Published: April 10, 2024


Crowdfunding platforms are characterized by an uneven distribution of quality and resources. Some projects achieve outstanding and exceptional performance. Those projects, which we call “blockbuster projects,” are believed to have a considerable impact on crowdfunding platforms, especially on other concurrent projects. There are two plausible yet opposing predictions: they may exhibit both a negative effect by monopolizing backer attention and resources and a positive effect by increasing the activeness of backer side. This tension could be further complicated, considering that blockbusters are inherently heterogeneous, which could result in different interrelations with other concurrent projects. To fully understand this tension, this study examines the effects of blockbuster projects on the overall performance of concurrent projects on the platform and the nuances of such effects for different interrelations between blockbusters and other projects. Drawing on the cross-side network effects literature and integrating insights from the unique features of crowdfunding, we develop a theoretical framework that highlights the multidimensional view of blockbuster effects: we propose that blockbuster projects have an overall positive effect on the performance of concurrent projects (overall effect), and such positive effect is stronger for related blockbusters (local effect) and blockbusters emerging before the focal project (temporal effect). Using data from a leading reward-based crowdfunding platform, the proposed hypotheses are tested and largely supported. Additional analyses, based on off-platform data and backer data, verify the mechanism driving the blockbuster effects: blockbusters increase the popularity of the platform, whereby backers participating in the blockbusters tend to develop positive impressions and heightened expectations, so that they are likely to participate in other concurrent projects. This study contributes to the crowdfunding literature on interactions among projects, the literature on distinctive agents in online markets, and the cross-side network effects literature. We also discuss practical implications for project creators and platform operators.

Some projects become sensations on the crowdfunding platform Kickstarter, racking up a disproportionately large amount of funds compared with other projects.

Take the video game Double Fine Adventure, which launched on Kickstarter in February 2012 with a goal of raising $400,000. The project raked in more than $3.3 million from over 87,000 backers, making it the largest project ever on Kickstarter at the time.

Recent research takes a closer look at the effect of so-called “blockbusters” to see what impact they have on other Kickstarter projects and how entrepreneurs can benefit.

Read the full article here.