Crowdfunding For Musicians, The Ultimate Guide Part 1
One of the questions I get asked most, is how musicians can get people to fund their music. My instant reply is usually to get a day job and earn the money yourself, as being a new musician that's often the most reliable way to go about doing things. That said, there is another way:
Last week I attended one of the Darker Music Talks events in London. Here Tommy Darker had one of the IndieGoGo team (IndieGoGo being a crowdfunding website) talking about crowdfunding, what it is, how it can help music makers, and how to get the edge when starting a funding campaign.
I've known about crowdfunding for a while, but have never personally run a campaign before (although that might soon change). So I've decided to use the information I've learned from the experts and share it with you all today. I hope you find it as valuable as I have, and that it helps you to successfully get your music funded if you pursue this route. If you already have experience in this area, feel free to share it in the comments section.
P.S. Part 2 of this crowdfunding for musicians series is out now (opens in a new window)! After you've read this, have a look.
But first, if it's your aim to do music professionally, you'll want to check out our free ebook while it's still available:
Free eBook: Discover how real independent musicians like you are making $4,077 - $22,573+ monthly via Youtube, let me know where to send the details:
What Is Crowdfunding?
For those who haven't heard of this concept before, crowdfunding is the process of getting a project of yours funded by the ‘crowd'. Anyone can be involved in contributing money to your project, it doesn't have to be record labels or companies. It could be your fans, family members, friends, people who find you on crowdfunding websites, and anyone else who likes the idea of what you're doing and wants to help you complete your stated project.
You tell people which music related project you need money for, and how much funding you need to achieve your goals.
In exchange for people contributing financially to make your project succeed, you offer different incentives to people depending on how much money they give. I'll look more about what these incentives you should be offering are later.
Crowdfunding is done through one of the numerous crowdfunding websites that are available. They provide the platform, and you provide the campaign. Through these websites people will be able to see what you're raising money for (once you put the details up), and contribute if it's something they're interested in. At the end of the campaign, if it's completed successfully, you get the money.
All of the crowdfunding sites work differently depending on which one it is, but that's generally how things work.
What Can Musicians Raise Money For?
So now you know it's possible to raise money from people to get you doing more in your music career. But what should you be raising money for exactly? Here are some ideas:
Let's say you want to record a new album or EP, but haven't got the money to get it made. This is something you could crowdfund for. If people want to hear new material from you but you haven't got the money to get it made, if people want that music bad enough (and have the funds themselves), they will contribute and help you put that project together.
A New Music Video
Fed up of making lower quality net videos? Need a bigger budget to put out a video that will get you noticed on a much wider scale? Then you can start a campaign to get that video director you really like.
Touring can be expensive. There's fuel you have to pay for, places to sleep, food, potentially hired help and more. While some tours can be self sustaining and make back the money along the way, not all tours will do so. Sometimes it's simply about raising awareness.
If you're not sure how profitable your tour will be but you want to give it a try, why not ask people to sponsor you to go on it? You can tell them you're touring in their area, and they can pre-buy attendance.
Anything Else Related
You aren't limited to raising money for just the above; you can literally do it for anything music related! Need new equipment to make your music? Need better artwork designed for your brand? Need to be able to distribute your new single? As long as it's something your fans and the crowd want, you can try and make it work.
What Are The Benefits Of Getting Your Music Crowdfunded?
This question might seem obvious, but hear me out. As well as the clear benefit of gaining money from people who want to support what you do, there is another benefit of crowdfunding that many often overlook:
The ability to build connections with fans!
Crowdfunding sites often allow you to see the name and email addresses of people who have funded your campaign, meaning you can contact them and communicate with them in future.
Now while you won't want to abuse this, this is a very big deal. The email address of one person who is proven to spend money on your music is worth a lot more than 5 or 10 email addresses of people who have never bought your music before. You know they're willing to part with money if the right opportunity is there, so you can create new opportunities in future (either a album, merch, or another crowdfunding campaign) and let them know about it. A percentage will part with their money again.
Building up this list of proven spenders is a big hidden benefit to running a campaign, so focus on the relationship building side of things as well as the instant cash. We look more in our more detailed guide to music crowdfunding.
How Long Do Crowdfunding Campaigns Run For?
So how long do you need to have your campaign up for to make money from this? Well while you can choose yourself, a lot of people tend to go for around the 30 – 40 days mark. This is so they have enough time to fully get the message about it out there, and so it gives everyone who's willing to get involved time to get together and give cash.
During this time, ongoing promotion is needed on your part. The more you get your good idea out there, the better your chances of hitting your income goal will become. Be sure to set a lot of promotional material up before your campaign start date even comes around, so you don't get too overwhelmed when everything is up and running.
Why Would Fans And Other People Fund Your Music?
Now I know what some of you are thinking; why would people, sometimes random ones who have never heard your music before, be willing to fund something in your music career? Good question, and one with a much better answer…
What you have to remember is that these people aren't giving you money for nothing. Crowdfunding is an exchange process; they give you money, and you give them what they've paid for in return (your listed incentive, such as seeing you live, or an advanced preview of the new album etc).
The incentives aren't the only reason people will sponsor you though. Often people want to feel like they are part of something, and get enjoyment from helping make something become a reality. The incentive of being able to say “I made that album possible with my contribution” is a strong incentive in itself, and one that motivates previously random people to get involved and part with their money.
Make people feel like they're part of something important, and the amount of backers you get will increase.
Who Gives You Money When You Crowdfund?
Ok, so we know that crowdfunding calls to people to contribute financially to your project. But who exactly will it be who gives you money? Here are the three main groups:
These people are your existing fanbase. You may already have them in your fanbase before you start your first funding campaign, or you may pick them up while your campaign is in progress. Either way, they know about your music, and would consider themselves a fan.
It's important to note that not all of your fans will contribute financially to your campaign. Some may not do so because they don't have the money, while others may not have a strong enough connection with you to want to part money yet. Others simply won't spend on music related things full stop.
If you have a fanbase of say 1000, don't expect all of them to contribute. Reach out to all of them, but only a % will part with money. The percentage you achieve will depend on how willing to spend on your music these fans are, how valuable what you're trying to achieve seems to them, how well you promote your campaign and more.
Family And Friends
While not all people who run campaigns think about this, family and friends can play a vital part in helping you reach the target aims of your campaign. While crowdfunding sites can help get your project in front of people who are willing to part with their money, these sites only have limited space for exposure. Because of this, they usually only showcase projects that are gaining traction on their own first.
So because you need to draw on your own network at the early stages to be successful, family and friends can help build up this traction. This could be in the form of them donating themselves (either because they like your music or because they want to see you become successful), them sharing your message, and them generally helping in any way they can. The IndieGoGo team suggest you aim to raise around 20 – 30% of your money from this group to stand the best chance of success.
Don't by afraid to use any advantage you have to make your campaign work, and the people closest to you are a big advantage.
Random Browsers Of Crowdfunding Websites
The final group of people who will be willing to contribute to your project (if it's worthy enough) is the people who routinely visit crowdfunding sites. There are those who like funding projects such as yours, and browse the music categories to see if they can find any new acts who they can invest in.
As I mentioned above, you need to show your campaign is worth talking about if you want these sites to showcase you to their valuable visitors. This can be in the form of you updating your page regularly, getting a lot of contributions near the beginning and the like. The more active your page and campaign is, the more likely it'll get picked up and showcased to a all new audience.
Update: A Note About Crowdfunding In Denmark
Jakob Green emailed me in after seeing this guide and had some useful information about crowdfunding in Denmark:
A little note to your articles on Crowdfunding.
One thing we have plenty of here in Denmark are Taxes, and it's important to realize that there might be taxes that need to be paid on your crowdfunding project – which in turn might upset the entire calculation.
Here in Denmark taxes are very high (46% income tax, 25% sales tax), and depending on what and how you crowdfund, you might find yourself in a world of financial hurt as you're seen as a self-employed 1 man business – and taxed accordingly. This also means that musicians that want to crowdfund their album might have a loss of unemployment insurance and other benefits because they're all of a sudden running a business in the eyes of the tax authorities.
So before even thinking about running a crowdfunding campaign in Denmark, you should call upon one of the unions to guide you (Artisten or Dansk Musikerforbund) to make sure you don't mess up.
Part 2 of this guide is out now! So have a look.
So there you have it, part one of our two part guide about crowdfunding. Hopefully the above will have you feeling more knowledgeable about the subject, and even motivated to get your own campaign going. I'll have the next part of the guide up for you by this Wednesday.
In the mean time, have you done any crowdfunding? If so I'd love to hear your experiences with it in the comments. 🙂
P.S. Remember though, none of what you've learned will matter if you don't know how to get your music out there and earn from it. Want to learn how to do that? Then get our free ‘5 Steps To Profitable Youtube Music Career' ebook emailed directly to you!
I’ve used Kickstarter a couple of times. It can be difficult to raise the money if you are an up and coming band, so input, rewards and updates must be often. Band I am currently working with set a 30 day- $28,000 goal and hit that goal the second day. They are currently at the $47,000+ mark and the continued relationship with fans is continuing to increase.
Great example Tracy, and well done for hitting your target so quick! Once again, this just goes to show it works. 🙂
With all due respect, is this not the same as charity or panhandling?
Hi Bdubya, no it’s not. It’s more an exchange process. They don’t give you money for nothing, they pay for the incentives you offer them. If you don’t offer them anything, they won’t give you money. Have a read and you’ll see all the details. 🙂
I’ve already run successful campaign for my band Hammerforce: http://igg.me/at/hammerforce
I would like to share some experience.
First of all my goal was really small for my project. I’ve just chosen minimum amount needed to press CDs and other bonuses. I promoted campaign almost every day during a month and put lots of effort in it. After finishing I’ve sworn that I never will run another campaign with such small goal, because to be honest I could get that money from my main job with less efforts and save some time for music. But considering that I’ve hit the goal only in the last day of campaign, my goal was fair and it was exactly amount of money that I really could get at that time.
Now about positive things:
1) I fully agree that crowdfunding really helps to build relationships with buying fans. And they tend to actively support and promote my band after campaign as well. So it is definitely another opportunity to get more support and not only money.
2) When I was analyzing my band’s earnings for the whole 2013, it turned up that 42% of earnings came from that campaign! (Yeah I know, we earn very few for the band, but we don’t play live, just sell music and merch and that’s it). Bandcamp sales were 39%. CDBaby (including iTunes, Amazon and others) – only 12%. So you can see that crowdfunding forms a good part of earnings.
I am going to run new campaign to fund our new album. Goal will be higher of course and running time will be longer. I think that crowdfunding is great way for independent bands.
Thanks for sharing Nikita. Congrats on your successful campaign, you made a few really good points! Like you said you went for what you needed at the time, it’s good to not be too greedy if you haven’t got the fanbase to get more. That said (again like you said), it can be hard work. So if the fanbase is there, then aim for the bigger goals.
When 42% of your earnings came from that crowdfunding campaign, it just shows what a great option it is for musicians. I look forward to seeing what you do with your new campaign, and the great thing is you can now also call on those people who funded you last time and some will likely fund again. 🙂
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