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The Case Against Crowdfunding Platforms

Posted: 09/10/2012 01:00

A great number of UK music artists I admire now use crowd-funding platforms like PledgeMusic or Indiegogo to raise cash from fans, to fund albums, videos, or touring. It's very quickly been normalised in the music industry, to the point that you'll almost never hear a bad word spoken about these platforms. Unusually, they're popular with mainstream upcoming artists, the companies around them and also fully independent, self-described DIY or underground artists.

But something in me finds them disconcerting. I admit I've not once contributed money to an artist's Pledge campaign. Each time I hear about one, even when I adore the artist, my heart sinks. Yet people clearly feel it works and there are a pile of happy (on the surface at least) customers. It's a perfectly legitimate way to fund music in the new online paradigm. So, what's my beef?

As hugely successful US crowd-funding company Kickstarter launches in the UK; for the first time offering a serious competitor to PledgeMusic, it's worth considering the case against, if only to enable a debate when the narrative is so blandly positive. Full disclosure: I've never tried it myself. Xtra Mile Recordings did run a successful Pledge campaign to replace stock (including my albums) destroyed in the depot fire (after the London riots) but I have no personal experience of running one. Trying to figure out why I'm not into them, here's what I've come up with:

The emperor's new clothes. Wasn't half the point of going online to get rid of third parties? Instead it's a messy battle. We binned major labels but got trapped in the price-controlled, tax dodging chaos of Amazon and iTunes, even when Bandcamp gave us a cleaner alternative. Then along came this whole new generation of third parties, jumping in ahead of the distributors to get their share, before the music's even made. And because the process is automated, artists and punters alike seem blind to an obvious truth; at a basic fundamental level, web-based platforms are the same old villains wearing a hipper jacket. Yet again they find a thing that artists (wrongly) believe they can't do alone, then slide in between artist and audience by offering that thing as a service, in order to cream off profit.

I'm convinced almost any artist with a moderate fanbase can crowdfund just as easily, with less commitment, more control and a greater overall ROI (return on investment), just by having conversations with the right people. What is it about these formal frameworks that let the artist off the hook of asking personally for support, when it's usually the exact same people who end up contributing anyway? You want someone's money, fucking go and ask them. Write a letter. It feels as if everyone's playing at grown-ups by using a third party website as a dressing-up box.

That's too much money. For running a largely passive, artist-driven web-based platform (nothing more complex than Flickr, Instagram, Facebook or a hundred other free sites) with a simple financial processing structure bolted on, these companies charge 15% of revenue - and are less than transparent to funders, who are often only vaguely aware that there's a percentage taken at all. And that's a lot. That's what a music manager or booking agent took in the old days, for doing a massive load of work to bring in income. Artists have spent 100 years deeply resenting - and regularly sacking or suing - managers and agents on the same percentage they now happily give to strangers for letting them sit on their web servers for a bit.

Treats for funders are embarrassing and a total arsehole to get done. Money is teased out of devoted fans with offers of rewards, exclusive content, private attention, all sorts. But these bring the wrong kind of closeness; too big a sense of a personal debt owed; often placing artists in uncomfortable situations. Trying to record music with 25 funders sitting in the control room as part of a treat day is a joke. A cause of this over-reach is also malevolent: the ever-increasing sense of urgency (becoming terror later) as the deadline looms, because 'success' is so important it erodes any objective sense of what is realistic or achievable. Which brings me to:

Something not even made yet is already a failure. On Kickstarter 56% of projects fail to make target and get zero. Unpack that stat and it's pretty concerning: these creative people didn't undertake Kickstarter lightly in the first place, they made a plan, shot a video, offered their fanbase all the bonuses in the world and still failed to hit target. That's a whole lot of effort and commitment gone to define themselves as a big fat loser, for financial reasons rather than artistic judgement. I wonder what the damage done is, in real terms.

This is innately biased (of course) against inarticulate, disorganised and working class artists (whose wider communities and support bases tend to have fewer financial resources). I also reckon, although this is tenuous, that the system leans in favour of technically innovative, science-based, gimmicky, design or technical projects over pure art, because the former can be more easily explained, ahead of actually doing it.

New album releases go on forever. First the artist talks up the new album before even starting to make it. Then they endlessly document the process. Then it's done and first they release it exclusively to funders. Then they do other posh formats separately, in order to send them out to other funders. Finally they release the album to everyone else. It's been weeks since those first people got hold of it and someone immediately file-shared it. We're bored now.

Finally, my biggest, most esoteric dissent speaks to broader issues about fundraising campaigns in general. These platforms rely on everyone turning a blind eye to a truth: that a very few devoted followers will fund almost everything. When artists draw resource from their audience, a very select core number of individual funders (relatively wealthy and truly devoted) will underwrite the whole ballgame. This is already true of the wider music industry: If we started analysing the tiny contingency of people propping up our entire business, we'd be aghast. In crowdfunding, success or failure depends on whether the artist has those particular followers. I say this without specific data to back me up - however it is based on first-hand experience not in the music world, nor business, but in the third sector (charity industry).

In language and structure, arts crowdfunding campaigns far more closely resemble charity appeals than other kinds of business fundraising, right down to the ideas around 'donating' in return for special rewards. A charity industry 'universal truth' is that at least 80% of money comes from fewer than 20% of donors. Successful crowd-funding campaigns will always have exclusive, very high value rewards for much larger amounts, where 'selling' only a handful of them underwrites a massive proportion of the campaign. It's an identical approach.

Honestly, so many artists I know who've crowdfunded would back me up here: because of this principle, the success or failure of a project is less down to the size of audience, or how hard the artist works the campaign across the breadth of their fan-base; it's more down to whether they're lucky enough to have a small core of very devoted and relatively wealthy fans, and/or some rewards of high value to offer those fans.

I believe, far too often, the artist becomes slave to the campaign, rather than the other way around. You would be astonished the number of artists out there who, even after publicly successful target-smashing campaigns, will later quietly express a range of regrets that they wouldn't want their generous audience to know about. They look back and regret what they offered; regret the time wasted honoring those offers; regret how panicky they got about a ludicrous arbitrary definition of 'success'; regret how the balance in their relationship with supporters shifted; regret not finding the funds elsewhere, so they could be more flexible about what it was they were making.

And these are the ones who won.

Now, I'm not really bothered; from all angles it's just people making choices. I guess I just feel a bit sorry for them all, that they couldn't try other ways first. And phew, I didn't even mention Amanda Palmer.

PS. Thanks to music fan and Words With Friends opponent Matt Rhodes for emailing me a question about recorded music pricing, which triggered this article - sorry I haven't actually answered your questions at all, Matt, I'll get to them.

This article was first published in Louder Than War magazine.

 

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