Ever wanted to be a part of your favourite artist’s album even before it has been released? Ever wanted to do a Skype session with your idol and feel that you contributed to the process of making his album? Ever bought a signed Gibson guitar that your favourite artist used, knowing that on doing so, you contributed to making his debut album? Than you will probably be a music fan in love with crowdfunding.
For dedicated music lovers, crowdfunding is a great way to help artists. It’s pretty easy too. You visit a site such as Pledge Music, pre-order a CD, and the money you spent is added to the fund the artist needs. Artist happy, fan happy, crowd funder happy. Pledge Music even makes sure that even more people are happy; they stimulate artists to pay a small percentage of the project fund to charity. Sounds like a perfect world. But what about support, management, social media and A&R management for the artist? In this new business model, even a modern day record label has its role to play.
Let me start by saying that I am in favour of crowdfunding. Yes, an employee of a record company / distributor is one of the happy people, thanks to crowdfunding. It helps to build a good user experience for the fans, who eventually become more dedicated. It helps artists reach their goal; great albums are being produced this way. And of course, record labels are keen on seeing new talent on a crowdfunding site as it can function as an A&R extension. Finding new talent is always valuable, taking care of it even more so.
Crowdfunding can also be perfect when there are indeed no record companies around that are willing to make an investment. But it doesn’t always have to be the case that a label is not willing. A record label can also simply be unaware of new talent. Unfortunately, not all of the huge number of demos a label receives end up being a release.
As I said, I’m all for crowdfunding, but it can also be a bit tricky for new talent. First of all, tracks or ideas that are being shared are not protected by copyright. People can steal a good idea, and all efforts are gone to waste, as there is little to do about it. Besides this, a new upcoming talent might have difficulties estimating the fund (and spending it) for the project. Timing a new release is also something that needs guidance; new talents who have raised their funds suddenly also need to know when’s the best to time a release. And more importantly, take enough time to market it.
And as for funds and investments, not all crowdfunders are free of charge. Some take up to 15% of the raised fund. Yes, record labels may sometimes not be willing to invest in new talent; therefore artists resort to crowdfunding. Whether the crowd, or a label comes up with the investment, quality is key to the process.
So how can crowdfunding platforms and labels co-exist in the music industry?
A&R managers can discover artists and bands that use crowdfunding. They bring experience, expertise and knowledge to the table. Record labels have been around for so many years; it’s a fully-grown industry. Upcoming bands must not forget this; they should be able to benefit from it.
A record label can take care of all matters that can slow a band’s creative process, ranging from social media endeavours, licensing and sales to accounting and making sure all beneficiaries from an album get their fair share of the money.
Crowdfunded projects sometimes get delayed, or even cancelled, when there are setbacks. Think about software or instruments failing, causing the budget to be insufficient. Or a co-producer that, for some reason, decides to leave. Crowdfunders are really reliable when it comes to re-funding all fans in case of failed projects, but record labels are strong when it comes to replacing instruments, producers or anything else that breaks down or needs taking care of. Again, the great strongpoints of crowdfunders combined with the expertise and craftsmanship of record labels create a solid environment for bands.
I think that we should not forget the most important reason why all parties above exist: to serve music lovers. What is more important than the core of the business?
Therefore, I suggest another evolution for record labels. Label managers: feel free to embrace a crowdfunder instead of fearing it. Try keeping a close eye on crowdfunding sites; high quality music is all around. These bands and artists could be new signings in the future.. If you look at it that way, you can even say ‘artist happy, fan happy, crowd funder happy… and Record label happy’.
I see it as a great opportunity to take music business to a next level: if more good music is discovered, more people who love it will be touched by it. Which leads to more people wanting to Skype chat with a band, buy a signed guitar or pre order an album. Happy faces all around!
Find out more about crowdfunding at Midem 2015: Indiegogo’s co-founder Danae Ringelmann is confirmed as our first keynote speaker! More info here.
Top photo via iStock