Is Crowdfunding the Future of the Music Industry?

 

Article by Daniel Perretta | 904 words

I am sure that all of us have drifted off, thinking about new ideas, projects, and inventions, only to be struck with the quick gut-check of reality.  “How would I even fund something like this?”

In recent years, that question has been answered with crowdfunding.  If someone can’t pay for their project, they can get others to give them financial backing.  Not too long ago, it took federal grants, bank loans, or a group of investors offering up money for a share of the profits to get a project off the ground.  Today, an individual or company can offer up their idea to the masses of the Internet world, and any Joe Schmoe can chip in what they wish. These websites—like GoFundMe, Kickstarter, and Indiegogo—have made it so anyone can fund a project, and almost nothing is off limits.  For instance, Zack Brown of Ohio set out to earn $10 to make his first potato salad.  The end result was donations of over $55,000 for Zack’s salad.

Of course, there are plenty of other ridiculous or off-the-wall campaigns like Zack’s popping up all the time on these sites, but bands and musicians have found these sites as a useful resource as well.  Bands ranging in popularity from local unknowns to big names in the music industry have all funded their various endeavors with the help of crowdfunding sites.

Crowdfunding

Credit: Indiegogo

Why do Bands Turn to Crowdfunding?

Typically, a band will shoot a video explaining the why of the campaign, and where the money will go.  Most bands have used crowdfunding to help finance records and DVDs due to the lack of funding they may get from their record companies.  Using a crowdfunding campaign can keep bands out of debt with the label they are signed to.  In order for the campaign to work properly, the band will often offer something in return for donating money to the campaign, and as the dollar amount increases, so do the levels of reward.

Bands that have Run Successful Campaigns

A lot of bands in the punk, metal, and indie arena have seen quite a bit of success using this method.  Devin Townsend, Whitechapel, and Protest the Hero are excellent examples of bands using crowdfunding to their advantage, and using them well.  Each group not only met their goal, but also exceeded their goals by very large numbers.  Townsend reached 541 percent of the goal he set earlier this year on PledgeMusic. Just in case you need to see that a second time here is the figure by itself—541 percent.

Even Protest the Hero reached 273 percent of their goal on Indiegogo in February 2013, and each successful funding a band has made was due in part to the rewards that were offered.  Let’s be honest, a strong fan base certainly helps, but when you offer those rabid fans something like the opportunity to have a guest vocal spot on the album your band is trying to fund, those fans are gong to fork over that money with the quickness.  Protest the Hero offered several levels of rewards that ranged from a digital download of the record after completion for $10 to the aforementioned guest spot for $5,000.

Protest the Hero’s Success

In an interview with Nvate, Tim Millar from Protest the Hero attributes a large part of their success with their strong fan base.  He also claims one of the reasons they started the campaign in the first place was to end the cycle of record deals.  “If we signed more record deals, we wouldn’t be looking at very much money advanced to us to make the album,” Millar said. That would not bode well for making the album they really wanted to make.

It is also important to note that the band exceeded their goal on the first day of the campaign, and despite the following trouble with the record company, Millar said, “[I] was just happy that we could make the next PTH album and not have to stress about how we were going to do it.”

“[I am] very thankful and humbled that people wanted to keep supporting us after they saw the album was a go,” he said. He found the use of crowdfunding “empowering” for bands, and he sees it as a positive force in the industry.  Millar believes crowdfunding is going to be around for quite a while longer, and judging from the slew of bands that can be found utilizing this tool, one can assume that others agree.

But, it does not always work out so well for bands, because those that do not reach their goal do not get the money already pledged on Kickstarter.  Funding on their website is an all-or-nothing campaign.  It is timed, and in order to get the cash, you have to reach your goal by the end.  If you are looking to get what you can for your project, choose PledgeMusic or the flexible funding option on Indiegogo. In that instance, the founders get the amount that is funded once the time limit is reached, regardless if the goal is not met.

Protest the Hero and Townsend were so successful because of a perfect storm of fan support and amazing rewards.  The campaign needs to be strong, and as a band you need to offer something that people can get behind and rewards that will get them to pull the trigger and donate.

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