The Value of Asking
Inside the music industry, revenues have plummeted as listeners turn to YouTube, Soundcloud, Spotify and torrent streams as ways of getting free tunes. Record companies have been forced to cut back on the number of artists they produce, promote and market. So new and smaller acts go independent, using new online platforms to find fan bases around the globe. And the money? They just ask the fans to help fund what they enjoy.
"Crowdfunding" or "crowdsourcing" has become the latest trend in DIY music financing and management. With the phenomenal success of websites like Indiegogo (2008) and Kickstarter (2009), online platforms allow individuals to raise money for any venture, from founding a library to building a space shuttle. Musicians have used it to produce albums, but since record sales rarely pay the bills anymore, musicians have found other ways to use the internet’s "wisdom of crowds".
On Pledgemusic (2009), fans can support an album, tour or upcoming project. The artist presents the idea, often accompanied with a video and description of the project. Composer Casey Crescenzo, for example, has about seven weeks left to fund his trip to the Czech Republic, where he hopes to record his first symphony with the Brno Orchestra.
"I’ll be sharing blogs, pictures, videos, rough tracks and more with you throughout this whole process," he writes. This is what has made this financing so successful. In return for your pledge, you get access to "exclusive merchandise and interactive experiences."
This is what distinguishes crowdfunding from simply passing the hat: In essence artists can offer anything from a digital high five to hand-written lyrics sheets, or VIP tickets to an upcoming show or a private concert. At the moment, Crescenzo’s project is 88% funded. Those interested can support him over pledgemusic.com until 15 October.
Big dreams, small pockets
While this trend has taken hold in the U.S., U.K., Sweden and Norway, Austria has yet to see any big successes in local crowdfunding. In Vienna, a locally-based folk musician, called Boxer John is currently attempting this new form of financing. After struggling with his former label while recording his first album, he set out on his own to "gain freedom in the way this album will be produced, distributed and marketed." As a novice in this new funding frontier, he has improvised a crowd funding campaign for his album Realms of Reassuring Reality.
But possibilities are limited in Austria. Not all platforms work here, for example Kickstarter is only available in the U.S. and UK, while Indiegogo and Pledgemusic are global.
There are also risks. It’s not a simple piggy bank. Some sites, like Kickstarter or Pledgemusic only pay if the pledge goal is reached, if not, the project doesn’t get funded. With Boxer John’s goal of €2500, it was "all or nothing". Of course if the crowd donates more, the sky is the limit. Amanda Palmer, American indie rocker and former member of the Dresden Dolls, set the record in the realm of crowd sourcing when she raised over $1.2 million from fan donations for her latest album, when she only sought $100,000. In a recent TED talk, Palmer said it was her years of performing as a street artist that had taught her the "value of asking."
Big money: Go live!
The new trends are in a sense, a case of "back to the future", as musicians didn’t always live off record sales, of course.
Until the end of the 19th century and the advent of the gramophone, the money was in the concerts, as well as the sale of sheet music, as pianos became a fixture in middle class homes.
While commercial vinyl dominated the market until late 1980’s followed quickly by cassette tapes and CDs, recording held its own until the birth of Napster in 1999. Still, being able to say "I saw them live" has always trumped a recording.
While it’s hard to wean the music industry off the recording model, the money is increasingly in filling concert halls and stadiums.
Even big names need to know where their fans are so they can maximise ticket sales on tours. In 2012, after releasing her worst selling studio album of all time, Madonna had the highest earning tour of the year, with $228.4 million in ticket sales according to music industry magazine Pollstar.
Performers rely heavily on Youtube, Facebook and Spotify, all of which provide data on where fans click on their videos and songs.
Austrian music manager and promoter Thomas Meyer of Yellow Hat Promotions thinks that with recordings taking a back seat, the approach has to change and the artists can’t do it all themselves. "Musicians should do what they do best," he said, "make music." He and programmer Dominik Danninger have dreamed up a way to allow artists and fans to connect and show promoters and bookers where the performers have the biggest fan base.
Their brainchild, Stagefy, would allow fans to request that an artist or group perform in their area. Other fans could join in and promoters could see where the pull is strongest.
A platform like this is especially important in Europe, says Meyer, as "promoters in other countries are not aware that a fan base exists for an act in their country."
The site would act as a new form of social (and promotional) network. Artists would be able to link all existing online presences on Facebook, MySpace, Bandcamp or Soundcloud to this site and have a better chance of getting fan support, interacting and reaching venue promoters.
With crowd funding, musicians like Boxer John get to create the album they want and fans get exclusive perks from supporting an artist they love. Ideas like Stagefy help artists connect with fans and promoters to spread the music, by tracking the virtual fan base. Almost serendipitously, the medium that compromised musicians’ revenue – the internet – could be the industry’s new driving force, helping bands find and interact with their fans, making live performing more lucrative.
Crowdfunding isn’t begging and crowdsourcing isn’t espionage. It seems like the perfect con: Everybody wins.