May 15, 2010 / 3:43 PM / 7 years ago

Fund-raising sites offer new options to musicians

NASHVILLE (Billboard) - As record labels embrace new platforms to create direct-to-fan releases, they're changing how the industry thinks of websites usually associated with unsigned or emerging artists.

Two recent examples stand out. U.K.-based Atlantic Records artist Natty is using Pledge Music to finance the release of an EP, while indie Kill Rock Stars is using Kickstarter.com to raise funds for the release of a vinyl boxed set featuring the collected works of Swiss female post-punk group Kleenex.

The fan-funded release of albums is hardly a new idea. Marillion backed the creation of its 2001 album "Anoraknophobia" by amassing 12,674 preorders. In 2008, singer-songwriter Jill Sobule raised $75,000 in just six weeks by offering "gifts" for contributions ranging from $10 to $10,000. ArtistShare has hosted fan-funded projects since its launch in 2003. And startups Sellaband and Slicethepie have given the unknown and unsigned a way to raise money to record and market albums.

But new platforms like Kickstarter and Pledge, which both launched last year, are helping expand the fan-funded model beyond the early adopters and do-it-yourself crowd.

SETTING GOALS

Kickstarter offers artists and fans a conditional purchasing system under which an artist establishes a fund-raising goal for a project and then solicits contribution pledges from fans. The artist collects the funds and manufactures a product only if the goal is reached. Although similar sites exist, Kickstarter has become a favored resource of authors, filmmakers and designers.

A month after launching in April 2009, Kickstarter campaigns had raised $60,000, according to co-founder Yancey Strickler, formerly editor-in-chief of eMusic. By the end of its first year, the site had raised $1.5 million and logged its 1,000th successfully funded project. It acts only as a fund-raising platform and leaves the marketing of projects to artists.

That fit the bill for Kill Rock Stars and its four-LP Kleenex boxed set. The label released the band's collected works on CD in 2001, but fans have been asking for a vinyl version of the set, according to label head Portia Sabin.

Kickstarter is helping Sabin take the guesswork out of a potentially expensive project. "I thought Kickstarter was a great opportunity to find out if the demand is strong enough to make this," she says.

The label has set a goal of raising $20,000 to fund the project. If it reaches its goal, 2,000-3,000 copies of the set will be sold to fans who pledged and through the label's distributor, Redeye. If the fund-raising falls short, those who made pledges won't pay anything, while the label will avoid the expense of manufacturing a product that may otherwise go unsold.

EMOTIONAL INVESTMENTS

London-based Pledge takes a somewhat different approach. Whereas Kickstarter focuses exclusively on raising funds, Pledge chooses its campaigns and works with the artist and label to set and reach realistic targets, according to founder Benji Rogers.

The extra attention comes at a premium. Pledge takes 15 percent of a successfully funded project's revenue, considerably higher than Kickstarter's 5 percent fee. Even so, Rogers says 41 have met their goals, 70 projects are under way, and 300 campaigns are waiting for approval.

"We're not a strict fan-funding site," Rogers says. "We're really a boutique direct-to-fan platform."

Natty is using Pledge to engage his fans with an EP while he's between full-length albums for Atlantic. The artist has developed 22 different packages that combine the EP with exclusive items and such experiences as a CD of rehearsals, backstage passes, Skype access to a rehearsal or a private concert at a fan's home. All pledges get access to a special Web page with rough mixes, demos, videos from the recording studio and live tracks.

While Atlantic has been only minimally involved in the details of Natty's Pledge project, the site has been approached by some indie labels that want to use it for marketing support. "It's hard for a label to manage that relationship with the fan," Rogers says. "We're set up to help that relationship by getting the fan emotionally invested in projects from the word go."

Pledge also incorporates charitable giving into its projects, giving artists the option to donate a portion of their proceeds to one of 82 charities. Natty was attracted to Pledge, Rogers says, because he wanted to help raise money for cancer research after one of his producers, Johnny Dollar, died from the disease.

Despite their differences, Kickstarter and Pledge engage fans in similar ways. Each funded project is, in a sense, a collaborative effort with fans. Artists can update fans on their fund-raising efforts and recording sessions. Rogers says New York-based band the Damnwells sent out 62 updates while it raised more than $32,000 to record its latest album, which is given away for free at its website.

Ultimately, these companies can be important sources for labels wary of risking resources on certain projects. Kill Rock Stars' Sabin says her label isn't abandoning its role of finding and developing talent. Instead, it's using these fund-raising platforms for projects it wouldn't otherwise pursue.

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