Could Fundraising Platforms be a Solution for Independent Artists?
Author: Gennifer Maria
Independent musicians have always faced an uphill battle when it comes to propelling their careers. During the early stages of an artist’s career, fan bases typically aren’t large enough for an artist to accrue a sustainable income, if any, from typical revenue streams such as streaming, touring, and merchandise sales. All of which are a substantial investment for an artist to pursue to begin with. With most streaming services paying artists between $0.0033 to $0.01 per stream, you’d have to generate substantial streams of at least 100K+ on a song to even make earnings of $1000.
The process of growing a fan base to improve revenue in the long run, is costly in itself. Promotional services and even taking a DIY approach is still a substantial investment of resources for most artists. The news isn’t all bleak however. With the rise in popularity of crowdfunding platforms and more recently, platforms that are dedicated intermediaries between promising independent artists and potential investors, there are avenues to make a career in music more attainable, which we’ll explore below:
There’s an undeniable demand for “community driven” fundraising models for independent musicians. Over the last decade, whilst we’ve simultaneously seen the power of online communities grow via social media, crowdfunding platforms like Kickstarter and Indiegogo have also risen in popularity. Kickstarter alone has helped musicians raise $270M+ (via Kickstarter data), with iconic 90s R&B act, TLC even using the platform to fund the cost of producing their final album. Fans or “backers” are able to help artists fund their projects through a monetary donation, either completely altruistically, or incentivised with a reward such as a signed physical copy of the project being funded. Many crowdfunding campaigns also incorporate a community element, such as in the case of Indiegogo, whose interface allows backers to take part in discussions on the project with others, including the organizers.
More recently, there’s been a rise in investment focused platforms for artists seeking capital to help advance their careers, such as Indify, beatBread, and the soon to be launched BaseNote. In the case of Indify and BeatBread, emerging unsigned artists are discovered and vetted by the platform to predict their potential for success. The platforms serve to help connect artists with suitable investors, often seasoned execs who also serve as advisors, whilst offering funding and advances to put towards their career. All the while, artists retain ownership of their intellectual property. A key differentiator to crowdfunding is that the relationship is designed to be mutually beneficial from a financial perspective between artist and investor. Although still in the beta stage, BaseNote is another promising investment avenue which was founded by three former Snapchat colleagues. It’s built upon the popular crowdfunding model, meaning anyone can invest, including fans. BaseNote tells us that “fans invest directly into the artist’s streaming royalties”, which is designed to incentivize the fans to act as ambassadors and “spread the word about the musicians they support, generating more royalties for both shareholders and artists”. Further information is expected to unveil closer to BaseNote’s official launch.
Looking To The future:
Major labels are without a doubt still providing a crucial network of valuable resources and guidance to their signed artists, however, there will always be artists who prefer to stay independent or have yet to be discovered by a major label. For those artists, increased funding avenues for independents can bring a host of benefits such as creative freedom, resources to invest in making their careers profitable and sustainable, and retaining full ownership of masters. For the music business as a whole, it’ll be interesting to see how current changes will shape the industry long term. For now, it’s too early to tell, but it’s a promising outlook nonetheless.
* This article is authored by: Gennifer Maria *