Beating the music business odds at SXSW
The Crowdfunding Manifesto: The Path to Creative Empowerment
Wednesday, March 16, 3:30pm, ACC 12AB
Over the past 12 months, crowdfunding has grown from a novel way for artists and entrepreneurs to raise money for target projects into a mainstream, start-here-first practice. By offering fans exclusive products and services in exchange for an online donation geared toward a specific goal – an album or tour most commonly – musicians aren't only leveraging their fan bases and local communities; they're now able to gauge market opportunities while front-loading the monetary risk of the endeavor at hand.
"People are talking about this as a new thing, but I really see it as a new spin on an old idea. Now it's just 'micropatronage,'" offers Brian Meece, co-founder of crowdfunding platform RocketHub (www.rockethub.com) and co-author of the Crowdfunding Manifesto. "We've found, and this is pretty accurate across all of the platforms, that the average contribution is a little over $50, so the amounts of funding coming in are much higher, I think, than I anticipated when we started building it out. We were expecting things to be very bottom-heavy, to be a bunch of $1, $5, maybe $10 transactions, but that's not the case.
"Those indicators are pretty positive that people will continue to spend, and that the reasons they're giving are a little different."
As more crowdfunding services emerge, Meece suggests that the next step is educating artists on best practices and exploring how the model can be scaled to the next level. Emerging platforms for mobile payments will likely have a large grassroots impact, while from the other end, brands are now looking for opportunities to tap into successful crowdfunded campaigns.
"A year ago, we were focusing much more on just the phenomenon of crowdfunding itself, and that alone is a game changer," offers Meece. "But now in addition to that, I would say the idea of brand synergy, of the brands that are interested in engaging and providing fame, fortune, and fulfillment for the creatives, they're able to see what projects and what fan bases are doing well.
"I'm not exactly sure how it's going to play out, because it's still very new, but I see that really being the second layer on top of crowdfunding."