, but it also helped them raise publicity for their product, as can be seen the number of backers who paid $599 to get the product before it launched in the market.

Recently, Chinese online giants have taken one step further launched crowdfunding sites for movies. Alibaba’s Yu Le Bao (Chinese for Entertainment Treasure) gained 240,000 users in just two days and since its launch have rolled out four major film projects. Baidu’s Baifa Youxi launched its first crowdfunded movie ‘The Golden Era’ after raising $2.93 from its platform. These companies emphasizes that “anyone can be a producer” and guarantee backers monetary earnings based on box office performance or investment earnings otherwise. I think this is a very innovative business model. Not only does it extend the use of these platforms as a marketing research tool, but people are much more inclined to actually watch these movies with the thought in mind that they are an investor themselves.

Works Cited:

Coonan, Clifford. “China’s Alibaba Launches Crowdfunding-Like Service for Film Investment – Hollywood Reporter.” The Hollywood Reporter. N.p., 1 Apr. 2014. Web. 9 Nov. 2014. <http://www.hollywoodreporter.com/news/china-s-alibaba-launches-crowdfunding-692910>.

Frater, Patrick. “China Online Giant Baidu Launches Film Funding Unit.”Variety. N.p., 22 Sept. 2014. Web. 09 Nov. 2014. <http://variety.com/2014/film/news/china-online-giant-baidu-launches-film-funding-unit-1201310689/>.

Team, Trefis. “Chinese Internet Firms Turn To Crowd-funding.” Forbes. Forbes Magazine, 10 Feb. 2014. Web. 09 Nov. 2014. <http://www.forbes.com/sites/greatspeculations/2014/10/02/chinese-internet-firms-turn-to-crowd-funding/>.