Product Code Database
Fan-funded music is crowdfunding for music.Van Buskirk, Eliot (10 March 2008). "SlicethePie Unleashes Its First Fan-Funded Album". Wired. Often, fan-funded music occurs in conjunction with direct-to-fan marketing.Chaney, D. (2010). "What future for fan-funded labels in the music recording industry? The cases of MyMajorCompany and ArtistShare". International Journal of Arts Management. 12 (2): 44-48. Fans of music have the option to donate and collectively raise money with the goal of jump-starting the career of a given musical artist. The fan-funding of music occurs primarily through web-based services using a business model for crowdfunding. Fans are typically given rewards based on their monetary contributions.
| First crowdfunding site for music |
| Disburses funds immediately |
| Takes 5% flat fee, Stripe takes additional 3-5% |
| Enables fans to support and engage with artists and creators |
| Can donate profits to charity. International. |
| Takes 8% total funds accumulated. No screening process. |
| Currency in euro. Partners with SoundCloud. |
| Distributes via digital music platforms |
Indiegogo
Indiegogo is a crowd funding portal that allows users to create a page for their funding campaign, set up an account with PayPal, make a list of "perks" for different levels of donation, then create a social media-based publicity effort. Users publicize the projects themselves through Facebook, Twitter and similar platforms. The site takes a 4% fee for successful campaigns. For campaigns that fail to raise their target amount, users have the option of either refunding all money to their contributors at no charge or keeping all money raised minus a 9% fee. Unlike similar sites such as Kickstarter, Indiegogo disburses the funds immediately, when the contributions are collected through the user's PayPal accounts. Indiegogo also offers direct credit card payment acceptance through their own portal. Those funds are disbursed up to two weeks after the conclusion of a campaign.
Kickstarter
Often described as the most successful and well-known crowd funding platform, Kickstarter has been featured on CNN, The New York Times, Time, BBC and Wired. Kickstarter is a crowd funding website that has successfully funded everything from films, games, and music to art, design, and technology. Project creators choose a deadline and a minimum goal of funds to raise. If the goal is not reached by the deadline, no funds are collected. The platform is open to backers from anywhere in the world and to creators from the US or the UK. Kickstarter takes a 5% fee and Amazon.com takes an additional 3%.
PledgeMusic
PledgeMusic was an international crowd funding platform geared specifically toward musicians. Users (pledgers) receive exclusive content in exchange for their contributions to artists fundraising campaigns. PledgeMusic does not retain any ownership or rights to any music created through the platform. Funding transactions occur only after a goal is successfully met. The site is staffed by people in the music industry and maintains partnerships with major players in the digital and physical music spheres allowing for numerous options to help record, produce, manufacture, market, and distribute artist's music, merchandise, and tickets. The site charges a 15% fee. "about". PledgeMusic. Retrieved 27 November 2012. PledgeMusic operates on two types of artist campaigns, direct-to-fan and pre-order campaigns. In a pre-order campaign, fans are charged immediately upon pledging. This type of campaign is designed for labels and artists who have already completed a recording, and are looking for a strategic way to pre-sell and market it. "FAQ" . PledgeMusic. Retrieved 26 November 2012.
RocketHub
RocketHub is an established crowd funding platform open to anyone including musicians. Project holders on RocketHub have the option to keep raised proceeds even if the fundraising pledge was not successful. RocketHub is a completely open platform, meaning that anyone can create a fan-funding campaign and there is no screening process before the project goes live. The site takes an 8% commission off successful projects.Ostrow, Jonathan (16 August 2010). "Musician's guide to Fan-Funded Music". Music Think Tank. Retrieved 27 November 2012.
Sellaband
Sellaband was a crowd funding platform that allowed registered artists to use a direct-to-fan approach to finance albums or concerts. Artists will pledge an amount, the minimum funding target being Euro3000, and the maximum funding target, €250,000. Artists may also choose if they want to integrate a revenue sharing option into their funding. The minimum incentive is a download.
Corite
Corite collects five percent of the funding fee provided to an artist, and then another five percent of the royalties that are paid by streaming services. The company has raised $6.9m from investors.
Some claim that artists overestimate the cost of recording an album and dishonestly solicit more money than they need via fan-funding. With advancements in digital technology, recording equipment has become increasingly compact and more affordable. It is no longer a requirement for an artist to need a large recording studio that houses oversized equipment. This increase in accessibility that the everyday musician has today has made it possible for artists to record their own albums from their homes. Since there are no restrictions for what artists can ask for, it is not unheard of for artists to inflate the expected costs and then keep the extra money as profit.
Critics also point out that the fan-funded music model has turned bands into marketers and sales personnel. Artists must be able to develop personal marketing strategies in order to get the money to even begin working on their music. Artists must invest much time and effort into creating a campaign that engages their fans and gets them to donate to their project. This can prove difficult for any artist to create a campaign that does not come off as "a shrill and desperate-modern-day pan-handling by entitled go-getters." While fan-funded platforms are accessible for any musician, they have become over-crowded with both artists and anyone with an idea. "For every legitimately exciting pitch there are dozens of musicians, filmmakers and designers pleading for funds to complete ill-conceived projects."
Running fan-funded campaigns cost bands a large sum of money. They must pay for video production for the video that every campaign has, a producer and an engineer to mix and master their album, and fulfill all of the rewards promised to their fans as well as the shipping on them. Often the money made off these projects ends up going to paying the costs of running a successful fan funded campaign. For example, a large portion of the $1 million that Amanda Palmer raised went into funding her Kickstarter project itself. Artists such as Palmer have huge fan bases to appeal to for money, but for the average artist raising that kind of money isn't a reliable method.
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