IOUmusic: New Artist Crowdfunding App Launches
How Does It Compare To Other Fan Funding Sites?
IOUmusic, in a similar vein as other grassroots, crowdfunding applications such as Kickstarter and RocketHub, is a new donation website that's focused on assisting musicians and providing them with alternative means to fund their creative projects.
As well, they are positioning themselves as a way for fans to pay artists for music that they have obtained for free. The founders of the company state that while this is their first incarnation, as a crowdfunding app, they are open to evolution of the site as the needs and wishes of artists change. From the payments to the artist, garnered from their fans, IOUmusic takes a 10% cut.
Two Alternatives
According to Maria Popova at Brain Pickings, "Kickstarter charges a flat fee of 5%, but also passes along the Amazon Payments transactional fees (3%–5%) to the artists who use the platform, for a total fee anywhere between 8% and 10%. RocketHub charges a flat total fee of 8%." Thus, depending on your goals, there are the fees to consider, but sometimes one site just feels better than the other.
(via IndieMusicTech)
Given the 5 figure sums that most projects wish to raise from crowd sourcing, and the size of the percentages taken by crowd sourcing platforms, I can’t see why I would not make the effort to just run my crowd sourcing campaign from my own website and keep the several thousand dollars in fees for myself.
I agree that it may make more sense just to raise money on your own.
Here would be the possible reasons to use a fan-funding site:
1. They have a money-gathering system set up.
2. Increased visibility from their site traffic and whatever promotion they contribute to your project.
3. Gatekeepers, if they operate like Kickstarter and only let a few projects through.
However:
1. Most successful fan-funding projects tend to start with the artist’s own network, so if you don’t have one you won’t do all that well on a fan-funding site either.
2. You’re still going to have to do most of the work on your own anyway. You’ll need to think up your offerings. You’ll need to mail them out. You’ll need to write up or videotape any on-going updates to generate interest in your project. So the fan-funding site really just serves as another media outlet, and you may find you can approach lots of media outlets on your own anyway.
Hey Sam,
While I agree in full with you, I see it as another case of a band having only a MySpace instead of a site of their own and for now at least it just won’t happen for most artists.
Having run a jam space for 5+ years now and meeting literally thousands of bands, I can safely say most bands would never make the effort to set up such a service on their own. Some may add PayPal but beyond that, I would be surprised.
Not all bands mind you. Jill Sobule and Mae are two examples I found researching my plans that show artists can do it themselves quite successfully (Suzanne’s points are valid for what it takes to make it work though whether you use a site like ours or DIY).
Outside a PayPal solution, it involved a fair bit of work to get set-up. Some of what it took us to get approved to process credit cards in two currencies:
* credit and criminal checks on the owners
* secure, working demo to be approved
* 13 pages = just the pages that had to be signed and returned, not the full contracts and not the initial application to apply
* start to finish to be approved = couple of months (could have been quicker)
Add in design and development costs and the time required…it might just be easier to use a third party.
I was already day dreaming about the site when Radiohead released “In Rainbows” and part of my drive was why can’t the bands I work with have access to options like that for releasing their music.
In some ways I want to model our development on Cash Music but from the for profit angle vs. their not-for profit take on things.
I hope in time we can show a mix of tools and services for artists (both paid and free/open source) that will justify us getting a cut of anything. And that artists will happily accept us taking, knowing part of that keeps funding new options and other work on their behalf.
all the best,
Rob
I agree with Rob on all his points and can attest to the fact that most creative people in the media space that are looking to raise funds will not take the time to set up the things that are required, as the cost of doing so outweighs the fee paid to the already set up platform.
I run The Biracy Project, a crowdfunding engine that monetizes fans for telling more fans to get involved. We found that given this incentive, people will take some extra time to spread the word of your project. As much as you may think its all about altruism…its not.
The media business whether its film, music, or video games is about connections, raising capital, paying for good talent to support your endeavor, and marketing the end product. Its a business of moving units…just like coffee or mattresses.
The single biggest issue right now is that no one is investing larger sums of money into projects that require best in class talent to complete them as the end product has no way mitigating the risk for the investor.
The idea of crowdfunding is still in its infancy and what we are seeing are a lot of low budget projects that are now being accepted as the norm. We saw this same movement in the early 90’s when everyone became a graphic designer with the emergence of Adobe products. It drove the quality down for a few years as people thought that graphic designers were 10 bucks an hour and lived in a basement. People got tired of the bad design and started to suck it up and pay for quality again as they realized that design was not done by just having some software.
This is very visible right now in the film and music world. People with garage band are now recording studios and people with video cameras are now film producers. At a conference 10 years ago Spike Lee said “just because you have a video camera, doesn’t make you a filmmaker…you’re just a guy with a video camera.”
People will tire of this type of fare and the content glut that needs to be sifted through to find what they want. When they do demand content of quality again, that content will need to be paid for. As long as you can steal it the investors will not risk it so the answer will have to come from somewhere else, and this is where I see crowdfunding coming of age. The platforms will act like market makers and litmus tests for the crowd to determine whether or not the pitch before them is worthy of being made.
Just my 2 cents.
Good Luck with all your projects!
The first thing IOUMusic needs to do to give this the slightest chance of success is making sure visitors can BROWSE! #fail