In a music industry where it's a huge struggle to recoup the cost of making a record via streaming royalties, fan funding is taking on an ever-greater importance. In this post, I'm going to look at how to go about it effectively.
But first: what is ‘fan funding’?
Typically, you set a fundraising target and ask everybody to help you meet it by pledging to give a few bob (or lots of bobs) in exchange for ‘rewards’.
The greater the amount contributed, the greater the reward gained. So, for example, your humble fan pledges £5 and gets a digital download of the album; your Lord Ashcroft-type fan pledges £500 and gets a copy made of gold, a credit on the liner notes as executive producer of the album and the opportunity to sleep with the band and dictate musical direction.
The whole thing is sort of like buying things in reverse: you pay now, get later. This is technically quite a bum deal, but I suppose that fans are not only getting a record (eventually) but a feelgood factor too; that warm glow which only arrives when you support a starving artist.
There’s usually a catch though: if you don’t meet your fundraising target by an appointed deadline, you don’t get any money; this being the case it’s a good idea to either have a rich uncle on standby to make up the shortfall, or have a few quid set aside yourself that you can donate anonymously and save face when not enough of your mates cough up.
In order to avoid the latter scenario, here are a few pointers on fan-funding to help you make a success of it:
1. Set your fundraising target very carefully
If you set your fundraising target too high, you might not get enough contributors to meet it - and this generally means zilch for you.
So before you start trying to finance a record using the generosity of your fans/mates, work out the number of REAL pledges you’re likely to get, and the average amount of each pledge - and base your fundraising target on that. Be conservative.
2. Be prepared to plug a cash gap
If you ignore the above tip, you may fall several hundred or even thousands of pounds short of your target. In which case, you’ll need to take a financial hit if you want to receive any dosh.
So, when setting your target, work out what you can really afford to contribute yourself, and be ready to spend it.
3. Know your market
When offering ‘rewards’ in exchange for pledges, remember the market you are operating in: a music industry where content from big names – i.e., not you, sorry! – is now dirt cheap, or free.
So don’t charge £15 for an ‘exclusive digital download’ when Madonna’s latest album can be bought on iTunes for a fiver or streamed on Spotify for free.
4. Offer decent rewards
Make sure that the rewards you are offering are not all just opportunities for you to be self-indulgent.
Although your signature on a CD might appeal to a genuine fan, it’s not going to impress your friends and family much; and no, they aren’t going to be that bothered by you offering to sing them a cover of their choice in their house for £600 either.
So consider offering rewards that might seriously appeal to your ‘friend-base’ as well as your fanbase.
Think outside the musical box: for example, consider bundling cool items of clothing with your CD that make use subtle use of your artwork (without being too promotional).
In essence, don’t make all the rewards too much about you; accompany your CD with items that are genuinely appealing in their own right (you might like to read our suggestions on physical items that your music fans might enjoy for some ideas).
5. Get the intervals between reward prices right
A very obvious point this, but people have different levels of disposable income.
However, I’ve seen musicians overlook this when setting their rewards pricing structure, for example by offering rewards that jump straight from £5 for a digital download to £35 for a signed CD copy of the album.
Since the fan-funding model in reality often relies heavily on people you know giving you cash, an approach like this means you are effectively forcing many friends and family members to choose between appearing a tad mean (by plumping for the £5 option), or generous but at a price they can’t afford (£35 – a lot of money for an independently released album, even if it comes with your name scrawled all over it).
The more sensible – and fair – thing to do is to also offer a sliding scale of rewards that are priced at sensible / even intervals: for example, a digital download for £5, a CD for £10, a signed CD for £15, a vinyl copy for £20, a signed CD and vinyl copy for £25 and so on.
6. Remember that you are NOT a charity
When using the fan-funding model, it’s easy to view yourself as a very worthy cause...and forget that you’re not actually raising money for charity. You’re raising money for yourself.
People do all manner of wonderful things in exchange for cash – climb mountains, trek across India, run marathons, eat vast quantities of mackerel and so on – but the key difference is these things are generally quite challenging and all the money raised is donated to improve people’s lives.
So when asking people to contribute, tone down the rhetoric and don’t come across like you are the musical equivalent of Mother Teresa and that those who are giving you dosh are somehow helping to save the planet.
It’s easy to get wrapped up in your own creative projects, but it’s extremely important to show that you understand, when asking people for money towards your project (or indeed when flogging them CDs in a more conventional way) that this is actually quite a big ask.
7. Consider whether you really want to ask your friends for donations at all
If you are in the lucky position whereby you have a genuine fanbase – a mailing list, for example, comprising several hundred loyal fans who love you and want to buy your music – think long and hard about whether you want to bother your friends for pledges at all.
It may be that you have more than enough genuine fans to fund your project, and although your friends may be a source of additional cash, there may ultimately be more disadvantages to badgering them for money than not.
Firstly, you may irritate people you care about and, from a more selfish perspective, there are musical contexts when you might REALLY need to enlist your mates' help (for example, they may be more useful as bums on seats at an important showcase gig or album launch).
A balanced approach is to ask your fans to contribute first, and, if it transpires that you're not meeting your target, to ask friends to step in and help at that point.
8. Limit your communications
Don’t post demands for money on Facebook every five minutes (tempting and easy as it is to do so), or email people once a day asking for cash so you can record your album at Abbey Road. Contact people when it counts.
9. Thank people personally
Finally, when somebody donates to your project, don’t take them for granted by relying on round robins or automated thank-you emails from your chosen funding website.
If at all possible, send those who pledge money an individual email to thank them, or better still, drop them a text or a call saying how much you appreciate it. Not only is this a nice thing to do, but it will make people feel far more inclined to support you in future.
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