November 2, 2010 An Argument Against Fan Funding
Let’s be honest. You don’t need the money.
Anyone can make a record for next to nothing these days. Almost any other hobby is more expensive: photography, mountain biking, even video gaming. When a teenager singing into a webcam gets exponentially more views on YouTube than your latest “professional” video, the answer isn’t more money.
You’re just not there yet.
(hey, don’t feel bad - I’m not either)
Tracking at Abbey Road Studios won’t get you there. Hiring T-Bone Burnett to mix your album won’t get you there. A full-day mastering session with Bob Ludwig won’t get you there. 10,000 pressed CDs with 18-page inserts won’t get you there. A $5,000 promotion budget won’t get you there either.
No matter how much money you throw at your project, we’re all limited by a stubborn principle called free market pricing. People are only willing to pay what a product is worth to them, not what it costs to produce. The intrinsic value of music is in free fall, and people won’t pay for it if they’re just not that into you.
So why are musicians flocking to fan funding (also known as “crowdfunding”) sites like Kickstarter, Sellaband, Slicethepie, PledgeMusic, and artistShare in droves?
My guess is that they figure “why not give it a shot”? Well, I’ll tell you why not, and offer a better option.
- It’s dishonest. I’m simply not willing to pretend it costs thousands of dollars to put out an album. If you can’t sell 100 CDs at $10 to pay for replication, make CD-Rs at $2 a pop, produce them on-demand, or go digital-only. Effective promotion doesn’t necessarily come with a price tag. And really, why should your fans pay to promote something they already bought?
- They own you. By entering into a partnership with your fans, you become accountable to them. Until you follow through on your promises, you no longer call the shots. As Hugh McLeod explains in Ignore Everybody, “The sovereignty you have over your work will inspire far more people than the actual content ever will. The best way to get approval is not to need it.” While some may actually like the added pressure, it comes with a loss of control.
- You could fail. Publicly and humiliatingly. Everyone will get their money back while you walk away empty-handed. Your fans may conclude that either your goal was too ambitious, or just maybe, your music isn’t as good as they thought is was. Your failure functions as a reverse testimonial. And then what? Are you really going to dump the whole project? If not, why hold it hostage in the first place?
We’re all adults here, right? If your project is so promising and you can’t scrape together $1500 from your “real job,” you could always write up a business plan and get a loan from the bank. Then again, they may just chuckle and offer to raise the limit on your Visa.
Fortunately, there’s a way to reap all the benefits of fan funding with none of the downsides: take pre-orders.
You can still create tiers with personalized extras, like phone calls with the artist, studio attendance, or a custom song. If you accept payments directly, you earn an extra 10% that would otherwise go to a third party. You can create a plan that scales with your goals (“if we reach 100 pre-orders, I’ll press CDs and all digital album sales will include physical CDs as well”). Or you can wait to add tiers until you reach certain milestones, so you don’t promise anything you can’t deliver. Best of all, you’re not locked in to anything. You can adjust your approach as you go based on fan response.
Taking pre-orders puts free market pricing on your side, by allowing you to create only what you need to fulfill demand. Best of all, there’s no “goal” to reach, so you keep every dollar. Risk is no longer a factor.
When is fan funding a better choice than taking pre-orders? What can an artist do on a fan funding site that they can’t do on their own? Let me know in the comments!
Brian Hazard is a recording artist with sixteen years of experience promoting his eight Color Theory albums. His Passive Promotion blog emphasizes “set it and forget it” methods of music promotion. Brian is also the head mastering engineer and owner of Resonance Mastering in Huntington Beach, California.
Reader Comments (57)
I can't believe the amount of contention in this thread over such a non-issue. Please. It's just a way to raise some money. Ignore the naysayers.
Do you have fans? Duh. You should be reasonably sure that you can hit your target with the fanbase you have now.
Does it fit? Is this the type of thing your fans will embrace? Can you pitch this in a way that aligns with your image? Can you set the right tone?
Do you have a backup plan? Which is more important to you: that your project gets done, or that someone else funds it? If your fundraiser fails, what then?
Feeling confident? Go for it, and who cares what anyone else thinks.
Feeling uncomfortable? Then don't do it. Find another way to fund your project.
Amen, Scott! Reason prevails.
Gorillaz Record New Album on an iPad
I think fan funding can be a good source for bands that are considering going with a label, but want to retain control. If you check the terms to some sites you are not giving up "control". That is the equivalent statement of saying Obama is a socialist.
I do agree that preorder can be a better option, but don't discount these new mediums as a way to excite fans to participate. It is another way to engage people.
Think about all those walk for hunger and other events. You could say they are a waste of time and money and that people should just give money, but in actuality they raise awareness and cause people to act who otherwise would not. It is a lot easier to have someone else push your cause then to push it on your own. These sites serve a similar purpose for some artists.
Feel free to chime in with your thoughts.
Brian
You have some valid points, but you are WAY off base with the cost of recording.
First of all, if you do not own a studio (not just a computer and USB mic), there is the cost
of studio time.
If you do invest in good microphones, professional software and hardware and plugins, it is thousands of dollars.
If you are not a "band" but a singer, you need to hire and rehearse a band. Professional musicians deserve to get paid to record.
If you are the songwriter, you need copyright form PA at $35 a pop, and then if you are putting out your own album, form SR for each of the songs on the release.
You may need to become a member of the Uniform Pricing Code association and own your own bar code number, pretty pricey, or you can buy codes from CD manufacturer.
You need professional photography for your album cover, liner, website or publicity campaign.
You need an EPK kit, a website, a music video, etc. to promote.
You may need an attorney, a DBA, a LLC, a bank account, an accountant, a pr person, etc.
All costly.
You need a printer and a CD manufacturer. Not all music is digital downloads.
You may need to belong to a performance rights organization.
To characterize releasing a CD as a $1,500 enterprise, funded by your day job, is way off the mark.
AND, you never addressed paying for the MASTERING of your recordings,which is usually at least $100 an hour.
It would seem the CDs you are referring to would be somewhat of a "hobby" orientation, and to suggest that by accepting funds from appreciators, one would either be dishonest or beholding is also FAR from the truth.
Music has always been FAN supported, whether by the King commissioning a artist in his court, or a record label signing a popular band to a "deal", unless one is already independently wealthy and can fund themselves, it is the only viable way to go, and with success "sales" which are also
fan supported drive the machine one creates.
It is unwise to mislead bands and would be recording artists by suggesting it is not expensive to record and release a professional record. It is likely at least a $20K or more enterprise to do it right and be able to market it effectively. It is to all the bands and artists, who have asked for less in fan funding or self-funding or family funding, to have succeeded with less. And, most record labels also BUY bands all the gear, which could easily add up to another $25K for the latest and greatest, or vintage cool sounds.
Certainly, enterprising and creative minds can do miracles with less funding. Personally, I would not ask for less than $10K to complete any project I thought was worthwhile. Even if I were to earn the $10K back and reinvest in other bands on the same stie that funded mine, I am looking at selling about 12,000 units at $10 each. If I cannot sell that many, why I am recording and releasing an album to begin with on a world market with billions of customers?
It would be better to give bands more money and more advice about how to use it to do the right things to promote it. The right legal steps, the right marketing steps, the right recording and mastering steps.
If someone offered me $1,500 to do a recording, I would use it to go to Hawaii and write some songs on the beach, and then came back, well rested, and found the other $20K I needed to really do it right!
The cost of studio time is moving towards zero, exactly because nowadays there's more and more ways of having a good quality home studio (including computers and mics).
If you don't invest in a good guitar you don't have a good guitar, if you don't invest in a good mic you don't have a good mic. That was allways the case, but this calculations are obviously not taking into account those kind of expenses - how could they? If you are a band with three guitars, you have regular expenses with string kits for three guitars, if you are a band that instead uses a soft synth you have, er..., the cost of electric power, for instance. Regarding "professional software and hardware and plugins", it all really depends, once again. There are people out there (I am an example) that only use free software, for instance.
Dynamics change. You'll notice that music is tending to be more band-centric instead of band-for-hire-centric (meaning: 5 folks getting together and being a band, instead of one person having his project for himself and then hiring stage or studio musicians).
*cough* I don't know not even one country when you must register the copyright of each song you write. If you want to play with old rules, fine, but that's not mandatory.
UPC's aren't obligatory, but sometimes you need one to do certain things with your release. Because there's a demand there, there are also solutions. For instance, CDBaby sells UPC barcodes that cost $20 for album or $5 for single song. Yes, it's a cost, but it's not much.
You don't need it, but you might want so. You can make a deal with a graphical artist directly, or you can go "free" even if not DIY, and use free images (check, for instance, http://www.everystockphoto.com/ ). Same goes for website and publicity -- there are numerous free services, you just have to look for them.
Besides the music video, it's all stuff easy to DIY. The music video, in the case of those who are public performers, it's a question of grabbing a video capture device, record a show, then cut&paste on your favourite free video editing tool, and there you have it, a zero-cost video.
What for?
Database Administrator?
What for?
Don't you have one already?
DIY.
Bingo, there's where costs really exist. If you want to have a conversation regarding this specific item, which is a theme that I really like to study, let me know...
You may want to, but you don't need to.
I don't think so. You can use less than that to pay for a 1000 copies limited edition CD, which is the only mandatory cost we've seen until now.
DIY.
If you to a 1000 copies run and sell 50% of that for the price you intend to ($10), you have already money to do a bigger edition. Anyway... 12K units? In how much time?
Brain,
Great insight. I have something to share.
Let’s be honest. You don’t need the money.
I am really out of clue what does it mean. Say I am a non performing artist, I need to pay bills if I would like to produce an album. I understand its highly subjective and relative to the kind of music one produces.
Yes failing sucks I believe a crowdfunding campaign is not for one who has a fear of failure. Its all about an artists conviction. If one has a solid conviction, he or she is not suppose to think of a success or of a failure. Its all about following one's passion.
Taking Pre Order is really great and I wish things should work the way. The problem is not getting a pre-order, it doesn't work that way in market unless you are Lady Gaga.
A campaign with clear objective is a prerequisite for bagging pre-orders too. Taking pre-order is not something like placing a widget on site, on blogs. Its all about spreading words about your music and about what you produce.
In my personal opinion, a crowdfunding campaign helps to reach new fans, to collect pre-order etc., if it doesn't one should check the philosophy of his or her own career.
Almost any other hobby is more expensive: photography, mountain biking, even video gaming. When a teenager singing into a webcam gets exponentially more views on YouTube than your latest “professional” video, the answer isn’t more money.,/b>
That's right. But a me too musician doesn't deserve a mention here, in my opinion. Technology creates many fake professionals in every industry, not only in music industry. Because,
I read ArtistShare projects have received 5 Grammy awards and 15 Grammy nominations to date. In 2005, American composer Maria Schneider's Concert in the Garden became the first album in Grammy history to win an award without being available in retail stores.[2] The album was ArtistShare's first fan-funded project.
So, the point is not crowdfunding, its who and how runs a campaign for what and where.