Last post I nerded out big time on Test Presses, and how I thought bands and labels should embrace them as a way to create revenue. Collectors, like me for instance, pay absurd amounts of money for them. Once I had my brother Tom bid $1500+ on a Test Press cause I was on a train and couldn’t access the internet safely. I won it for $500. That shows you how much I wanted it. And I believe there’s someone like that for almost every test press. Someone that’s willing to pay 3 times as much as the next person. You just got to have the guts to charge them for it. Now we’ve reached Part 4, and I’ve finally collected my thoughts on Kickstarter. Got your calculators ready? Ok, let’s begin.
Kickstarter is a platform that enables people to get projects funded easier. The platform is based around a simple structure where fans can commit money to a project, but the creator of the project is not able to access the money unless the goal has been met, and the allotted time to reach that goal has been exceeded. On July 19th they announced on their blog that they reached their 10,000th successfully funded project. That’s a great number, but what really interested me was the amount of money they said changed hands over those 10,000 projects. $60 Million. Yeah, that’s a lot of freaking money. And when I saw that, I thought I should take a more in depth look at this platform, see if the music industry could utilize it, and maybe pose some interesting theories of why Kickstarter is thriving in the online tech industry.
Kickstart An Album
Let’s get right to it. Out of the 10,000 projects Kickstarter has funded, 3110 has been in Music, which is the most in any category. I myself have contributed to a Kickstarter. My buddy Mike, who owns a label called Dead Broke Rekerds, wanted to release Explosivo - If the Devil Had a Guitar on vinyl. This album was recorded in 2000, but never saw the light of day. He decided to give Kickstarter a whirl, and it worked out well…sorta. There was one issue. Time. Since Mike wasn’t sure how many people had an interest in supporting it, he couldn’t really make a move till the project was funded and the cash was released. And if I remember correctly, the project had a 2 month time frame. So people needed to commit money to the project, then wait and wait and wait, until the time was over before the funds were removed. Now don’t get me wrong, the feature of not taking the money till the end of the Kickstarter, is a great feature. But for a small label, I don’t think it’s the correct model. I’ve already stated that a lot of labels are using preorder money to fund projects, not help cash flow, so the idea that they can’t get the money till the end of the Kickstarter is counterintuitive. I think it works yes, but I don’t think it’s an ideal situation. Obviously the best situation for a label will always be to release something they think people will want to buy. If a label isn’t sure, send an email out to everyone and ask, or put a poll up on your site. There are exceptions I think too. If you’re a label that releases a lot of music from your hometown, then I could see it working out a little better. A lot of people know you personally, so their reaction to you using Kickstarter, as a revenue generator, won’t be as harsh. Incidentally, Dead Broke releases a lot of local bands, and my contribution to the Exlosivo project was about 25% of the goal. Tom, my brother and partner, also contributed 25%. Since Explosivo was from Long Island, and we’re all about supporting Long Island bands, it seemed like the right move. I’m not completely positive that the project would have reached it’s goal on Kickstarter if not for Tom and I, but I do think it would have been released by Mike either way.
Kickstart Your Album
How about bands? Does it make sense for them? Well this is where it starts to get interesting. Mostly cause there’s been a lot of research done by some really smart people and news sites. Let’s begin with an article that ran on Digital Music News back on June 8th of this year called The Lessons I Learned from a $10,000 Kickstarter Campaign…. Caren Kelleher, who’s a manager of unsigned bands like True Mad North, and The Lighthouse and the Whaler (I guess her speciality is bands who name themselves after ocean related nouns), wrote about her experience doing a Kickstarter that raised more than $10,000. In this article she points out some really interesting things she’s uncovered. One being the fact that only about 1.3% of online fans contributed to the project. And the second being that about 30% of the contributors to Kickstarter projects didn’t ask for a reward. Meaning people either contributed, just to contribute, or bought the merchandise afterwards. Caren’s reasoning for this is that “superfans simply aren’t that motivated by merch.” Well that made me think a little. One could definitely come to this conclusion. But I have a couple alternate theories. In my above section I pointed out that Tom and I helped fund a project started by my friend Mike. We contributed about half to the project, but didn’t select any merchandise compensation. So if Caren looked at that Kickstarter, she’d say, “See, superfans aren’t motivated by Merch.” And she’s right. Like I said Tom and I wanted to support Long Island, which we did. But we were also compensated outside of the Kickstarter project. We made a deal with Mike to receive a whole bunch of records, and have the Limited Pressing logo on the back of the jacket. Sort of like a split release, but from our perspective it was more like an ad. I’m not saying this happens a lot, it’s just something to think about. My second alternate theory I believe does happen a lot. I think projects get contributions from the people who start them. These contributions wouldn’t be for rewards since they’d be rewarding themselves with their own rewards…yeah I just said that. And If you think about it, you know these people are contributing at some point, so why not do it on Kickstarter? It’ll boost the legitimacy of the project to fans, as well as create buzz within the Kickstarter community. And just to inject a little more logic into the second theory. Usually when someone releases a physical music product, the standard mark up on that product is somewhere in the neighborhood of 20% - 40%. And by that I mean that if someone wanted to use their own money to help fund a project, the logical amount to contribute and still break even is the exact cost you could mark up that item. All things considered though, I think Kickstarter is pretty good for bands. Bands are viewed more like an art project, then a business project. So when people view a band trying to get funded for an album, they’re less likely to think or care about where the profit is going.
So if bands should try and embrace Kickstarter because it could work out well for them, then one would think that the fans appreciate when a band uses it too, right? Well let’s look at a questionnaire my friend Justin August did on Punknews.org. A little background first: Justin has been an advocate of Kickstarter in music for a while now. I’m not sure of his view on labels versus bands, but I know for sure he likes it for bands. Well he wanted to see if others shared in his perspective, so he asked Punknews.org’s readers to answer a few questions. Here’s a couple of the more interesting results.(I boosted these very beautiful pie charts directly from the article)
So in this case readers got a yes or no question. These are tough some times cause most questions are not easy to answer with a “yes” or a “no”. But to be a part of the poll you need to answer it. So you do. And the results look good for bands….I think. 65.2% of people said they’d contribute to a kickstarter project if it were for their favorite band to release a record on vinyl. On the outside that seems great. I mean look at all that blue. But if you really think about it, it’s pretty pitiful. Wouldn’t you donate to your favorite band if they wanted to release their album on vinyl? Well 35% said no. 35%! To put some actually numbers behind that percentage, this means that out of the 752 who answered this question, 262 said no. That’s mind boggling to me. And it sort of goes against Caren’s theory of fans not caring too much about merch. Cause if that were true, almost all 750 would have said yes. The reason is, a lot of the people who don’t care about vinyl, would still say yes cause they don’t need to be rewarded to contribute. Meaning it wouldn’t have anything to do with the type of product the band was looking to get funded. Not only that, but remember we’re talking about someone’s “favorite band”. What could possibly motivate you more than your favorite band? It’s almost like the only people who do care, are the superfans. And if that’s true, I think we need to redefine what a superfan is. Now it seems like anyone who contributes is a superfan. How about another one?
This is a great question. It provides a whole lot of choices, and it still requires some thinking. I would have put this one at the top though. The more difficult questions should be at the top, cause by the time the reader gets to the bottom, they don’t want to think anymore. So what about the results? Well once again on the outside it looks good for bands. That is, until you really think about the results. How about the fact that more people would rather see a band not use Kickstarter, then to use Kickstarter to fund a tour to their city? Remember, the question is not “what would you rather contribute to a kickstarter for”. The question is what would you rather see a band fund with Kickstarter. 120 people said nothing. NOTHING?! How is anyone even choosing this answer? The only conclusion I can come up with is 120 people out of 752, think no band should ever use Kickstarter. Not for a new album. Not for a tour. Not for a new van. Nothing. That’s a terrible result in my opinion. It makes me want to question all the people you hear talking about supporting bands and labels. We need an IRS for music. Internal Records Service. They’ll just go around to everyone’s house and audit the hell out of their iTunes account. Oh wait, we do.
Anyone interested in more of these questions and results should definitely study that post by Justin on Punknews. I have to hand it to the man, he grabbed the ball and ran his ass off with it. Not only is it great information, direct from the independent punk community, but it also created a huge stir in the PN comments sections. I mean it’s no White Crosses review, but hey, what is?
Still Confused? I Hear Ya
10,000 projects funded for a total changed hands cash amount of 60 Million dollars. And the category with the most funded projects is Music. What does this tell us? It tells us that we need to decipher some more cryptic information. Here’s a graph I pulled from Kickstarter’s blog post I mentioned earlier.
This shows that more than half the projects funded are in the $1000-$5000 range. Which in my mind, is the area where a lot of small market independent music projects would land. We don’t know the true breakdown of these numbers, but if we took the average of 1k-5k, which is $3000, and multiplied that by 5321, we get about $16 million, which is approximately 26.5%. So more than half the funded projects, only generated about a quarter of the cash. Let’s compare those numbers to the $5000-$10,000 range. This range has 2123 projects in it. Well once again we don’t know the breakdown, but the average is $7500. Multiply that by the amount of projects and what do we get? About 16 million. Less than half the amount of projects in 1k-5k, but the same amount of cash. And finally what about $25,000-$100,000? This range had a measly 259 projects. How much could this range generate? The average fund amount would be $62,500, multiply that by 259 and what do you get? You guessed it, 16 Million. Are you as confused as I was when I first figured this out? Probably. But I think I can shed some light on it for you. The light comes in through the Top 100 most funded projects window. Only 5 of these are for music. That’s right only 5. Music has the most projects, but they don’t transfer the most funds. So what does generate the most money? Film and Video. And not by a little either. They have the second most funded projects with 3048, but unlike Music’s Top 100 showing of 5, Film and Video has a staggering 35 of them! So wait….huh? Yes, 35 of the Top 100 most funded projects on Kickstarter are in Film and Video. And if we add in the fact that they basically fund the same amount of projects as Music, AND we assume that most of the music projects are in the most common Amounts Raised range of $1000-$5000, then one can only come to the conclusion that Kickstarter is a Film and Video project funding site. Need a little more proof? Well can you upload music to a project? Sure, but only by video! And how about the obvious fact that if most of the money changes hands through Film and Video projects, then Kickstarter makes most of it’s money through Film and Video projects? Kickstarter is really, Filmstarter.
After processing this information it started to make a lot of sense. Bands usually seek out labels and try and get them to release their music. That’s the typical model. If there’s money to be made through an album, there’s always going to be a label looking to help a band reach it’s fans. Video works differently. There are a million more labels, then movie production companies. The reason is, making a movie costs a lot of damn money. Not only that, but the bridge from production to customer is completely different. Most movie money is made in the theaters. Most music money is made online. It’s a lot easier for someone to own a label and make it break even or be profitable. It can also be a one man operation, like my buddy Mike. Film and Video usually can’t because most of the art of film is in the act of filming and editing, which not only takes artistic skill but physical skill. With a label it’s a mental skill. The physical skill is provided by the band and the studio. Meaning a band, studio, and label can easily exist on separate planes. The process of filming can’t. There’s also no direct-to-fan preordering in film, like there is in music. So it’s no wonder the Film and Video world immediately latched onto Kickstarter.
It’s nitty gritty time people. Kickstarter is a place for Artists to get their projects funded. That’s what I believe. Labels are not Artists, but bands are. So bands should try it, but like the above information proves, the average fan may not take to it. Maybe cause it’s still new or maybe cause of the environment that the idea is located. Meaning what if this feature was available in a store platform? Then it wouldn’t have that donation type feel to it. I’m not sure if it would be a total smash hit like Kickstarter is, but I don’t think it matters either, cause it’s not coming to a store platform anytime soon. Reason being is Amazon is the only payment service that currently makes this possible. Which means a platform, like for instance Limited Pressing, would need to add another payment gateway just for a feature that most people probably wouldn’t use.
So that’s it, I just can’t do anymore. I think I covered a lot of cool and interesting facts, opinions and theories about Kickstarter. Incredible service based around a simple idea. I’m not sure what’s next for me in my Vinyl Bailout series. I think I might tackle pressing amounts. One thing of note before you go, I added an email option in the sidebar. If you don’t have Tumblr, an RSS feed reader, or twitter, you could just drop your address in there and I’ll email you my posts. In fact, I’ll email them out before they even get posted! Easy there dude, you’re drooling.