More Evidence That Legacy Gatekeepers Just Don't Understand Modern Business Models

Business Models

from the it's-not-that-hard dept

For a while now, we have written about how legacy gatekeepers need to adapt to modern culture and business models if they want to survive. The primary point of contention that keeps many of these companies from adapting is one of control. Many of them don't want to lose what remnants of control they have left in order to become enablers. This mindset is what will be the death of many companies as the world moves on without them.

Some companies are making at least a half-hearted, if not completely misguided, attempt at trying to be hip. However, it seems to have been about as successful as a 60 year-old trying to use modern slang in order to connect with kids. Take for instance this recent comment by Obsidian CEO Feargus Urquhart in which he describes an exchange he had with a publisher about Kickstarter.

We were actually contacted by some publishers over the last few months that wanted to use us to do a Kickstarter.

I said to them ‘So, you want us to do a Kickstarter for, using our name, we then get the Kickstarter money to make the game, you then publish the game, but we then don't get to keep the brand we make and we only get a portion of the profits’ They said, ‘Yes’.

If you can't see the huge glaring flaw in the unnamed publisher's approach, let me elaborate. This publisher wanted to use Kickstarter as the funding source for an as yet unidentified project, while still keeping every other aspect of the traditional publisher/developer relationship intact. This means that the publisher would pay no money upfront, limiting almost all risk for the success of the project, while reaping all the rewards. Seriously.

While it is great that this publisher had become aware of Kickstarter and its potential for success, the fact remains that those in charge do not understand it in the slightest. The draw of Kickstarter and other crowdfunding services is to help creators fund their works and bring them to market. Few potential backers will be willing to support a project in which the creator loses all rights and control of the work after creation. These services are about empowering creators. A deal, such as the one above, in no way empowers the creator.

Hopefully, this is just a simple misstep as the publisher learns to walk the unfamiliar path of a new business model. We can hope that this publisher learns from this mistake and will take the time to better understand the culture behind crowdfunding and can find success by adapting itself to this culture rather than trying to shoehorn crowdfunding into its current business strategy. Because if it isn't willing to adapt, it might as well give up now.

Filed Under: business models, middlemen, publishers
Companies: kickstarter, obsidian