THE BLOG
10/16/2013 11:59 am ET | Updated Jan 23, 2014

Beggars' Banquet: New Music Schemes for New Music Dreams

Over the last decade, we've heard a lot about new marketing and funding strategies for music and musicians that were emerging in the age of near ubiquitous internet access. Streaming music and video, Youtube, email lists, artist/group websites and blogs, fanzines, Facebook, digital and hardcopy sales, self-publishing, on-demand publishing and others. Using these new tools, musicians of all types, no matter how obscure the niche or style, were, for the first time, able to easily bypass the legacy labels and their tightly controlled production and distribution networks and produce and market their own music.

For composers of New Music, these marketing tools are very helpful. We can sell our scores digitally using services like Lulu or Lightning Source (both of which I have used for years) and we can sell our music on a plethora of sites using a service like Tunecore. There are so many marketing opportunities, in fact, that it would be difficult to list them all. Funding, however, is a different story.

One of the main funding sources for composers is the "commission," where someone pays for the composer to compose a piece. This is a long-standing tradition in classical music, which has relied greatly on the support of wealthy patrons (private, public, religious) for centuries, and it continues to this day. These patrons were generally wealthy admirers (Stravinsky's Concerto in E-Flat-"Dumbarton Oaks"), the aristocracy (Beethoven's three Razumovsky String Quartets), the State (hard to believe, but Shostakovich's Native Leningrad Suite, was commissioned by the Soviet Secret Police), and the church. (In earlier times, many composers, for example J.S. Bach and Palestrina, wrote sacred music for their respective churches, which is how they made a living.) In any case, these patrons commissioned works from these composers because of their admiration of the composer's creative work. The patron's expectation is that the artist will create a work of art that will be of similarly high quality, one that might even earn the patron a footnote in history, without which these well-to-do aristocrats, bureaucrats, clergy or captains of industry would likely be entirely forgotten. In this sense, patronage is a dignified form of arts "commerce;" it is a concrete acknowledgment of artistic genius that provides the artist with financial support or employment, along with whatever degree of prestige or social status that comes with being recognized by the ruling class.

In contemporary society, the patrons no longer include royalty or the church to any significant degree. Composers are commissioned by arts organizations, public and private grants of various types, performers, university ensembles and, of course, wealthy individuals who want to promote music and the arts.

Commissions have existed for a long time, but the entire concept has been cleverly updated in the internet age, most notably through an online service called Kickstarter. Kickstarter has been featured in the New York Times, CNN, WIRED, NPR and the Bay Citizen, celebrating the birth of this "new way to fund and follow creativity."

Kickstarter accepts "pledges" to fund a specific art project that is featured on their site. An artist opens an account, and then posts information regarding the project along with the amount of funding that is being sought. You simply make a pledge and then a charge is made to the your credit card through Amazon.com when the project deadline is reached, but only if the project has been fully funded as requested. In terms of fees for the service, Kickstarter takes 5 percent and Amazon takes 3-5 percent, leaving the artist with about 90 percent of the donations. Projects include all manner of creative endeavor-recordings, photography, commissions, films and every other type of creative project you can think of, and some that you can't (there's actually one from someone who wants people to help pay for his masters degree dance recital!).

Kickstarter uses Amazon's payment system to accept donations after which it forwards the funds (minus the 8-10 percent fees) to the artist or organization. It's a slick service that is, so far, very successful, supporting a staff of 69 (up from 18 in 2010!).  Kickstarter absolves itself (as it should) of any tax or legal liability, but there are tax issues for the artist; the pledges are still income and must be reported, so receipts for expenditures must be fastidiously kept. Kickstarter simply provides a site to advertise, collect and transfer funds to the artist if the project reaches its full funding goal.

Kickstarter takes the crowdfunding concept and gives it credibility and stability by providing a sharp, professional and low-cost means for artists to not only to promote themselves and their products, but to acquire the funds to create the products in the first place. And, they've given it a corporate feel, while at the same time maintaining a quirky, grass-roots and generally "artsy" demeanor. That's not an easy task, but Kickstarter has succeeded marvelously in combining innovative commerce and what appears to be genuine arts advocacy.

This fund-raising model seems, in retrospect, almost obvious in this day and age-artists and fans collaborating in a mutually beneficial scenario to further the creation of new art. What could be a more perfect use of modern communication technology in support of the arts, especially in a time when private and public funding appears to be waning? And it's community supported, it's anti-corporate while at the same time being corporate, and it inverts the hated "power structure," returning control to the artist who collaborates with fans from the outset.

Crowdfunding, though, is really nothing new. Every successful artist is, by definition, funded by fans. Many artists do receive initial funding from public or private sources, but a real fan base must be developed, one that is willing to continue buying your work, attending your concerts, watching your films, etc. and, very importantly, one that is large enough to generate sufficient income not only for the creation of the art, but also to support the artist's living expenses.

Crowdfunding is not a Pyramid Scheme (it doesn't have multiple, compounding, greed-fueled levels so it is completely legal and above board) but there are similarities. With crowdfunding, there must be a large number of small donors at the "bottom" who send their money "up" to the artist. This group is probably made up mostly of friends, family, acquaintances, neighbors, fellow grad students, peers, colleagues and perhaps the occasional wealthy donor who will kick in a larger sum. The number of donors is, therefore, limited to perhaps a few hundred at best (the current average is about 100 donors per funded project) which means that the foundation is weak. The Pyramid Scheme has upwards of a dozen compounding levels while fan-funding has only three levels-the donors, the artists, and the roommates in the penthouse suite, Kickstarter and Amazon. Family, friends and fellow grad students are not, however, real "fans," they're probably better described as "hostages," and their goodwill is not bottomless:

"Honey, I just got another Kickstarter funding invitation from your niece. That's the third one. I thought we 'kickstarted' her career with the first two? I'm thinking her career needs more than a kickstart at this point, it needs an ambulance and defibrillator."
"Send her one more, and then we're done."

"Multi-level marketing" schemes like Mona Vie have the same problem; once the personal relationship capital has been burned up, most "associates" have trouble finding new "clients/associates" to inhabit their downstream. Basically, all of these schemes are sustainable only as long as the goodwill remains, which, for most Kickstarter users, is probably two or three projects at best. After that, if you haven't built a legitimate fan base made up of people who don't share your DNA or your DMA, your crowdfunded career is finished.

Since its launch, Kickstarter has funded almost 50,000 projects and has raised, astonishingly enough, over $800,000,000! That means that Kickstarter has made over $40,000,000 and Amazon has made $24-$40,000,000. Sure, the artists have grossed $721,000,000 but their net is zero. (Actually, they probably go into the red from the many unseen ancillary expenses that crop up in arts production.) So, the bottom level donates the week's Starbucks money, the top level rakes in a lot of cash, and the creator hopefully gets most of the project expenses paid. Crowdfinancing thus does have significant and ongoing income potential, but, unfortunately, not for the artists.

But you have to hand it to Kickstarter-they have created a new means of actually making money (and serious money at that) from the arts, which is something that is becoming more and more difficult for artists to do. As such, the real winners in crowdfunding are the online portals themselves. (I'm sure there are some benefits to the communities in which all of these projects are presented, but I do wonder how local businesses and, indeed, extant arts organizations are effected by this diversion of such a staggering amount of disposable income.) The artists, however, are caught in a pincer between the small number of potential donors (whose contributions will diminish as quickly as the evaporating relationship capital upon which it is based disappears) and the real money makers (the occupants of the top level), Kickstarter and Amazon. Meet the new boss, same as the old boss.