Crowdfunding Music A look at crowdfunding as an alternative source of funding for independent creators within the recorded music industry Haakon André Søttar Hagen SUPERVISOR Daniel Nordgård This master’s thesis is carried out as a part of the education at the University of Agder and is therefore approved as a part of this education. However, this does not imply that the University answers for the methods that are used or the conclusions that are drawn University of Agder, 2017 Faculty of Fine Arts Department of Popular Music FOREWORD THANK YOU to my supervisor, Daniel Nordgård for his excellent supervision and advice throughout the span of my work. Also THANK YOU to Bendik Hofseth and Peter Jenner for extra guidance and feedback. THANK YOU to Aaron Cupples, Joel Hughes and Christer Falck, for being willing to take part in my thesis and giving me frank and insightful answers when being interviewed. Without their contributions this thesis would not be possible. Also THANK YOU to Andy Inglis and Sally-Anne Gross for helping me get in contact with my interview subjects after my own attempts at getting similar interview subjects failed. THANK YOU to my mother, my father, my sister and other relatives for their support through my many years of music business studies. THANK YOU to my all my friends, classmates and others in need of thanking. THANK YOU to Anja, Anja, and Viktoriia for keeping me company while working on my Master’s thesis, and for not leaving me when I complained. I ABSTRACT With larger crowdfunding campaigns getting the media hype for crowdfunding going, crowdfunding is often touted as the future of creative project funding. With examples like Amanda Palmer always being presented, is crowdfunding the future and saviour of funding for recorded music projects? This is what this thesis is trying to answer, to see if crowdfunding is a suitable alternate way of funding projects. The subject is an often- discussed one, but a subject that has not seen much academic research. The success of Amanda Palmer can often be put down to her already having fans from previous work with The Dresden Dolls. But that is exactly what you need to be able to crowdfund a new release: fans. A crowd. Through interviews with three subjects in different points of the music industries and/or the crowdfunding industry, and some interesting statistics this thesis concludes that there is a future for crowdfunding as an alternative way of funding music, but not in hundreds of thousands to a million dollar range like with Amanda Palmer. Most successful campaigns live in the $1000 to $10,000 range, which is a pointer to the true power of crowdfunding: smaller artists being able to activate the small fan base they have acquired through gigging and other releases to get them to fund new projects, from albums/EPs, to tours, to books. Crowdfunding is a tool for smaller artists to fund new ventures without record label support and doing it by themselves. II TABLE OF CONTENTS FOREWORD ..................................................................................................................................................... I ABSTRACT ..................................................................................................................................................... II TABLE OF CONTENTS ............................................................................................................................... III I: INTRODUCTION ........................................................................................................................................ 1 1.1 TOPIC: ......................................................................................................................................................................... 1 1.2 RESEARCH QUESTION ............................................................................................................................................... 2 1.2.1 Main concepts of research question ......................................................................................... 2 1.2.2 Sub-questions to the research question ................................................................................. 2 1.3 REASON ....................................................................................................................................................................... 3 1.4 DEFINITION OF KEY PHRASES ................................................................................................................................. 3 1.5 THESIS LIMITATIONS ................................................................................................................................................ 5 II: THEORETICAL BACKGROUND ............................................................................................................ 6 2.1 MUSIC BUSINESS CHANGES ..................................................................................................................................... 6 2.1.1 Structure Of the Music Industries ............................................................................................. 9 2.1.2 Revenue ............................................................................................................................................. 10 2.1.3 Funding ............................................................................................................................................. 12 2.1.4 Indie/D.I.Y ........................................................................................................................................ 16 2.2 CROWDFUNDING .................................................................................................................................................... 18 2.2.1 Ways Of Crowdfunding ............................................................................................................... 20 2.2.2 Famous Examples ......................................................................................................................... 21 III: METHODOLOGICAL APPROACH .................................................................................................... 24 3.1 DATA ......................................................................................................................................................................... 25 3.1.1 Qualitative data vs. quantitative data ................................................................................. 25 3.2 INTERVIEW .............................................................................................................................................................. 26 3.2.1 Advantages ...................................................................................................................................... 27 3.2.2 Disadvantages and challenges ................................................................................................ 28 3.2.3 Ethical concerns ............................................................................................................................ 30 3.2.4 The Interview Guide ..................................................................................................................... 30 3.2.5 Interview subjects ......................................................................................................................... 32 3.2.6 Analysis .............................................................................................................................................. 33 III 3.3 STATISTICS AND PROJECT NUMBERS .................................................................................................................. 34 IV: FINDINGS ............................................................................................................................................... 35 4.1 INTERVIEWS ............................................................................................................................................................ 35 4.2 NUMBERS FROM CROWDFUNDING ..................................................................................................................... 49 4.2.1 Successfully Funded Projects ................................................................................................... 49 4.2.2 Projects and Dollars ..................................................................................................................... 49 4.2.3 Projects and Genres ...................................................................................................................... 49 V: DISCUSSION ............................................................................................................................................ 51 5.1 CROWDFUNDABLE ARTISTS? ............................................................................................................................... 51 5.2 FOR THE FANS ........................................................................................................................................................ 52 5.3 MUSIC COMPARED TO OTHER GENRES ............................................................................................................... 53 5.4 CROWDFUNDING REPLACING RECORD LABELS ................................................................................................. 54 5.5 THE FUTURE AND SUSTAINABILITY ..................................................................................................................