When the Crowd Bets on Hollywood

The world of crowdfunding had a big moment last month when Facebook purchased the Kickstarter-backed Oculus Rift for $2 billion. But hardware projects were nowhere on the horizon when Indiegogo, the first big crowdfunding platform, launched at Sundance in 2008. The focus then, and still one of the big goals now, is transforming the way independent movies get financed.

Slava Rubin, Indiegogo’s co-founder and CEO, touts the current decade as a new era of movie funding, with individuals empowered to bring other artists’ passion projects to life outside the constraints of the Hollywood system. But the projects that tend to gain traction on the site—smallish productions that don’t appear to be conceived with commercial appeal in mind—aren’t the type that will force a reckoning upon Hollywood.

The site celebrated its sixth anniversary at Sundance this past January with the premiere of the Roger Ebert documentary “Life Itself,” which raised $151,000 on Indiegogo. Backers who were not at the festival could also stream the movie on demand, technology Mr. Rubin says will connect artists to their fans.

Mr. Rubin’s rule about the direction of movie crowdfunding is that you can add a zero to the highest amount raised by Indiegogo every two years. With some projects frequently breaking into the eight-figure territory right now, that would mean a $100 million feature getting backed on the site by 2016.

Clearly the idea of movie crowdfunding has some legs: one new venture, Junction Investments, just announced plans to let accredited investors get in on the equity side of studio productions. But there are still many questions about the true commercial worth of purely crowdfunded movies. Veronica Mars raised $5.7 million on Kickstarter last year, largely through ticket pre-sales, but its total box office take was barely half that. The Information talked with Mr. Rubin about the shifting world of film finance, what crowdfunding provides other than money and whether Indiegogo’s experience applies to other industries.