Crowd Funding and the Art of the Album Pre-Sale
Recently, I found myself in a situation most indie artists are probably familiar with. I was going to record an album and had no idea how I was going to pay for it.
Despite the fact that recording has become a much more affordable medium over the past decade, it still costs a considerable amount to produce a quality recording. Even if you borrow, beg, or steal in order to secure free recording time, there’s still the mixing, mastering, and manufacturing costs.
There’s been a lot written recently about “crowd funding,” a term born of another internet buzz word “crowd sourcing.” Crowd funding is as simple as it sounds. It simply means to fund a project by gaining small donations from a large group of people.
Sites like Sellaband.com, Slicethepie.com and Kickstarter.com have emerged as the social networking conduits between an artist and their potential micro-investors. Artists create profiles and spec out the money needed to accomplish their goals, and site members are invited contribute a few bucks if the project seems worth while.
In a nut shell, artists are beginning to look at their potential fans as potential patrons. While most musicians go into debt in the studio with the vague hope that their fans will dig them out after the album is finished, these sites promise the possibility of raising capital up front. What a concept, right?
Why not ask your friends and fans to contribute to the effort? You’d be surprised how empowered people feel when they are invited to support a project, artist, or friend they believe in. They’ll often give well beyond what you ask them for.
Now, while these new crowd funding sites are great (and I encourage folks to try them out). I wondered if I could do it myself on my own site. I set a modest budget for the recording of 2000 dollars. We would borrow the gear and microphones. We’d use Pro-Tools on my computer. But rather than just ask for donations, I figured why not sell the album? I could use PayPal to take orders before copies even exist.
Granted this isn’t a brand new idea. People buy concert tickets months before an event. People pre-order books on Amazon before the book has been released. We all buy dinner before it’s been cooked.
Why not pre-sell your album to the people who would benefit the most from its completion? Don’t be afraid to hit up your aunts, uncles, parents, and neighbors.
Not-so-surprisingly, this method has been successful so-far (and this from a band that hasn’t released an album in 10 years). People who have bought the album tell me they’re excited for its completion. They’re literally invested in it.
Buying an album before it’s been recorded does pose a slight risk to the buyer. What if it never gets finished? Or what if it’s a bad album? But if the album is priced reasonably, the worse case scenario is they’ll be out some pocket change.
One of the unintended benefits of this selling method is the introduction of scarcity into a market where digital technology has made this concept nearly obsolete. The monetary value of music has lessened due to how easily it is acquired, copied, and shared. But you can’t copy or share an unfinished album. An unfinished album, if not properly supported, will never exist. If your fans felt that buying your album was essential for it to come into being–don’t you think they would pay more?
I’d be curious if other have had success in crowd funding and or pre-sales. Leave your story’s and thoughts in the comments section below.
If you’re interested in following Chris’ fund raising efforts for his band Nervous and the kid, you can visit his website here.
Friday, 26 March, 2010 at 16:35
I funded my last album this way. Last year I raised $2300 from fans, family and friends to make a numbered, limited edition of 500 CDs.
I asked everybody I know to contribute at least $20, towards the mastering and manufacture of the CD. (I’d already recorded and mixed it in studios and at home). For each $10 above $20 that someone donated, they would receive another CD at the end. $20 got you 2 CDs, $30 got you 3 CDs, and so forth. This way, the “investors” would have incentive to pass on their extra discs to people I don’t know. I figured this was a way to stimulate word-of-mouth. Each contributor was personally thanked in the liner notes.
I tried to do it again later for a vinyl version of the album, but had little luck. I quickly found that most people wouldn’t contribute to the same project twice. Silly me!
Friday, 26 March, 2010 at 19:34
That’s cool Levi and very clever. I wonder if the vinyl might of been harder because less people have record players and maybe also because they already had the album. *wink*
Chris
Saturday, 27 March, 2010 at 12:13
Yes and yes. I should have just gone with my original idea and pressed vinyl with bulk CDs. But I think it would have been harder to fund the whole thing.
Unfortunately, most of my friends are not avid vinyl collectors like I am.
Thursday, 1 April, 2010 at 11:39
I have funded my last 9 album releases with co-op marketing strategies and it still works. A very low budget album will cost you under 5K to include mastering and packaging. You can get deals with manufacturing companies such as Disc Makers for a thousand copies of your product for a thousand dollars. If you order less it will cost you more. It is a messed up concept to me but the absolute truth. And essentially it will cost you about a $1 per cd. I have managed to get local business owners to invest in my albums with there logo and website information on the back of the cd. That way they get their name and there product logo on all your albums. Essentially you are the vehicle for helping to market their product! It works, I am living proof. I always leave at least 200 pieces for radio and print publications and other essential viral marketing purposes. I have not gone to the fans and asked them for the money for a pre-album sale. Although it’s like a good idea., it seems like a hell of alot of work for $10 donations when you need 3 to 4 thousand dollars to complete an entire low budget album project.
Friday, 2 April, 2010 at 15:47
I’d certainly like to see this becoming a scaleable model, if only because it’s one of the few things suggested that might actually work.
I feel quite strongly that marketing such efforts as pre-sales is the only sensible way to do it. When Sellaband flopped earlier this year, I wrote a brief speculation as to why this happened (confirmed to some extent by later declarations from the interested parties). One of the problems I saw when I was active on the site was that investors were buying into albums with the view of making a profit. This did not happen and it put a damper on further investment. Pre-sales are simply a declaration that the investing fan will get a copy of the album – something that should be within your control.
I’ve got three pieces of advice with regards to fan-funding:
1. Work within your means – set the financial goal at something your fan base can reasonably come up with; be conservative especially when trying this for the first time
2. Be mindful of time – you need to raise the money and get working quickly; there’s nothing worse than keeping the people who have already contributed waiting forever
3. Be prepared to dig into your own pocket – if you’re still short of your goal and no new financing seems forthcoming, either work with less or make up the difference with your own cash. Once you commit to such a scheme and get some initial interest, the album must come out. Trying and failing will probably mean a loss of trust that might make a future attempt impossible. Conversely, if you try and succeed, your fans will probably have fewer reservations about committing to future projects.
P.S.
Two ways that may help you increase demand:
1. Make and post demos of at least some of the forthcoming material – give your fans a taste of what they’ll get.
2. Once the project is underway (that is: you’re recording), keep your fans informed of progress – this will put those who paid at ease and might even encourage more buyers. Needless to say, you should keep the lines open right up to the moment of release (regardless of whether your original budget was exceeded) – you can always use some extra cash for better mastering or some slick packaging, maybe even promotion.
Wednesday, 7 April, 2010 at 20:44
IndieGoGo seems to be a good place to be funding projects. Has anyone used that?
Thursday, 8 April, 2010 at 12:40
I’ve been doing this since 1992. We’ve released six cds this way, working on number 7 now. We call it “Adopt-A-Song” people get their name in the liner notes, in different categories for different sizes of donations, around a theme related to the lyrics. For our cd “Evolve” $50 got you listed as a “Lightning Flash” – $300 got you listed as “Cosmic Ooze” and alos listed as an Adoptive Co-parent of the song of your choice.
As a contributo, you can access a password protected web page and we post our progress as we go – from demo, through basic tracks all the way to final mastered product.
Over the years people have donated $70,000 to us this way. Our average budget is about $1000 a song, plus mastering and pressing.
We sell advance copies for $25 – you get ‘em signed and mailed to you before anyone else gets a copy.
The current project has been REALLY slow in the funding – a bunch of our $1000 contributors lost their shirts in the crash, and many have lost jobs. We’re halfway through, and the money is kind of trickling in.
Thursday, 8 April, 2010 at 18:16
Hey Chris: I have done this before and it works quite well. I did this with snail mail before facebook or other social networking devices were available.
What I did was the album cover first to reassure my fans that there was a legitimate project in the works.
Then I did a postcard mailing to all of my fans and offered them a signed numbered copy for pre- buying a copy of my cd.
I have actually rather successfully funded all of my cds this way and it is really gratifying to see all of the orders come in and it is a great way of being encouraged to get into the practice room / studio.
You have to set a date that this recording will be done otherwise you will not be accountable for finishing it.
I usually set a Christmas date because people are more likely to order a cd as a gift for friends as well as themselves.
Good luck I think you will be pleasantly surprised at the results if you have a strong fan base.