How Musicians Are Using Crowdfunding to Ditch Record Labels
Until recently, working with a record label was a necessary evil for most musicians. Few artists had the financial resources to record an album in a studio, market and distribute their product, and finance a tour on their own. However, with the rise of cheap, high-quality recording equipment, digital music downloads, and crowdfunding sites like Kickstarter and IndieGoGo, that’s all changing. Many artists are ditching record labels — and making a go of it on their own.
Whether you’re a musician, an inventor, or another creative professional, you can finance projects with crowdfunding instead of relying on investors or corporate sponsors. Here’s how.
- Build an audience. Many established artists, such as the veteran rap group Public Enemy and Victor Krummenacher, a founding member of classic indie band Camper Van Beethoven, have said goodbye to record companies in favor of crowdfunding. They now count on fans to help them sell records. Tours, social media, and free digital downloads can help newer groups build the audience necessary to support a self-produced album. No matter what medium you're in, it's essential to build a platform before you try to sell a product. For example, author Gretchen Rubin spent three years writing The Happiness Project blog before turning it into a best-selling book.
- Share your business strategy. When you’re asking other people to help foot the bill, you’ll want to create your product as cheaply and efficiently as possible. Spell out the financial details for your backers and ask for only the minimum amount you need to complete the project. (Any extra money raised can be spent on your promotional efforts.) Producing a short video about your project can help bring in donations: Five Iron Frenzy’s clip provides an excellent model. The band raised more than $200,000 to make an album.
- Involve your audience in the process. Fans are more likely to donate — and donors are more likely to recruit their friends — if you connect them to your process every step of the way. Grant-Lee Phillips (pictured), who funded his upcoming album through PledgeMusic, has provided supporters with updates, such as photos from the album’s cover shoot and a video clip from its mastering session.
- Give away great swag. Technically, crowdfunders are making donations, and they’ll have a greater incentive to give if you offer them something in return. On Rhett Miller’s Pledge Music page, for instance, he offers a completed CD to the smallest donors, then doles out prizes, such as VIP passes, an acoustic guitar, and a Fender Custom Shop American Telecaster for his more generous patrons. Be generous with gifts and acknowledgements, too.
Kathryn Hawkins is a business writer for Intuit and is passionate about solving small business problems.