The Rise Of Crowd Funding In The Music Industry

Over recent times it has become a lot more evident that crowd funding is becoming a bigger influence in the music industry. At first I believed this to be more underground and unsigned bands

Since paying closer attention to the crowd funding projects that have been created it has shown be that this is far from being secluded to the newer bands.

Here are some examples of bands that have created their own crowd funding campaigns over the last year (major bias towards hard rock and metal bands, it is the style of music I prefer after all):

At the time of writing many of these are actually still ongoing. I have considered the motivation that these well-respected and successful artists and there appears to be numerous driving factors.

There are numerous reasons that I can muster that may explain the rise in crowd funding.

Inability to Gain Backing From Record Labels

The first reason and appears to be evident is that at times artists have issues gaining full backing from a record label. For example Katatonia decided to use crowd funding on Pledge Music to help secure funding a re-recording of Dead End Kings. I believe that a record company is highly unlikely allow a band to use 1 of the albums they are contracted too to be used for a re-recording.

A similar possibility is that an artist is coming to the end of their career and cannot obtain a good deal with a label directly.

Bands Wish To Deal With Fans Directly

For many years bands have aired their frustration with their record label. The industry is littered with stories of the lack of support that they received (of course there are 2 sides to the story and is rarely clear cut).

In the past bands such as Radiohead have toyed with the Pay What You Wish model however many bands had a negative experience with this. Many people choosing to pay £0.00 (and yet people still pirated it, I really don’t understand the logic of pirating an album you could get legitimately free). The next potential step (and appears to have come just at the right time) is crowd funding. Using such a model can have a couple of outcomes. It can allow a band to directly cut the label out of the equation (but it does mean dealing with distributors and suppliers personally or having a lot more work on your hands).

Gaining A Better Deal

The other possibility is increasing your hand with a label. If you have an album that has already been paid for you might be able to seek a better deal for the label as they now only need to deal with promotion and distribution.

As a music fan the increase in crowd funding can be a blessing and a curse.

On a positive side I can now get more for my money, I can also choose what level I would like to support the band and depending upon the level I support at I may actually get some quite rare merchandise or experiences.

Unfortunately there are some negatives as well. Sometimes a fan can have a very negative experience. For example 1 of the projects I personally backs was Obituary’s Kickstarter campaign. On most campaigns the place to find the most recent news about the project is in the project updates (and sometimes these are exclusive to the backers). In Obituary’s case they have chosen not to  keep the backers updated at all. Instead they have chosen to keep their follower on Facebook updated. Due to this level of communication there were some beliefs that the project was abandoned. I personally believe this i very disrespectful to the people who have helped make the project happen.

For anyone planning on creating a crowd funding project there here are a couple of things to keep in mind:

Have You Completely Thought Out The Process

Do not go headstrong into creating a campaign. Ensure that you do the necessary research. For example is it conceivable that you will be able to deliver on your promises, are you prepared for the amount of work that will be involved in the project (for answering questions, promotion and delivering the end result) and lastly have you researched the different platforms that are available to (for example Kickstarter, Indiegogo and Pledge Music you and weighed up their pros and cons.

Ensure That Backers Are Kept Informed

Ensure that throughout the process that backers are kept informed as to the progress. Not only will this help satisfy backers and ensure they have a good experience but it may also help convince people to back you and those that do back you may be more encouraged to help promote the campaign.

Ensure also that the communication and updates do not end when the project ends. Ensure that the communication continues at least until the product is delivered. You should also keep an eye on the project for a while after to ensure that there have been no issues.

You may be fortunate to find more engagement from the backers (and potential new fans) moving forward to other projects.

Be Honest With Your Backers

This really should be self-explanatory but at times gets missed. If something happens that causes a problem make sure you tell your backers promptly. By sitting on the information you would be showing bad faith to the backers and they will be reluctant to believe you in future.

Ensure That The Rewards Are Good

By ensuring that you have a good variety of rewards priced at a good level will help encourage people to back you. If you have a varied reward structure this may also help increase their pledge level giving you a better chance of success.

What you really should not do is for example have 1 or 2 reward levels at say $10 then a 3rd that is at $1000. Ensure that you have rewards that more evenly span the scale. If you do not then you are missing an opportunity.

1 strategy that I have seen work well with some campaigns is the trickling of new rewards. If someone sees a campaign but is sitting on the fence they might be enticed with a new reward that has become available.

Many people also use stretch goals to great effect. This gives the backer more for their money and gives them bigger incentives to help promote the campaign. Some of the crowd funding platforms also allow people to promote campaigns they have backed. I have seen some campaigns use this to further push people to help promote a campaign (1 such example is the campaign for MixerFace.

What are your thoughts around crowd funding.

Do you like the idea of established bands using such methods?
Have you backed any project? What was the experience like?

Tell us your thoughts