Lecture notes on Fan Funding

The Internet has always held lots of promises for musicians. In theory they can communicate directly with the fans, using social media sites like MySpace (a failure), Bandcamp (more successful) or Facebook. The problem though, has been turning likes into bucks. For a long time prescence on the Net was almost synonymous with putting up your music for free, getting virtually nothing back. But now things are changing.

In a lecture for my music history students today, I spent some time talking about so-called fan funding, or crowdfunding for music, and this post is a summary of some of the points from this lecture.

Crowdfunding, a paralell to the crowdsourcing that has given us for instance Wikipedia, has been around for some years, but has mainly had its impact in software development and technology. The arts are slowly coming to grips with the potentials. A great success story which often is told is about Amanda Palmer, one of my favorite artists, who in a kickstarter.com campaign to finance her new album Theatre is Evil asked for $100 000, but got $1,2 million (!!).

Palmer also had huge success with other campaigns.

In Norway the campaign to fund the follow up to the famous computer game Dreamfall is well known.  By the way - this is both a story of a successful funding campaign and the story of a failed product. The two aren'n necessarily the same.

Success rates

This kind of success stories are frequent on the net. What is not so frequent are overviews over actual success rates for these kinds of projects. If we are to believe Kickstraters own stats, the success-rate is rather high, but I've not seen any proper overviews on this matter. Thoughts and perspectives will be highly appreciated!

To compare: In the old days of record business, various sources tell about success rates around 10% (i.e. Frith 2001). This means that 90% of all musical projects were financial failures. The music business survived only because of incredible profit from the top 10%. Today the success rate is even lower. An article I read yesterday claimed that only 1500 songs out of 8 million published generated 40% of the turnover in the American music business. That's incredibly low! Some analysts claim that the relationsip isn't any more 90:10 but rather 90:1.

Our case: Keldian

In the lecture I had invited Chris from the power metal band Keldian to talk about their experience with the fan funding of their third album (to be released in two days!). Keldian might not be a particularly innovative band, but it is firmly placed in the melodic metal tradition. The music is well played, well sung, well produced and any potential criticism for lack of novelty is countered with memorable melodies, good arrangements and lots of energy.

Keldian released their first two album in "the normal way" putting out CDs on an international label (Perris Records) targeting the heavy metal audience. With these albums, especially Journey of Souls from 2008, they built up a fan base and gained recognition in the heavy metal community.

A Keldian pumpkin made by a fan in Illinois, anticipating the release of Outbound on Halloween.

After some years of silence they wanted to put out a third album, Outbound, but by this time the marked had changed. Even among heavy metallers fewer people bought CDs, and it got harder to cover the costs for recording a high quality album. Keldian felt this strongly since they're not a touring band, and thus could not counter the lessened income from recordings with higher concert prices.

In early 2013 the band got introduced to indiegogo.com, another crowdfunding site, and started out a campaign for their third album. They had put up a modest goal ($4200 - in order to cover drum recording and mastering) but were surprised to see that not only did they reach their goal; they surpassed it, earning a total of $6808 on the campaign (minus the 4% fee to indiegogo). These are not astronomical figures but enough to keep a modest metal band from Norway up and running.

Chris told the students about how he got the idea for this funding scheme from seeing it work in the movie business. He also talked about the importance of putting up realistic goals, and trying to keep the project simple. A key element in crowdfunding are so-called perks, little extra things that the more generous funders will get. Chris made a point out of  Keldian using few perks; the main one being a signed special edition CD at $39. Amazingly all of the 150 available sold out quickly. Palmer's list is a bit more adventurous, but keeping it simple in the beginning seems wise.

The last point, which might be the most important, is that for crowdfunding to work you need to already have a following. Keldian's facebook-page had 1000 dedicated followers, but the success in translating likes into bucks only worked because the band had a close relationship with their fans.

Keldian's story correlates well with Mark Thorley's analysis of Artistshare users - a study that I put on the course syllabus. In his article, Thorley notices that most artists on this platform are limited to a rather distinct musical segment (in this case: jazz), and that they already have several previous releases behind them and a regular group of followers that can be mobilized.

Thus the final lession must be: no fan funding without fans.

The future

It will be interesting to see the development of fan funding in the future. Will this become a well-established way to work around the shortcomings of the current net based echonomy? Or is it just a fad that will pass? Any thoughts, experiences or perspectives concerning this will be highly appreciated. 


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