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Funding Platforms for Digital Content: The Determinants of Persistent Contribution
Authors: YeeHeng Tan (Tokyo International University, Japan), Srinivas K Reddy (Singapore Management University)
Most forms of crowdfunding are one-time contributions to projects or causes. Some new crowdfunding platforms have evolved for backers to provide recurring support (patronage) to projects. Such platforms are unique in that the funding of a project has no fixed duration and has no fixed funding goal. The number of backers (patrons) and their contributions to these projects can evolve across time very differently, with some projects accumulating backers and contributions rapidly, some growing at a steady pace, while others declining over time. These varied dynamics of patronage funding presents us with a rich set of research questions to understand the performance of projects in the recurring crowdfunding model. For example, what role does the project, project creator characteristics and type of incentives play in determining the different funding patterns, and do these factors have a temporary or a persistent impact over different stages of the life of the project. Using data (3229 projects launched between June 2014 and May 2015) from a leading patronage crowdfunding platform, we identify how several project type properties, incentives, project presentation characteristics and project categories impact patrons and their contributions over time. Our findings highlight the difference in the timing and persistence of crowdfunding factors, with factors such as the number of perks and amount of exclusive content having a persistent effect on patron and contribution growth rates while other factors such as the number of milestone goals having a temporary effect in different stages of the patronage crowdfunding process. Recurring crowdfunding platforms can make use of the information provided by our research by emphasizing, through the platform architecture, on factors that motivate a potential patron to contribute. Managing their website interface and directing users’ attention either to or away from these factors would in turn increase successful platform interactions as well as their revenues.