Cultural Crowdfunding Platform Capitalism, Labour And Globalization

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Cultural Crowdfunding: Platform Capitalism, Labour and Globalization

Crowdsourcing and Crowdfunding: The Origins of a New System?

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Far from an Alternative: Intermediation Apparatuses

Vincent Rouzé

In the face of economic crises, increased concentration in the cultural industries and the withdrawal of public support, crowdfunding platforms seem to ofer new opportunities for funding and promoting culture (D’amato 2014). In 2013, Fleur Pellerin—former French junior minister in charge of the digital economy—visited the peer-to-peer personal lending startup Prêts d’Union. In her speech, she argued that crowdfunding is ‘a simple and efective alternative which allows innovative businesses to perform better, and investing citizens to support the projects of creators and talented entrepreneurs which are close to their own hearts and which resonate with their own beliefs.’ Once we get beyond such seductive speeches to young entrepreneurs—made in a ‘crisis’ context—these integrated platforms can be viewed as stakeholders in the ‘alternative finance market’.

But in what way are those platforms disruptive? Are they really alternatives, and if so, what makes them alternative? Is it their approach to project funding, which contrasts with the caution and reluctance banks and institutions typically show? Are they an alternative to corporate finance? If so, how can this alternative also apply to culture? This chapter seeks to answer these questions by analyzing how crowdfunding platforms operate and what functions they actually perform. The key hypothesis is that they constitute dispositifs or

CHAPTER 3

How to cite this book chapter: Rouzé, V. 2019. Far from an Alternative: Intermediation Apparatuses. In: Rouzé, V. (ed.) Cultural Crowdfunding: Platform Capitalism, Labour and Globalization. Pp. 35–58. London: University of Westminster Press. DOI: https://doi.org/10.16997/book38.c. License: CC‐BY‐NC‐ND 4.0

apparatuses (Agamben, 2007) in the economic and social realm as well as on a political and legal level. In this regard, they contribute to the implementation of what Philippe Corcuf (1998) calls ‘action regimes’ of a predominantly normative (rather than alternative) type. Unlike the experimental, DIY-inspired fundraising modalities of early Internet sites, mainly in the field of music, the platforms which have arisen since 2010 are inherently conceived as new intermediary players within the fragmented cultural economy.

In the first section we will discuss the polysemic nature of the concept of the ‘alternative’ in order to expose the ambiguities of its usage regarding the case of crowdfunding platforms. Subsequently, we will expose how the diferent apparatuses tend to transform these platforms into central players typically following a logic of intermediation (Miège 2017). Lastly, we will question the notion of an ‘alternative’ from the viewpoint of project carriers. Although they may be experienced as alternative by project creators, in reality they are better understood as new intermediaries firmly integrated within the prevalent capitalistic logics of the cultural and creative industries.

Defining the Alternative

The notion of alternative is commonly attached to forms and systems which seek to exist and define themselves at the margins or in opposition to the existing, dominant models. From a strictly etymological point of view, the term has two key meanings. Firstly, it refers to ‘that which acts in turn’ (as in alternative electrical current); secondly, as of the sixteenth century, to ‘that which replaces’. It is clearly the second meaning that qualifies numerous practices or systems, but this usage is complex given that it pertains to such a variety of contexts and situations. As we are reminded by John Downing’s analysis on radical media, ‘everything, at some point, is alternative to something else’ (Downing 2001: p. ix). Nonetheless, what characterises them beyond this diversity is the specific goals which they exist for: either these practices aim to critique, transform and abolish the system within which they appear, or they seek to accompany the system’s structural mutations in order to maintain its hegemony (in the Gramscian sense).

Much existing literature in the field of alternative media has shown how, in the first case, these forms aim at emancipation and wider participation, various degrees of radical transformation. According to Marisol Sandoval and Christian Fuchs (2010) these alternative, militant forms are articulated around two divergent conceptions, which they name subjective or objective, in reference to a formulation put forward by Anthony Giddens. The first defines the alternative according to the actions carried out and the location of these last. The central point is that participation generated allows expression for individuals and groups that are deprived of it in traditional media. Horizontal and collective modes of control and organisation complete this, with DIY-inspired processes leading to more democratic forms of ‘management’. The second, objective, conception refers to work more concerned with contents, and with radical and critical media forms as such, envisaging these as a counter-force against existing institutions. It’s this dimension that is at play in artistic and cultural forms in the fields of music (Kruse 1993), film (Newman 2009) or literature, in the sense that they strive to transcend or abolish existing codes and norms, as well as mainstream economic or political logics, despite simultaneously running the risk of being reintegrated into a capitalist system that feeds on such alternatives. The case of the punk movement, as analysed by Dick Hebdige (1979), is a classic illustration of this phenomenon. And as Christian Fuchs (2010) also observes, despite their emancipatory goals, alternative media practices and contents must also avoid three major pitfalls: the fragmentation of the public sphere; their profitability and links with repressive political purposes; their tendency towards exclusivity.

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Cultural Crowdfunding: Platform Capitalism, Labour and Globalization

This tension between two conceptions of the alternative can be seen at play in the literature regarding propositions and alternative economic models. On the one hand one observes a number of reflections and concepts pertaining to alternatives to globalized and centralised capitalist economies, covering closely related themes and suggesting new practices such as an end to speculation, the development of alternative currencies (Greco 2001), the importance of locally based, participatory practices and non-hierarchical labour relations. On a second level, one observes critical analyses of the capitalist system, illustrating the contradictory logics which it thrives upon (Hardt and Negri 2001, Boltanski and Chiapello 2018). In both cases the aim is to rebuild solidarities based upon both material and symbolic reappropriations, forms of ‘entrepreneurship of the multitude’—to quote Hardt and Negri’s (2017) somewhat optimistic formula discussed also by Fuchs (2017)—marked by practices of the ‘commons’, open co-operation (Bauwens and Kostakis, 2014), as opposed to capitalist exploitation. They can also be set within the project a sustainable ecology (Löwy 2011) or that of ‘degrowth’ (Latouche 2014).

As we observed in the previous chapter, the spread of Internet extends these debates and the tension between a development based on citizen controlled, alternative, collective sites and platforms, and online spaces run according to the capitalist logics of the culture and communication industries. In these debates, a majority of so-called ‘alternative’ platforms are given (or seek) this appellation in opposition to the mainstream, international market leaders (Facebook, Uber, Netflix, etc.). A recent contribution to this question (Thuillas and Wiart 2019) suggests three types of ‘alternative’ platforms: firstly the mutualist, assembling several existing cultural players which gather to develop a common project; secondly virtual ‘marketplaces’ allowing various independent players to join forces in order to increase their market share; thirdly those supported by public or para-public funding. The last case, only, allows a certain degree of independence from the logic of financial returns. It can however be easily constrained by political logics favouring such and such a project, requiring legitimisation of local or national power structures. In all cases, these types of platforms are only partially concerned with the alternative logics discussed above, and appear most likely to contribute to the reinforcement of political and/or economic hegemony.

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Crowdfunding platforms, in their overwhelming majority, appear to be characterised by these dominant logics. The term ‘alternative’, as used by the French Junior Minister in the speech quoted at the beginning of this chapter, has to be considered according to its second finality, i.e. without any explicit reference to forms of emancipation, to critical models, or to the transformation of the existing system. This usage of the term goes hand in hand with the praise of ‘innovations’ and ‘creativity’ which are specifically designed to extend capitalism’s lease, so as to speak. It belongs to a somewhat hazy ideology of participation which can indeed alternately be declined to the ‘gift economy’, the ‘collaborative economy’, the ‘gig economy’, the ‘peer economy’, etc. In practice what these various notions share is the commodification of daily activities which formerly were beyond the realm of market economy, either because of their inherently private nature, or because they remained until recently publicly supported (Scholz 2016).

As with the majority of platforms and with the ideologies that accompany their usages (Gillespie 2010), cultural crowdfunding platforms can be seen as positioned on the fringes of traditional cultural-industrial logics. To ensure their financial viability, platforms apparently adopt the so-called ‘long tail’ model (Anderson 2006): instead of developing and securing niche markets, they secure niche projects, in a ‘grey zone’ of the cultural industries, led by project creators and their communities. Unlike the logic of rarity-based artistic and cultural markets (Farchy, Sagot-Duvaroux et al. 1994), these platforms ofer a huge number of projects, most of which are not aimed at an audience much beyond the ‘crowd’ of participants/backers. This is confirmed by the presence of heterogeneous projects, and by the fact that these are largely one-ofs which appear on rapid rotation (financing over periods of 2 months, less than 180 days on average), asking for an average of €4,365 (source BPI France).1 Their alternative features rely, moreover, in the forms of financial transaction that they ofer, supposedly on the margins of mainstream finance. Several titles of NESTA annual reports are, from this point of view, quite eloquent: The Rise of Future Finance: The UK Alternative Finance Benchmarking Report (2013); Understanding Alternative Finance: The UK Alternative Finance Industry Report (2014).

Crowdfunding platforms undeniably reflect some of the values and ideas that one also can find in alternative discourses and projects: participation, horizontality, the strength of local, community-based projects, the autonomy of project creators—but consistently in forms which are compatible with capitalist economic logics. These forms of participation are therefore very much removed from, or even in contradiction with, concepts such as Participatory Economics (or Parecon) developed by the American economist Robin Hahnel and writer activist Michael Albert (1991). These last proposed to wholly rethink the economy on the basis of socially shared needs and desires, both within the structures and values of labour, in a respectful relation to the environment, and in view of a social justice inspired by democratic decision-making procedures, and initiatives carried out during the twentieth century in various revolutionary contexts, from Soviet Russia to Latin America.

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Cultural Crowdfunding: Platform Capitalism, Labour and Globalization

In other words, we can see that crowdfunding platforms are indeed apparatuses in the sense suggested by Giorgio Agamben (2009), who argued, following Michel Foucault, that the apparatus ‘has in some way the capacity to capture, guide, determine, control and implement the gestures, conducts, opinions and discourses of living beings’. In the following section we will consider what precise functions these apparatuses perform.

Apparatuses Adapted to Market Strategies

Following the diversification and segmentation of the traditional cultural industries, and integrating other economic sectors through their emphasis on creativity (Garnham 2005; Tremblay 2008), cultural crowdfunding platforms (gift and reward-based models) now operate in competitive two-sided markets (Eisenmann et al. 2006; Rochet and Tirole 2006) and must develop their appeal and their selling points in order to survive according to capitalist modalities that are not specific to the digital sector. Aiming to better understand the economics of platforms and the issues involved in them, a study by DARES (Direction de l’Animation de la Recherche, des Études et des Statistiques) emphasized that ‘the economics of platforms does not constitute a radical new break; the model pursues, combines and multiplies dynamics already largely at work during the 1990s’ (2017: 10).

They have indeed developed on the model of the intermediary, as an interface between diferent players (Miège 2017), and an instrument of industrial convergence (the ‘ecosystem’). According to a report by the Conseil National du Numérique en France, a platform is:

a service fulfilling an intermediary function for access to information, content, or services, either published or supplied by a third party. Apart from its technical interfaces, it organizes and hierarchizes content in view of its presentation and interconnection with end users. To this common characteristic is sometimes added an ecosystemic dimension characterized by interrelations between convergent services.2

This double movement of interface and convergence plays a part in the extension and financialization of ‘amateur’ practices, the outsourcing of problem solving, and content production, while reducing the risks of investment by shifting them to the user/consumer and/or community (Matthews 2015a; 2015b). Given these practices, the platforms develop a twofold discourse that reveals the ambiguity of their position. They present themselves to creators and backers as an ‘alternative’; simultaneously, they position themselves as partners rather than competitors to traditional industries. Sector professionals we spoke to believe that this globalized competitive ‘ecosystem’ is now ‘mature’. Cultural crowdfunding platforms can therefore be diferentiated according to distinct strategies aimed at diferentiated markets. We now set out these various modes of diferentiation.3

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1. Discussing the Typology of Platforms

Let’s firstly recall the dominant typology. Donation based platforms allow contributors to fund a project in a purely ‘philanthropic’ fashion; reward-based platforms ofer graduated gratifications according to the amount given; lending based platforms invite users to lend money in exchange for expected interest returns; lastly, equity based platforms allow users to invest in a project or a company by becoming a shareholder and therefore expecting dividends. This classification is widely shared by both economic and political players and attempts to diferentiate various forms of exchange or investment. Although it underlines the extension of the fields in which crowdfunding is now operating, it is nonetheless problematic. Firstly, this classification erases structural distinctions that can exist within one single category. Secondly, it fails to address the specificities of each platform. For instance, in 2018, the French professional organisation ‘Financement Participatif France’ listed together 22 platforms hosting cultural or ‘solidarity’ projects which were either donation based or reward based. Lastly, this nomenclature fails to acknowledge the development of ‘internal’ platforms belonging to either private corporations or public institutions. This is the case of the ‘Tous Mécènes’ platform developed by the famous Musée du Louvre, which therefore cannot be accounted for with the commonly recognised typology. Therefore, we propose another classification, which corresponds more clearly to the activities and specificities of the various platforms studied, particularly in the field of the communication and culture industries.

1. Generalist Platforms

The first type of platforms encountered are the media-fuelled generalist sites such as Indiegogo, Kickstarter or Rockethub in the USA, or Ulule and KissKiss-BankBank in France. They allow project creators to raise funds for a variety of cultural goods or services (music, book or other printed media publishing, fiction or documentary film, videogames, as well as technological projects, apps, etc.). These platforms generally involve funding projects over a short period of time (the ‘campaign’), but it is also possible for projects or persons to be funded by ‘backers’ over a long or undetermined period—a route ofered by Patreon in the USA and Tipee in France.

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Cultural Crowdfunding: Platform Capitalism, Labour and Globalization

The generalist platforms have the biggest turnover, and capture the majority of value in terms of both number of projects submitted and amounts raised—Indiegogo and Kickstarter in the US, Ulule and KissKissBankBank in France. Kickstarter, the world leader, has raised \$4,090,777,676  across a total of 157,152 projects funded. The figures are lower in France: Ulule reports 26,261 projects funded out of 40,643 submitted, generating donations amounting to €129,564,662 since the platform’s launch. KissKissBankBank raised €93,488,678, with 33,175 projects proposed, 19,349 of which were successful.

The dominance of generalist platforms is due both to thematic categorizations (close, if not identical, to those of the cultural and creative industries: music, comics, publishing, films and documentaries, videogames, technology, cookery), and to their media coverage and trust they generate. This observation is corroborated by the statistics of the research we carried out with Internet users, project creators and backers. To the question ‘Can you cite any crowdfunding platforms?’ respondents to our study mostly named Ulule (27%), KissKiss-BankBank (22%), Leetchi (13%) and Kickstarter (9%).

More specifically, regarding the projects submitted on the majority of platforms, music appears to account for a significant proportion of revenues. The importance of music can be explained partly by the ties that this art form has with crowdfunding from the beginning, but also because of the correspondence between musical formats, as an experience good, with this type of apparatus (Bourreau and Gensollen 2006)—unlike other areas such as documentary or fiction film, whose products both require significantly larger budgets and often rely on diverse sources of funding. Lastly, this importance can be linked to the structure of the musical sector and the evolution of usages in the digital age (Leguern 2016). For instance, considering the figures of US platform Kickstarter, in June 2019, music isn’t generating the most projects but it remains the category where there are the most fully funded projects.

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