Fan Funding Part 2

Fan funding through social media and websites like Kickstarter continue to prove successful for many but some artist find that they cannot drive their campaign to meet the need goal to cash in. Levi James of Music Think Tank wrote an excellent article highlighting the top five reasons campaigns fail. He notes that while 56% of campaigns succeed there is the 46% that do not. As one may expect setting one’s expectation to high is on the list, be realistic and set a campaign fundraising goal that is inline with your fan base. These five suggestions apply to any fundraising and are useful for any artist.

If you have found that you just can’t meet your goals other services like gofundme.com allow for the fundraiser to withdraw as the campaign is in progress and are not required to meet the target before the project is financed. Care must be taken with these types of campaigns to ensure that you a capable of delivering on promised rewards for the tiers that are defined.

Other methods of fan funding include offering ‘pay what you want/can’ on albums placed on Bandcamp.com. I am preparing to do this for my back catalog, by offering them in this format for MP3. If a fan would like to contribute they can and I can also sell high lossless files of the same album for those that prefer quality. I feel the key is to have a variable set of options for fans and potential fans. These can be everything from free digital downloads to limited edition vinyl. The ‘pay what you want/can’ model may just surprise you with a value high then you would have sold the album at from a dedicated fan.

A Free Grab for Tech Companies: Internet Radio Fairness Act

          Pandora Radio, according to sources is in need of higher profitability as costs outpace revenue. Instead of raising advertisement costs they have chosen to go after music creators pockets through litigation and political action. The current bill titled Internet Radio Fairness Act wants to set residual royalty payment to below market fair value.  What is the royalty rate right now? Remember that the Digital Millennium Music Act set the value at “fair market value” which is a value that is negotiated between licensing companies (ASCAP, BMI…) and content provider companies (Pandora, Spotify…) currently Pandora pays out 0.0011 cent per play. Even the most popular artist would be pressed to get a living wage just off those revenues.  Do the math 16.4 million plays are required for 18k of revenue. All the while Pandora is market cap is valued at 1.5 billion dollars.  If they are losing profitability due to rising costs of royalty payments is it the fault of the industry or just a bad business model, which never could reach the intended vision of the company. Pandora has further issues losing subscribers to competition like Spotify and their stock has taken a hit with announcement of iTunes Radio.

          Let us take a look at the proposed act before Congress. At the core they are arguing that it is unfair for digital streaming music to pay market rates when other broadcasters either pay zero as with AM/FM radio or below market rate as with satellite or cable radio. It is stated that it is unfair and restrict new technology development and profitability. Well my opinion is that the entire system has a problem. Why should we grant our copyrighted material to be used as a vehicle of profit for a large corporation, while we as owners and creators are not compensated. A fair bill to put forth would be to end the enacted laws that permit broadcasters to obtain below market rates and or free content which in turn they make billions through advertising.

          The following link will help generate a letter to your representatives and provides more information on awareness for fair wages for artists:

http://www.musicfirstcoalition.org