MMF Crowdfunding Comparison
May 28, 2014
One of our goals at Music Managers Forum-US is to educate and disseminate information regarding areas of interest to managers. Below is an MMF-US exclusive: a short Q&A with representatives from leading music crowd funding services/platforms. These answers furnished to MMF-US for the Q&A are posted exactly as provided from each of the responders. Because music managers may advise their clients to utilize alternatives for funding creative projects outside of the major/indie label system, MMF-US hopes to help popularize some of the options through the dissemination of this first-hand information.
1. Please identify three (3) advantages that the PledgeMusic offers over other crowd funding platforms that music managers would want to know.
One of the big advantages of the platform is our longer campaigns that can run as either a targeted or goal-oriented campaign or as a pre-sale. Instead of the 30 or 60-day campaigns you’ll often find with crowd funding, PledgeMusic campaigns usually last between 3 and 6 months, giving a project enough time to gain momentum and fans enough time to take part in the whole life and story of a new release.
Second, PledgeMusic campaigns continue even after they hit 100 percent of their initial goals. We’ve seen artists surpass 300, 400 and even 500 percent of their targets as fans continue to get involved. In an age when people are hesitant to spend money on CDs - even downloads - the average spend per fan in the US on PledgeMusic is $61 - the price of 3 or 4 albums, and that’s just on one campaign. We also find many fans becoming serial pledgers as they discover new artists through the site. For this reason, a large percentage of our artists are profitable before they’ve even finished tracking an album. Plus, all those sales are chart eligible and count toward week one album sales, leading to a higher week one chart position.
And third, PledgeMusic is not a static platform. We bring a team of experienced industry professionals to the table. Rather than launching a campaign online and hoping for the best, our artists work one-on-one with members of our talented team to set up the campaign, choose the right goal, create a tailored marketing plan and see the project through to the end. Artists can make changes and updates to their campaigns whenever they choose.
PledgeMusic is specifically designed for artists, managers and labels who want to engage fans while seeing a project to fruition. For artists who catch that vision and see the value of inviting fans into a journey rather than simply asking for money, PledgeMusic has a lot to offer that traditional crowd funding sites overlook. It’s a different approach, and our direct-to-fan model has actually proven itself to be statistically more successful than crowd funding. Going either the direct-to-consumer or crowd funding route will simply be leaving money on the table.
2. Why should music managers advise their music artists to use PledgeMusic to fund their projects over choosing to sign with a record company?
The good news is that they don’t have to. We are extremely third party friendly, so we commonly work with managers and labels alike on new campaigns. We offer two different types of projects: private target-based campaigns and pre-order campaigns. Often, when an artist is signed to a record label, he or she will run a pre-order campaign with us to help build the excitement around a release, have more album sales to count toward their week-one sales for charting purposes, and build relationships with their fans.
For those artists who don’t have a label backing them or helping pay for a new project, target-based campaigns are a way to invite fans to essentially be the label. With either kind of campaign, PledgeMusic has a 91 percent success rate for our managed campaigns to date. Fans want to be involved in the creation of a record, and our platform allows them to do just that while supporting their favorite artists.
3. Ideally, what type of music artists have you found to most benefit by using the PledgeMusic platform to get the most out of their campaigns? (can name some examples of successful campaigns?)
The short answer is this: those who want to engage their fans. Factors like genre, age or popularity don’t determine the success of a campaign as much as this key element does. Of course an artist has to have a fan base to begin with, but as long as that’s present in some shape or size, the true predictor of success is usually whether or not an artist actually wants to interact with fans and invite them into a process that has long taken place behind closed studio doors.
From Ben Folds Five (Sony Legacy) hitting 368% of their goal and landing in Billboard’s Top 10 to Bring Me The Horizon (RCA) getting their highest career chart position at No. 3 after a successful campaign to 311 (INGrooves) entering the Billboard charts at No. 6 on the heels of their campaign, we’ve seen artists of all kinds using PledgeMusic to hit and exceed their goals. More independent success stories include names like Firehorse, who surpassed 170 percent in two different campaigns and Matthew Mayfield with three successful campaigns for different projects.
4. What strategies should music managers and their music artists practice in order to mitigate risk in realizing a successful PledgeMusic campaign that meets the goal?
I keep coming back to this, but the biggest strategy is encouraging the artist to stay fully engaged. This means posting frequent and interesting updates to the updates section, offering exclusives that involve interactions with the artist and just keeping fans up to speed and excited about what’s going on. Artists who hit “launch” on campaigns and then leave them alone, hoping for the best, rarely do well.
In addition to this, we highly recommend using our widgets, which allow artists to capture data from fans (like an email address) in exchange for a free track or an exclusive offering. While it may feel risky to some to run a campaign like this, the truth is that by doing so you’re automatically mitigating the higher risk of releasing an album to the public blindly and then waiting to see how it does. PledgeMusic artists get to see the momentum build throughout the entire process, all while pre-orders are coming in, so the release day becomes an exciting part of the story rather than an uncertain shot in the dark.
Note: Question 5 did not receive a response.
1. Please identify three (3) advantages that Indiegogo offers over other crowd funding platforms that music managers would want to know.
Indiegogo offers flexible funding in addition to fixed funding. Fixed funding is the all-or-nothing model. In the event that you don’t hit your goal, you don’t get your money- no harm, no foul. Flexible funding allows the artist to keep what they’ve raised, regardless of whether or not they reached their funding target.
Another key differentiator is our superior customer service we offer to anyone running a campaign on indiegogo. we have campaign specialists that will work with artists and their managers to make sure that they are set for success when running a campaign
Keep your data. Indiegogo offers in depth analytics on your campaign that help campaign owners recognize who their fans are, where they’re from, what they’re interested in, in addition to their email and mailing addresses.
2. Why should music managers advise their music artists to use Indiegogo to fund their projects over choosing to sign with a record company?
I don’t think it’s an “indiegogo over record labels” thing anymore. if an artist is able to monetize their fan base by engaging them through a campaign on Indiegogo, they may not need an advance to get the album produced, but i think labels still offer great services (distribution, promotion, etc) we are already seeing artists sign deals after running a campaign on Indiegogo (i.e. protest the hero). the benefit of running the campaign before signing is that you come to the labels with a market-validated product that you own outright. the artist maintains creative control and have a little more bargaining power when it comes to signing.
3. Ideally, what type of music artists have you found to most benefit by using the Indiegogo platform to get the most out of their campaigns? (can name some examples of successful campaigns?)
Any artist who is able to engage their fan base through the campaign. We’re seeing a lot of success in the alternative/rock scene right now, because these bands are not afraid to get their hands dirty. The campaigns that do the best are the ones that offer great experience based perks, in addition to the physical goods. Fans follow their favorite artists on twitter and instagram because they want that all inclusive experience. The same way fans want to know which Karaoke bar Drake goes to when he’s in NYC, or what Beyonce’s wearing to Coachella- Fans want to be involved with the creative process of making a record. Protest the Hero, Macklemore & Ryan Lewis, We The Kings and Our Last Night are all great examples of artists who brought great offerings to the campaign and have seen success because of it.
4. What strategies should music managers and their music artists practice in order to mitigate risk in realizing a successful Indiegogo campaign that meets the goal?
Set a realistic target, be active on the campaign by offering new perks, posting updates and engaging with their fans both before, during and after the campaign. be transparent- where’s the money going? and listen to your campaign specialist- they’re here to help you raise the most amount of money and awareness that you possibly can.
5. In five years from now, where do you see Indiegogo and their place amongst crowd funding services and possible innovations for the platform?
I’m looking forward to working with more labels, partners and artists to continue pushing the industry forward. I think that as the industry continues to grow and evolve we will do the same. In the music space, I hope we can help repair a broken model and bring the power back to the artists and the fans. We’ll continue to provide superior customer service, in addition to improving the user’s experience by offering more detailed analytics, fulfillment tools and other awesome things that probably haven’t been thought of yet. It’s so cool to see the democratization of fundraising and the effects that it’s having on all spaces, especially the music industry. The next five years are shaping up to be crazy.
1. Please identify three (3) advantages that Kickstarter offers over other crowd funding platforms that music managers would want to know.
More than six million people from nearly every country on the planet have turned to Kickstarter to voice the kind of culture they want to exist. Collectively, they’ve pledged more than $1.1 billion dollars to projects in the last five years, bringing more than 60,000 ideas to life. More than 16,000 of those have been from the world of music — everything from Grammy-winning albums to concerts, music videos, and international tours.
Kickstarter is a team of 85 people who are experienced at making new things from across the creative universe. Musicians, artists, filmmakers, hardware designers, comic artists, photographers all work at Kickstarter. Many of us have launched our own projects. We take pride in what we do and provide great service and feedback to everyone who launches a project on the site.
Kickstarter is the name people know and trust. We have a growing community of 1.85 million returning backers who come back to Kickstarter regularly to be inspired by ideas and throw their support behind them. When it comes to this new way of bringing creative projects to life, all eyes are on Kickstarter — see this chartillustrating the interest in the Kickstarter community:
2. Why should music managers advise their music artists to use Kickstarter to fund their projects over choosing to sign with a record company?
Kickstarter’s a community of millions of people shaping the world into what they want it to be — bringing an idea to life with the support of that community can be an incredibly rewarding experience. More than money, Kickstarter is about developing closer connections between artists and audiences and creative independence. When you launch a project on Kickstarter you enjoy 100% creative control and ownership of your work. When musicians create on their own terms, work that is truer to their vision gets a chance to exist. That's a great thing for musicians, for audiences, and for culture.
3. Ideally, what type of music artists have you found to most benefit by using the Kickstarter platform to get the most out of their campaigns? (can name some examples of successful campaigns?)
Kickstarter is for everyone. It’s an incredibly flexible tool for musicians of all stripes, exploring all genres, and looking to create all work in all formats. Anyone who wants to create on their own terms and have the chance to connect directly with their fans could enjoy the experience. Here are just a few examples of great projects:
4. What strategies should music managers and their music artists practice in order to mitigate risk in realizing a successful Kickstarter campaign that meets the goal?
Musicians on Kickstarter can experiment and take risks because they know they only have to move forward with what they set out to create if they have the budget they scoped out to do so. Kickstarter's all-or-nothing model works — 80% of projects that raised more than 20% of their goal were successfully funded. For people backing projects they know that if they put their money to a project on Kickstarter, the creator always has the budget they scoped out for the project and therefore a better chance of bringing it to life. Projects are at their best when creators keep backers in the loop and we encourage transparency along the way.
One thing an aspiring creator should consider before launching a project is explore Kickstarter, find a project they’re inspired by, and back it. Get a sense of the whole experience from beginning to end.
5. In five years from now, where do you see Kickstarter and their place amongst crowd funding services and possible innovations for the platform?
Our mission is to help people bring creative projects to life. Every day we spend our time talking directly with creators to learn from them how we can improve how we go about serving that mission. And that’s something we’re focused on for the long-term. We’re proud to have inspired an entirely new way of bringing projects to life. We feel a strong responsibility to our community to make sure they have all the support they need throughout that process. And this is something we're committed to for much longer than the next five years.
Special thanks for contributions by:
Compiler/editor Jack Bookbinder, Justin Kazmark, Corey Scholibo, Karen Blair, David Hackett and Benji Rogers.
