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May 22, 2012

AFP on "Where Is All the Money Going?"

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Posted by Alan Wexelblat

Amanda Palmer posted a long (and, as is her way, rambling) blog entry/Kickstarter update addressing the question of "Where All This Kickstarter Money Is Going."

It's short on detail and long on concept, but it's still worth reading as it rattles off the very long list of people and things and responsibilities involved in making a major multi-faceted project come together. As I wrote back in April when I signed up for the Kickstarter, this particular vision of music's future isn't just about a band, an album, a tour. It's about bringing together dozens of creative people each contributing to a multi-faceted, multi-experience endeavor. And that kind of thing doesn't come cheap, even when many (most?) of the people involved are your friends and colleagues who share your vision and dedication.

Everyone needs to eat and artists need to get paid. If I have any criticism of AFP's approach here it's that she's very dedicated to pointing out that even if the Kickstarter clears a million bucks she's not going to get rich off it. That is important, especially when you're asking people up-front to give money and trust they're going to get something worthwhile down the road. As Palmer says, "...paying now for value later is what historically would’ve been a label’s primary purpose."

Since we (the Kickstarter backers) are taking that role, it's important we feel we're getting value for our invested dollars. Fine and good. But I'm very interested in this as a sustainable business model. If Palmer is right and the project looks only to break even then that's not good enough. The Kickstarter becomes an event, not a repeatable model. In my opinion, Palmer and the people who work on this (her band, her artists, etc.) should be making money this way, because art needs to be sustained, not just one-off events, and right now we don't have a better way to sustain art than to compensate directly the creative people involved.

Comments (11) + TrackBacks (0) | Category: Interesting People


1. Neil Gaiman on May 24, 2012 6:18 PM writes...

But the product made in this Kickstarter isn't the end of the production cycle. The CD and the concerts that are part of the Kickstarter are only for Kickstarter supporters, and are unique to that. (They'll also contain things that the thngs for sale to the public wouldn't.)

The Kickstarter exists to fund a CD release (to the public, not Kickstarter supporters) and a tour (ditto). The Kickstarter money funds the studio and promotional costs (just as a record label might have done).

The business model isn't, Make Money From 20,000 people. It's Use 20,000 people to crowdfund the costs of manufacturing and distributing and promoting a CD and a tour to the General Public. And then get rich from that.

You'd think a band who took their video and studio and promotional budget from a record label and used it as income instead of as an investment in their future were shortsighted. That's the Kickstarter money. That's what it's for.

Permalink to Comment

2. Ben Folds on May 24, 2012 7:33 PM writes...

Neil speaks truth. And...
I don't think your average person understands the music business in general, which would be a prerequisite to taking the leap into getting your head around a development like Kickstarter. Also, many believe that music couldn't possibly be real work and therefore shouldn't require compensation. This is bolstered by the current framework where most people don't pay for music. Of course, if we're not having fun to begin with, we've got nothing to sell, so riding that line is difficult enough. I think most get Kickstarter and some people will always feel any innovation is a threat and they'll be very vocal about it.

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3. Ben Folds on May 24, 2012 7:42 PM writes...

And to Alan, the current system of the music business is barely a break even business as it stands. We have to give crowdfunding a shake and see. I think it's promising as there is far less likelihood of being 'too big for your britches' - some check and balances. Getting by is the dream - breaking even. Good stuff.

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4. Meilin Miranda on May 24, 2012 7:44 PM writes...

I explain it as "front loading" your sales. The Kickstarter is only the beginning. Once the backers have their stuff, it's out there for everyone else--FOREVER. And that's where we make our real money. The thing I hate most about people who misunderstand the KS process (and that does not include the OP) is that it's not begging or even a pledge drive. Both of those are closed; while a KS is finite, what it makes possible is not.

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5. Dean on May 24, 2012 7:57 PM writes...

I think the model is sustainable though. It doesn't matter that it's an event. It basically funds Amanda and her team to make music, tour, and do the amazing stuff they want to do for the next 12-18 months. After which, why not do it again? Between buying their albums and going to shows I spend a bunch of money on my favourite artists every year. Giving them that money up-front frankly makes little difference to me.

No, it's not putting money in the bank. But y'know, neither does my job. I make enough money to get by, have a holiday once a year, buy video games and go to music and comedy shows. I don't end up with tons leftover either.

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6. Andrew lorien on May 24, 2012 11:11 PM writes...

I make websites for a living. When we pitch for a $500,000 job, the company gets paid a little bit up front, a few progress payments along the way, and a big chunk when we deliver. After paying all of us employees and the rent, the guy who owns the company doesn't get much in the bank - and he could make a loss.
Seems like exactly the same model to me.

Permalink to Comment

7. Jake on May 25, 2012 1:58 AM writes...

This guy REALLY makes websites for a living, guys!

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8. Glenn Ford on May 25, 2012 3:59 AM writes...

Many years ago at a gig in Melbourne , I spoke to the lead singer of a band who were touring like there was no tomorrow and he explained to me that they had no choice ,they owed the record company heaps and they wouldn't see a cent until they sold about a 150,000 records and that was a shit load in Australia in 1980s ,1 record 1 tour that was it the band was gone . I see the kickstarter as more of away of allowing me to be a patron of the arts I prefer ,it's like a subscription to the ballet or the opera , I pay upfront for some of the art , I get stuff that a ticket to the show doesn't get you and I pay if I want the gala performance . It is an event , every time the subscription comes around I make a choice ? Do I or don't I

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9. Alan Wexelblat on May 25, 2012 8:17 AM writes...

@Andrew: if you don't plan your billing to account for profit I can't help you much. I think that's an error.

@Glenn: I know that touring and particularly touring under the pressure of a major-label pay-back-or-die contract is hard and sucks the life out of many performers. Part of why I want new models to succeed is so we have alternatives to that. The major-label model is still going to work for some acts/artists. But if it remains the only workable/available model then we are in DEEP trouble.

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10. Andrew lorien on May 25, 2012 9:46 AM writes...

I make websites for a living. When we pitch for a $500,000 job, the company gets paid a little bit up front, a few progress payments along the way, and a big chunk when we deliver. After paying all of us employees and the rent, the guy who owns the company doesn't get much in the bank - and he could make a loss.
Seems like exactly the same model to me. Start a project, promise some people a flat wage and some activities percentage, find the money, finish the job, hope that you'll be able to do it again.

Permalink to Comment

11. Mary Layton on May 25, 2012 3:38 PM writes...

It's been interesting watching the debate that's developed from the success of Amanda's Kickstarter. I think any sort of artist (I'm a visual one) probably 'gets' the concept - especially musicians and especially ones who've dealt with record companies in the past. However, crowdfunding albums/tours isn't a new idea (Marillion have done it on their own since 1997), it's only that Kickstarter and other sites have made it easier, and more visible. And, as Ben said, the average person won't understand how the music business works traditionally, so it's not easy for them to understand the new tools artists are embracing. Amanda's success makes for an excellent opportunity to educate the fans and let them be involved in the process.

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