March 31, 2010 Crowd Funding and the Art of the Album Pre-Sale
By Chris Bolton via http://blog.hostbaby.com
Recently, I found myself in a situation most indie artists are probably familiar with. I was going to record an album and had no idea how I was going to pay for it. Despite the fact that recording has become a much more affordable medium over the past decade, it still costs a considerable amount to produce a quality recording. Even if you borrow, beg, or steal in order to secure free recording time, there’s still the mixing, mastering, and manufacturing costs. There’s been a lot written recently about “crowd funding,” a term born of another internet buzz word “crowd sourcing.” Crowd funding is as simple as it sounds. It simply means to fund a project by gaining small donations from a large group of people.
Sites like Sellaband.com, Slicethepie.com and Kickstarter.com have emerged as the social networking conduits between an artist and their potential micro-investors. Artists create profiles and spec out the money needed to accomplish their goals, and site members are invited contribute a few bucks if the project seems worth while.
In a nut shell, artists are beginning to look at their potential fans as potential patrons. While most musicians go into debt in the studio with the vague hope that their fans will dig them out after the album is finished, these sites promise the possibility of raising capital up front. What a concept, right?
Now, while these new crowd funding sites are great (and I encourage folks to try them out). I wondered if I could do something similar on my own. I wondered if I could simply set up a paypal button and start selling the album before the album was even recorded.
Granted this isn’t a brand new idea. People buy concert tickets months before an event. People pre-order books on Amazon before the book has been released. We all buy dinner at a restaurant before it’s been cooked. Why not pre-sell your album before it exists?
Not-so-surprisingly, this method has been relatively successful so-far (and this from a band that hasn’t released an album in 10 years). People who have bought the album tell me they’re excited for its completion. They’re literally invested in it.
Buying an album before it’s been recorded does pose a slight risk to the buyer. What if it never gets finished? Or what if it’s a bad album? But if the album is priced reasonably, the worse case scenario is they’ll be out some pocket change.
One of the unintended benefits of this selling method is the introduction of scarcity into a market where digital technology has made this concept nearly obsolete. An unfinished album is about as scace as you can get. You can’t copy, share or pirate an unfinished album. An unfinished album, if not properly supported, will never exist. If your fans felt that buying your album was essential for it to come into being—don’t you think they would pay more? I’d be curious if other have had success in crowd funding and or pre-sales.
Check out the HostBaby Blog at http://blog.hostbaby.com
If you’re interested in following Chris’ fund raising efforts for his band Nervous on the kid, you can visit his website here.
music marketing, music promotion | tagged DIY, album funding, crowd funding, pre-sell
Reader Comments (14)
You've inspired me to give this a go in the genre of hip hop.. where the fans are used to downloading or they don't really relate to distinctly different marketing methods.
I actually wrote a blog about how hip hop fans are resistant to these sort of models...
What’s Wrong With Hip Hop Fans? - http://universalindie.com/whats-wrong-with-hip-hop-fans.html
but i'm going to give it a try anyway...
I'll be curious to hear how it goes. I'll check out your article too :)
Chris B
Great post! This is such an interesting concept to me -- it's like how you always talk about ways to get your fans more invested in the music...no better way than literally making them investors. I know I feel more intimately tied to the work of charities that I give money to, it would totally be the same for a band, I bet. Also, I bet those people will be more likely to evangelize to their friends because they are really part owners!
Let us know how it goes!
IMO the best thing about crowd-funding/pre-selling your recording project is you get a solid idea of the demand for your music very quickly, before you invest a lot of time and effort.
If the demand is not there, it could be that you need to gather more fans first, or need to write more/better songs. Maybe you should release an EP instead of an LP. Whatever the result, if there's not enough demand, you should think twice before forging ahead with 1000pc run of a 14-track album, unless you like using boxes of unsold CDs as office furniture :)
It will be interesting to see the if the crowd funding option becomes the primary records of the future are made. Either way, getting fans involved before the product hits the shelf is definitely a must for the future.
Sites like the ones listed above are great but none of them offer your fans/sponsors the option to sign up to your newsletter. This should be crucial for anyone who wants an update on that album they just prepayed for????
Now if you look over those sites you also see that they go beyond the prepay of an album your fan/sponsors can also pay for things like names in the credits etc. So just doing your basic PayPal button isn't enough. I actually wrote a blog post on setting up your own custom Fan Funding page
http://blog.evolutioncoop.com/2010/03/diy-fan-funding.html
where I suggest making your list of options and then using PayPal's add to cart buttons. This allows your fans/sponsors to actually get more customized options then any of those sites listed above can offer.
I'd certainly like to see this becoming a scaleable model, if only because it's one of the few things suggested that might actually work.
I feel quite strongly that marketing such efforts as pre-sales is the only sensible way to do it. When Sellaband flopped earlier this year, I wrote a brief speculation as to why this happened (confirmed to some extent by later declarations from the interested parties). One of the problems I saw when I was active on the site was that investors were buying into albums with the view of making a profit. This did not happen and it put a damper on further investment. Pre-sales are simply a declaration that the investing fan will get a copy of the album - something that should be within your control.
I've got three pieces of advice with regards to fan-funding:
1. Work within your means - set the financial goal at something your fan base can reasonably come up with; be conservative especially when trying this for the first time
2. Be mindful of time - you need to raise the money and get working quickly; there's nothing worse than keeping the people who have already contributed waiting forever
3. Be prepared to dig into your own pocket - if you're still short of your goal and no new financing seems forthcoming, either work with less or make up the difference with your own cash. Once you commit to such a scheme and get some initial interest, the album must come out. Trying and failing will probably mean a loss of trust that might make a future attempt impossible. Conversely, if you try and succeed, your fans will probably have fewer reservations about committing to future projects.
P.S.
Two ways that may help you increase demand:
1. Make and post demos of at least some of the forthcoming material - give your fans a taste of what they'll get.
2. Once the project is underway (that is: you're recording), keep your fans informed of progress - this will put those who paid at ease and might even encourage more buyers. Needless to say, you should keep the lines open right up to the moment of release (regardless of whether your original budget was exceeded) - you can always use some extra cash for better mastering or some slick packaging, maybe even promotion.
Awesome advice Krysztof!
Can I post your comment on the original article over at http://blog.hostbaby.com ?
Chris B
RE: Netvalar,
I used PayPal to create 3 payment options
$10 : you just get the album
$20 : CD +love You get the album and pay more than you have to
$40 : 2CDs + special gift (I don't know what the gift is yet)
I also promised that all pre-purchasers will get noted in the liner notes.
I also posted a rough mix. You can check it out here:
http://nervousandthekid.com/buy
Chris B
@Chris B:
Sure, no problem.
I've been thinking about doing something with my next album where pre-orders would get access to streaming live video of the studio as well as access to streams of current mixes & allowing comments posted. There are obvious problems with this at least on my end from a technical expertise standpoint (I have seen a lot of live streaming videos that are unwatchable due to internet hook-ups) & of course there's the question of how interesting is it really for some people to see me do 20 vocal takes in an hour....
Here's an article relevant to this discussion... http://www.digitalmusicnews.com/stories/040410pledge/view
@Brian:
Instead of doing live streaming - with all associated problems - why not just throw a camera into the studio and then edit out a digest of all the interesting (and funny) bits. Make it episodic - daily or weekly.
Watching a session from beginning to end would probably end up being more boring than entertaining for most people, but a documentary-style glimpse into how you worked on the recordings may be genuine value added.
As for streaming mixes and getting comments. - I'd suggest you wait until you're finalizing the songs. Too many people in the studio begets trouble and it'll probably be better for you if you already have a good idea of where you're going with the mix before you open the floodgates of public opinion. However, the extra ears of your fans could well give you an additional perspective on what you've done.
Hey, if they put down the money for recording, they're like the A&R guys!