Indianapolis, IN. – As a graduate research assistant at the Arts, Entrepreneurship, and Innovation Lab at the IU Center for Cultural Affairs, much of my work in the past two years has focused on economic factors that influence artists who use crowdfunding platforms such as Kickstarter to finance and showcase their work.
Kickstarter is the dominant platform in the United States and around the world, with more than 18 million investing in excess of $5 billion to fund almost 200,000 successful projects. Analyzing data from their site can help us understand online crowdfunding dynamics on the whole. According to a Pew Research Center study, almost 1 in 4 Americans have contributed to a crowdfunding project, which serves as an indication of the reach and importance of online crowdfunding platforms for creative workers in a variety of sectors.
The recent COVID-19 pandemic has upended and changed our economy in ways that are unpredictable and continuing to evolve. Arts and culture crowdfunders have felt the effects of this upheaval at the platform level and on an individual basis.
Unsurprisingly, the pandemic and economic shutdown has led to a reduction in Kickstarter activity. There generally is not a great deal of monthly variation in the total number of projects launched on Kickstarter. However, March of 2020 saw a 35 percent reduction from pre-COVID levels of previous years – the most significant drop in new projects in the platform’s history. Many creators who rely on revenue from Kickstarter ventures as a primary or secondary source of income are facing intense insecurity.
However, coronavirus has not impacted all project categories equally. As Jon Leland, vice president of insights for Kickstarter, noted during his keynote presentation from the CCA’s New. Not Normal. symposium in June, categories that are less consumer-driven have been impacted the most severely. Sectors that rely upon in-person attendance – such as restaurants and live performances of music, dance, and theater – saw sharp drop-offs in mid-March. Other categories, such as games, technology, and design were less impacted by loss of their audience.
These findings are logical and suggest that the need for assistance is not spread equally among all sectors of the Kickstarter economy. Relief efforts should focus on the industries that are most reliant upon in-person engagement. Leland noted that when polled, Kickstarter creators listed publicity, lowering of fees, and direct funding as the most desired initiatives. These steps directly from platforms, coupled with governmental and patron assistance, could help mitigate the economic pain crowdfunders will face in the coming months.
Despite these general downward trends, there are some reasons for hope at the platform-wide level. The volume of money pledged to all projects has rebounded to record levels after an initial dip during the start of the pandemic. Additionally, the success rate of projects has increased about 10 percentage points higher than 2019 levels even as the overall number of successful projects has declined by almost half.
These trends might suggest that donors who have maintained their levels of disposable income during the pandemic have altruistically decided to increase their support of creators in need of continued funding. However, Leland also notes that live projects of more than $100,000 have increased during the pandemic, while the sharp declines were concentrated among smaller projects of less than $100,000. If these trends continue, a possible troubling outcome of the pandemic may be consolidation of the earning power on crowdfunding platforms into the hands of the largest creators at the expense of artists with limited ability to promote themselves or produce at scale.
A closer analysis of individual projects can also give insight as to how the coronavirus pandemic has impacted cultural and creative crowdfunders. To get a broad sense of the ways in which creators have directly responded to the pandemic, I created a glossary of searchable terms and grouped them by reference type in order to see the rate at which those keywords occurred in project titles and blurbs across the site. Although an imperfect measure of project purpose, the incidence of key COVID-related phrases still offers valuable new insights.
The graphics presented below are broken down on a weekly basis. For example, an 11 on the x-axis indicates the eleventh week of the year. Four-week moving averages were employed as well. The Week 11 total is an average of counts from weeks eight through eleven. The average campaign length for Kickstarter projects is about a month, so four-week moving averages function as a useful proxy for total number of live projects at any given time.
Predictably, the occurrence of both direct and indirect terms listed in the table above were much more common in 2020 than in pre-pandemic 2019. However, it is also notable that direct references – words such as COVID or virus – were much more common than words that referred to economic hardship or that were less explicitly about the pandemic. My theory for this gap is that creators are either choosing to highlight the relevance of their projects to the current moment in the most explicit terms possible or are avoiding the appearance of asking for charity.
Project search terms analysis
The graph below shows the incidence of the most commonly appearing terms in the data. Of these four, mask is the only term that does not contain some portion of the name of the disease. Interestingly, it also the term that began its increase the earliest and saw the highest peak of incidence in the data. This offers some support for the theory of larger professional creators gaining power while smaller independent artists bear the brunt of economic hardship.
Mask production appears to have ramped up in mentions several weeks before references to coronavirus started appearing. Project titles appearing in early March before widespread shutdown began in the United States included “InvisiMask: Reusable Protective Face Mask” and “AeroPrime Sterile Fluid Repellent Face Mask.” These titles and launch dates are indicative of technologically minded creators realizing the impending need for a new consumer product and launching their prototypes accordingly.
A few weeks after the spike in projects containing the term mask, there was a dramatic increase in projects mentioning the coronavirus by name. These projects had titles such as “Corona! The Virus! The Musical! The Movie!” and “Corona Battle Against COVID-19 The Board Game” and appeared in all project categories. These projects tended to be more artistically minded and reflected the individual experience of the creator more than it was an attempt to meet a pressing market need.
To be clear, attempts to provide personal protective equipment during a pandemic are not at all an issue and should be actively encouraged. However, a potential area of concern specifically for crowdfunding platforms such as Kickstarter would be if larger tech ventures began to crowd out the ability of artistic creators to find success on crowdfunding platforms. Options for artists to self-promote and fundraise are generally much more limited than those for commercial ventures, so ensuring the viability of artistic projects into the future should be a priority.
Projects by category
The graph below reinforces the primary observations made above by expressing the number of projects containing at least one flagged term in several key groupings of categories for each week. All projects with references to the pandemic spiked in mid-March and have slowly reduced throughout the months of April and May. Projects with COVID-related terms still make up about 5 percent of all projects uploaded to the platform months after the crisis began.
Categories with the highest number of flagged projects were technology, which included many mask-related projects, and design. Categories like dance and theater have very few flagged projects because their overall activity levels have flat-lined, which highlights the ability of some sectors to adapt to the crisis more than others. Regardless, even at the pandemic’s peak only about 10 percent of all projects mentioned the pandemic. Many creators have either chosen to respond to the pandemic by continuing to create projects in a manner similar to their approach before the crisis or may have left the platform altogether.
In addition to those categories that either adjusted immediately or are still floundering, some artistic sectors – like music and film – have begun to grow once again in conjunction with their mentions of coronavirus. These trends could imply that after an initial period of shock, musicians and filmmakers are choosing to reflect their changed reality either in the content of their art or in their pitches to create it. It will be interesting to see how artists choose to interpret and incorporate the pandemic in their future projects.
There are still many questions left about how the Kickstarter platform and arts and culture crowdfunders will adapt to the crisis. The Center for Cultural Affairs and AEI Lab will continue to analyze information and publish analysis on the topics of arts entrepreneurship and how the crowdfunding economy has been impacted by the pandemic in the coming months, and I appreciate the opportunity to contribute to this growing research topic.