Using Fan-Funding Techniques to Help Direct a DTF Marketing and Sales Campaign

One of the online sales techniques I’ve been advocating in my online courses at Berklee is for artists to create different physical and digital products and make them available on their own site at tiered price points. The idea is that you can offer something for all of your fans – the hard core fans might be interested in something from you that is a little more personalized and rare, and newer fans might be able to get something from you that wont break the bank. All the while you have the ability to offer something that cannot be purchased at traditional retail, which makes the experience of purchasing off of your site more rewarding for your fans. Here’s an example from the Yim Yames site:

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The Musicians Guide To Fan-Funding

Emerging musicians are in an eternal struggle against two evils: funding projects and growing a fanbase. In the past, musicians have funded their own albums, and have used it as leverage to gain more fans. But artists on a fixed income may run into issues funding their own projects, which can have harmful effects on the quality of the final product.

Of course, the next option is to release a demo or EP and work on building a fan base, meanwhile shopping around for a record deal with a major or indie label. The benefit here of course is that all of the financing of the album is accounted for, but lets face it, this is not the easiest thing to pull off. Labels typically won’t even look at you until you’ve crossed the 10,000-units-sold mark, and unfortunately that is becoming an increasingly difficult task to accomplish:

…in 2008 there were 1500 releases that sold over 10,000 album units. Out of that there were only 227 of them that were artists that had broken 10,000 for the first time. So in the whole year only 227 of the artists were artists that had broken what we call the “obscurity line.” When you sell 10,000 albums, you’re no longer an obscure artist; people know about you. You may not be a star yet, but you’re in the game. That gets you out of the glut and into the game. We looked at the 227 and identified that only 14 of them were artists doing it on their own and all the rest were on majors and indies; a little more than half were on indies.

~Tom Silverman Founder, Tommy Boy Records

And more often then not, you as the artist are stripped of some if not all creative control, resulting in an album that may work for the fans, but doesn’t work for you.

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Are fan-funded models the future of the recorded music business?

Does last weeks announcement of another fan funded music business model called bandstocks, reinforce the feeling that labels are beginning to loose their attraction to release established artists records? 2006 saw the first real roll-out of fan funded model sellaband.com. Since then sellaband has gone on to have 23 artists reach the $50,000 US dollar threshold to record an album. In 2007 Slicethepie.com appeared on the fan-funded radar and now we have another twist to the model in the form of bandstocks.

What are the differences between each of these fan funded models and what are the pros and cons for artists, fans and the entrepreneurs who have established them? What are the wider implications of these new models for the traditional recorded music labels and publisher’s alike?

Lets drill down on what each of these models offer the artist and fans/investors.

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