What Bands & Kickstarter Fail to Understand About Crowdfunding

 

Kickstarter replaces record labels! Kickstarter is panhandling! Kickstarter is only for people without access to other resources!

The pervasive misunderstanding of the fundamental tenets of crowdfunding by campaign managers, campaign contributors, and the platform providers themselves will result in a decrease in the viability of crowdfunding campaigns. The confusion and negativity arising from debates rooted in a lack of clarity of platform policies has the potential to squelch what serves as the only option for funding certain types of projects. As a specific example, Kickstarter mischaracterizes its own function.

kickstarter-badge-fundedThere are two implicit implications of Kickstarter’s claims that “Project creators set a funding goal and deadline. If people like a project, they can pledge money to make it happen.”

1. Kickstarter campaigns are project based. There is a specific, objective, defined outcome of a campaign (an album, a movie, a product, etc).

2. The project WILL NOT happen if the funding goal is not met.

Most campaigns fail to meet at least one of these implied points. Many fail to meet both. This is causing crowdfunding burnout and crowdfunding backlash. I attribute the blame to all three involved parties: Kickstarter campaign managers, Kickstarter campaign contributors, and Kickstarter itself.

What Kickstarter Campaign Managers Fail To Understand…

1. Many campaign managers expect contributions from people unfamiliar with their work. In fact, creative campaigns receive funding from friends, family, and existing fan bases only.

2. Kickstarter fundraisers receive no money unless the campaign receives full funding. Many campaign managers state that this is a bad policy, but such claims imply that a project could be completed without full funding. Therefore, potential funders conclude that their money is not genuinely needed.

3. Campaign managers too often are not trying to raise funds to make a project possible, but simply to boost presales. Contributors find the thrill of making what otherwise seems impossible happen a compelling reason to contribute. Campaign managers will have to offer increasingly attractive exclusive and creative rewards.

4. Kickstarter is not a source of free money. Campaign rewards must have values commensurate with their levels. More and more campaigns are offering album downloads or other no-overhead items for levels as high as $25 or even $50. This is an insult to funders looking to be part of a project, particularly because these same “rewards” will certainly be available to the general public at a fraction of the cost after the project is completed. Contributors feel cheated when this happens.

What Kickstarter Campaign Contributors Fail To Understand

1. Contributors are only entitled to conclude that the campaign manager will work to complete the proposed project and will distribute promised goods or services at established reward levels. Contributors are not entitled to control how the campaign manager spends money.

2. Most music campaigns are simply album and tour presale campaigns. Consider Amanda Palmer’s campaign. If she had simply sold 30,000 records and booked a series of expensive house concerts, no one would even think to question where her profits went. Very appropriately, her campaign earnings covered the cost of the album as well as her career and personal living expenses. Effectively, the expectation was that most of the full life cycle of the album’s earnings came from sales attributed to that campaign. Kickstarter, however, misleads by claiming that campaigns are tied closely with the feasibility of the creation of specific projects and not with their full earning potential.

3. Kickstarter is not only last-resort money. Just because campaign managers have money in the bank does not mean that they should be obligated to spend that money before trying to raise external money to complete a project. Kickstarter is effectively a new platform for skipping gatekeepers. The argument that those who possess wealth should not be able to use Kickstarter is equivalent to the assertion that no one with money should receive an advance from a record label or publisher to create new work.

What Kickstarter Itself Fails To Understand…

Kickstarter has severely damaged its brand by not differentiating types of projects. Projects that are appealing to niche groups of contributors, but are otherwise impossible to fund are both the most artistically important projects and the most likely to be harmed by a lack of policy and mission consistency. In order to prevent ever-mounting frustration and confusion from dooming crowdfunding, providers like Kickstarter must create clear demarcations between simple creative work presales, otherwise unattainable creative projects, and testing-the-waters product sales. Without this differentiation, the number of users contributing to campaigns will decline sharply.

ABOUT THE AUTHOR

-Michael J. Epstein is a Boston-based artist, most notably with the bands The Motion Sick, Do Not Forsake Me Oh My Darling, Neutral Uke Hotel and The Michael J. Epstein Memorial Library.  Find him online at michaeljepstein.com.

Like this? Share this!

1 Comment

  1. Allen Slue

    July 18, 2013 at 8:25 pm

    Excellent resource here! My brother was talking about crowndfunding for his debut album. For artists looking to kickstart a kickstarting campaign, your last piece of advice is very helpful! Thank you!

Leave a Reply

Your email address will not be published. Required fields are marked *