Fans get a say in film production with alum’s startup Legion M

Jeff Annison has an idea that has never been attempted in a Hollywood studio: Let fans have a financial stake in the movie productions they love and enjoy.

Annison, a UCLA alumnus, co-founded Legion M, the world’s first fan-owned entertainment company. For a minimum investment of $100, fans can become shareholders in Legion M and provide creative input in the development of films from their initial conception to final completion.

Annison said having a fan base that is emotionally and financially invested in the production of the movie from the very beginning is superior to the traditional model, because those fans are more likely to engage with the movie after production.

“We want people like us to be able to own a piece of (the studio) and go along for the ride,” he said.

The idea for the studio was born out of the Jumpstart Our Business Startups (JOBS) Act, passed by Congress in April 2012. The JOBS Act relaxed securities restrictions, making a fan-based crowdfunding model for entertainment viable.

After the act passed, Annison attended the Silicon Valley Comic Con, where he introduced his studio model to potential investors.

“The most common response we get from the hundreds of fans is, ‘Why hasn’t anyone done this before,’” Annison said. “It could only be done due to changes in the securities laws. For the first time in history anyone can invest in an early stage company.”

After leaving UCLA, Annison founded New York Rock Exchange, a music production company similar to Legion M in which fans can financially support the projects of their favorite musicians. Annison said once the JOBS Act passed, he was able to adapt his crowdfunding model from New York Rock Exchange to the more expensive, labor-intensive filmmaking process, allowing fans to potentially earn money on their investments.

Annison said Legion M differentiates itself from other Hollywood studios because of its legion, the group of fans who are both emotionally and financially invested in its productions.

“Being fan-owned is kind of the secret sauce, the source of all power in the legion,” he said. “When our movies come out, we can say, ‘Guys, our movie is coming out and you’ve been along for the ride since day one. Let’s blow this thing up.’”

Paul Scanlan, co-founder of Legion M, said the idea is for the fan base to act as a democracy, where investors are able to contribute ideas on casting and vote on specific creative decisions such as costume designs. He said Legion M is currently looking into adding a maximum investment amount, preventing a single shareholder from wielding too much influence in the company’s creative process.

“We don’t want a Wall Street investor to buy up all of our shares,” Scanlan said. “We are looking for a legion of shareholders; we aren’t looking at the size of the investment being a determinant of the volume of your voice.”

However, UCLA School of Theater, Film and Television lecturer Tom Nunan is not sure that Legion M’s fan-investment model will be a success.

Nunan, who is also the former president of NBC Studios, said having so many voices involved in the creative process could negatively influence the creator’s vision. He said when fans vote on elements like costume designs and music, it can diminish the role the creators have in making the movie, making it hard to attract the best talent.

“At the end of the day, someone has to lead and make a final decision,” Nunan said.

While fans will be a part of the creative process, their role will be limited to supporting the views of the creators, said alumnus David Baxter, head of content development at Legion M. He said fans will choose to invest based on the partnerships Legion M makes with creators such as Seth Green and Stoopid Buddy Stoodios, the team behind Adult Swim’s “Robot Chicken.”

“It’s about matching fiscal investment with emotional investment,” Baxter said.

Investors partner with Legion M not to have their creative ideas heard by directors and producers, but because they trust the proven track record and creative expertise of people like Seth Green and other Legion M creators, Scanlan said.

Legion M will begin accepting investments later this year, but for now, Annison said he is looking forward to reaching the goal of one million fan-shareholders.

“Seeing how fans and artists can come together, and seeing the power of that connection is instrumental to our vision of Legion M,” he said.