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How music crowdfunding works

Crowdfunding in the music industry is becoming increasingly popular. Music artists are turning to their fans to contribute towards an album’s release, or securing the services of a radio plugger or PR.

Selling one-off products and experiences to fans is common practice. Playing live in a fan’s living room, writing a bespoke song or selling an appearance on your next album are now all potentially valuable revenue-raisers, and are seen as successful crowdfunding music campaigns.

Music crowdfunding platforms such as Kickstarter formalise the fan-funding process. Fans are asked to contribute to the project through the artist or band's website and social media presence. Musicians retain their rights and the website charges a commission once the agreed target has been raised.

As fan funding is usually managed through social networks, musicians should aim to build their fanbase online.

It’s important that music crowdfunding platforms keep money due to artists from fans in an escrow account. You can check UK Crowdfunding Association (UKCFA) which has a code of practice for crowd-funding services.

How to use crowdfunding to release your music

Artists set a campaign goal (maybe, the amount of money that they need to record and manufacture the album) and then encourage their fans to pre-order the album. If enough fans do so, the project reaches its target and the artist records, manufactures and distributes the album within the pre-determined time frame. If the goal is not reached, artists are not required to produce the album.

Music crowdfunding platforms are also used by artists who have already financed an album, but want to utilise the goal-setting and marketing tools in order to maximise support from fans.

QRATES.com is a crowdfunding platform specifically for musicians who are not signed to a label and who want to press vinyl records.

MU members can seek the advice of their Regional Office in relation to crowdfunding agreements.

If you’re considering releasing an album via a crowdfunding platform, it’s worth considering the following:

Research the best crowdfunding sites for music

Research the best site for your music. Talk to other artists that have released albums via crowdfunding and take a look at the different sites to see some of the successful crowdfunding music campaigns.

Estimate how much support you might need

How much music crowdfunding support do you think you’ll need? Whilst one site may offer a project manager who can help you to build your profile, price your items and plan social media activity for your campaign - others may not offer anything by way of a personal or bespoke service.

If you find the process daunting or administratively challenging, choose a platform with a good support service.

Rates of commission

Rates of commission vary greatly, as do the timescales for payments to artists. Weigh up the rate of commission against the service provided. Plus, take the time to understand how and when you will be paid – it’s often the case that some of the money is only paid once you have fulfilled all your orders.

Finding the right time

Give yourself plenty of time to launch the campaign and subsequently record and manufacture the album (if you haven’t already done so), so you can fulfil the orders. Most artists allow their campaigns to run for two to three months at a time.

What can you sell in addition to your album?

Music crowdfunding platforms encourage artists to sell a range of merchandise in order to attract as many pledges and purchases as possible. Artists often take the opportunity to sell their back-catalogue as well as artwork, handwritten lyric sheets, private gigs and the opportunity to be mentioned within the album’s credits.

It’s important to remember that you will most likely pay a commission on all items sold, whereas you might already sell some of these items, without paying commission, within your own websites/online stores.

Spreading the word

In order to meet your target, you will need to generate enough traffic to your campaign page. Most sites encourage you to sync your social media platforms so that automatic updates can be posted across your pages. However, be sure to use other means of communication such as emails to your database.

As most campaigns run for two or three months, you will need to tell your fans several times about your campaign. An initial announcement will generally result in the most sales in a short period of time but telling fans around the end of the month (when a lot of people get paid) is an effective time to share your news.

You may also find that your fanbase like to pledge/purchase when your campaign is just about to reach a landmark figure – fans like to feel responsible for helping artists reach a milestone.

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