Crowdsourcing for Bands: Now How Much Would You Pay?

The Georgia Straight, a local weekly alternative paper, recently ran an opinion piece by Michael Mann about bands that use crowdsourcing to raise money to subsidize tours or records. The title might give you a clue as to its perspective: “Boo hoo, broke bands, quit asking for charity“. The story generated 425 comments, most of them extremely negative – not too surprising when the article contained statements like this:

“Crowdsource a little business acumen and produce something people actually want to give you money for…What you’re asking for isn’t patronage. It’s a public guilt trip that perverts the DIY ethos and shows a tremendous lack of respect to your friends and fans.”

Admittedly the article was written in an over-the-top style designed to be inflammatory, but it seems to have hit a nerve. A few weeks later, perhaps in a bid for appeasement, the Straight ran a story titled “Making a case for musicians engaged in crowdfunding”, which featured musicians who had successfully used crowdsourcing to support their projects, and who had a positive crowdsourcing experience both personally and professionally.

The current issue of Record Collector, a great magazine out of the UK, also has an article on “fan-funded releases” (the text of the article isn’t online, but there’s a scan of the pages here). The article dates crowdsourcing by bands to 1997, when the band Marillion was refused money by its record company to subsidize a tour. A fan used Internet newsgroups to appeal to other fans to donate cash for shows, and the band raised $60,000 and went on its tour.

Based on that success, Marillion decided to try financing its next album through donations from the 2,000 members of its fan club. That worked too. In 2001 the band started running its own business, and since then has released three CDs and an upcoming CD/DVD/hardback book package, all financed through pre-paid orders. Marillion runs its campaigns through its own website, but other musicians use sites like PledgeMusic.com and Kickstarter.com. Ginger, lead singer of the Wildhearts – whose new triple album got enough pre-orders that it will be in the UK Top Ten record charts when it is released – is quoted in the article describing his band’s experience with crowdsourcing: “It was a risk for all of us. None of us were expecting the result we got.”

I’ve never participated in a crowdsourcing project, from either side, but I’m intrigued by how it challenges the conventions of the music industry. Crowdsourcing doesn’t need a record company trying to guess what people will or won’t buy. The only mediator between the band and the consumer is whatever organizational structure the band chooses to facilitate its project. The band decides what they want to produce, and assigns prices to various parts of it; the consumer decides what part of the product they want – and, if they think the assigned amount is worth it, hands over the money. If the consumer doesn’t want the product, the project doesn’t happen.

Marillion has crowdsourced funding for its records and tours since 1997. (Credit: radiobracknell.webs.com)

Crowdsourcing makes a lot of sense for a band like Marillion. Traditional record companies want acts that will sell big and sell fast. Marillion’s most successful chart single was back in 1985, so no major record label is likely to be interested in them. Nevertheless, Marillion and other acts that have successfully used crowdsourcing to support their activities – such as the Ben Folds Five and ex-Jam bassist Bruce Foxton – might not be selling as many albums as someone like Katy Perry, but they’re making a living and maintaining a career.

However, I can see a couple of downsides to this model – other than the humiliation of not getting your project funded. Someone I worked with in the music business used to say, “One thing that sells a lot of records is someone else having a hit record”. What he meant was that if people go out to buy a record, they’re obviously interested in buying music, and in the process of finding what they want, they often come across something else that appeals to them, and they buy that too.

Now admittedly this was in the days of record stores, where it was a lot easier to randomly stumble across new music. But I wonder if bands who rely on crowdsourcing – especially bands who are starting out – run the risk of missing  those potentially lucrative random opportunities. If you are only selling your record through pre-orders, the record’s distribution is relatively limited. Your business model can build in the cost of producing extra units to sell in record stores or online, but pre-orders mean you are pretty much relying on the same group of purchasers over and over again, rather than expanding your range of potential consumers.

The phrase “leap of faith” comes up a lot in discussions of crowdsourcing, in relation to the band deciding to try it. But crowdsourcing is also a leap of faith for consumers. They don’t know what they’re getting beyond the format (e.g. single, album, tour) and whatever goodie comes along with the amount of money they pledge. So the artist is under real pressure to produce a satisfactory product, because they’re directly accountable for it. There will always be maniacal fans who will pay no matter what the product is or how lousy it is. But disappointed buyers may not invest the next time – and that could be a huge problem for an independent act without an established fanbase.

After reading these articles, I’m now really interested in crowdsourcing and am going to do some more investigation into how and whether it works. In the meantime, unfortunately for me, my idol Kate Bush has enough money that she doesn’t have to turn to crowdsourcing to finance her work. My savings account would be in serious trouble if she offered to play at people’s houses in exchange for pledges of money. But I can dream, can’t I?

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