Is this the Golden Age for Artists to Build Careers?
I’m seeing more and more success among artists from fan funding. This is the golden age for artists in terms of the likelihood they can make a living from their music.
The music industry is growing, this is clear from the amount of new music you can discover out there if you’re willing to look for it.
What’s hard to believe is that musicians invest more every year on production tools to make music ($18 billion) than the recorded music industry generates in total revenues ($17 billion).
Music businesses and independent artists have survived on a host of systems that are outdated and no longer work, meaning the majority are unable to fully optimize their music catalogs and achieve their commercial potential.
Times have once again changed and musicians can now take back the control over their career and earnings.
The mindset of being the underdog and the taken victims of BIG business has been replaced by stronger words like fan loyalty, niche marketing, and crowdfunding.
The internet that first took away music sales has brought back bigger rewards for musicians who are committed and willing to look at their music as an original product and unique commodity.
For those who work hard to develop their skills to the top of their game and become a BIG fish in a Micro-Niche category, the returns are larger than you can even imagine.
This doesn’t mean it isn’t tough to start a band or music career that’s fundable. It’s certainly not easy to get to that level but if your truly passionate about your music and you want this more than anything in the world, then this is the time to make it happen.
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Before we get to the good stuff, let’s look at why streaming only as a means to get paid for your work isn’t a good plan.
The numbers just aren’t there. According to recent stats, Apple Music, the world’s second-largest audio-streaming subscription service, pays artists (and record labels) an average of $0.0056 per play. At Spotify, the biggest audio-streaming service on the planet, this figure is close to half that amount, at $0.0032. At YouTube, it’s as low as $0.0009.
With pay outs this small, it seems ridiculous to push all our best fans to these streaming platforms where popular artists will burry you and you make no money for the introduction.
In their defense, streaming companies often seek new ways to help artists boost their income. That’s why YouTube acquired Bandpage three years ago, a company that sent a million fans a month directly to artists’ online merch stores. And it’s why Spotify has just indicated that it may one day introduce “tipping” on its platform — a system that allows fans to directly deposit one-off sums of money into an artist’s digital account.
Artist crowdfunding is now well-known in music industry circles thanks to sites like Kickstarter, which was used by Amanda Palmer to raise $1.2 million from her fans for a new album project in 2012.
Since then, other services like Patreon — via which fans can pay a direct monthly subscription to artists and Crowdfund where you can set up levels of perks and rewards for your fans to contribute.
Now, though, a fresh streaming-centric approach in the crowdfunding space is gaining real traction. If you could invest money into an artist’s music, in a manner akin to the stock market — enjoying a significant financial return should your favorite backed act become the next Drake or Billie Eilish — would you do it?
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Last week, a promising new equity-crowdfunding company emerged, backed by seed money from the likes of investment group Tagehus, plus platinum-selling Swedish artist Danny Saucedo and Eastate, a company owned by the family behind East Capital Group — an investor in Spotify. Stockholm-based Corite is, in essence, a digital music distributor like TuneCore, delivering an artist’s music onto a variety of key modern services like Spotify, Apple Music, Pandora, and TIDAL. But it also comes with a unique twist — enabling acts to raise money by selling a share of their future streaming royalties to fans.
Artists can set both the duration and percentage of the revenue cut a fan (or group of fans) will receive for their investment. Artists hold on to ownership of their copyrights, but are contractually bound to apportion a chunk of their future earnings to their supporters.
One of the biggest challenges for any artist or label in today’s music marketplace is the noise.
With nearly 40,000 tracks being uploaded to Spotify daily — equivalent to around 15 million a year — cutting through with mainstream, sledgehammer marketing campaigns is getting much harder. And that’s without considering how the likes of Netflix, Fortnite and Instagram are draining consumer attention away from music. These conditions will become one of the biggest selling points to artists for the equity-crowdfunding model in the years ahead.
If that sounds a little pie in the sky, consider this: The most popular music artist on Instagram today is Ariana Grande, who boasts around 162 million followers on the service. If she could convince just one percent of these fans to invest $10 each into her new music, it would net her $16.2 million — a figure that blows most major-label advance checks out of the water.
Tengblad says that the next iteration of Corite could see industry professionals and social media influencers being able to trade their services — as opposed to their cash — for a percentage revenue stake in an artist’s music. “If you want an Instagram influencer to do something today, you have to pay them money,” Tengblad says. “But if they believe they can become a great A&R person — that they can find the next hit and then promote it to their audience — a ‘co-right’ revenue share like this might make a lot of sense.”
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