NY Times Trashes Crowdfunding Without Looking At A Single Big Success Story

from the the-plural-of-anecdotes-isn't-data dept

At this point, we’ve seen tons of stories of “crowdfunding” bands. More get submitted pretty much every day. We’ve seen bands raise a few thousand dollars this way, and we’ve seen bands raise tens of thousands of dollars this way. So it seems a bit bizarre to read the following NY Times’ article by Randall Stross, where he takes a look at a very small number of crowdfunding stories and concludes that bands can’t make money that way.

Fan financing of music seems best suited to exceedingly small projects. While it is cheering to see the success stories at Kickstarter and other sites, it is dismaying to see just how modest are the goals of the most successful.

Support that is enough for full-time pursuit of music is still nowhere in sight. Gas money for Austin may turn out to be about good as it gets.

Hmm. Jill Sobule raised over $80,000 in less than two months. That seems like more than gas money. Ellis Paul raised over $100,000. That seems like more than gas money. It’s not clear exactly how much Josh Freese was able to get from his experiment, but it was clearly over $30,000 from reports that were given. Marillion has been surviving on crowdfunding for over a decade.

Sure, plenty of the artists who are using this model are small time and aren’t getting very much. But to claim that it can’t support the full-time pursuit of music is provably false. By the very same methodology used by Stross, you could conclude that selling albums was not enough for the full-time pursuit of music. That’s because most bands who have created albums never made much more than gas money to Austin. But some made millions. And yet, back in the 60’s, 70’s and 80’s, I’d bet the NY Times wasn’t writing stories claiming that “making an album isn’t enough for full-time pursuit of music.”

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Comments on “NY Times Trashes Crowdfunding Without Looking At A Single Big Success Story”

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Anonymous Coward says:

exceptions prove rules, or so they say. most of the successes got their money from a few wealthy patrons not $10 at a time. it would be impressive if they got $1 from 100,000 people rather than 20k from 5 people. that is just seed money like any other business. crowdsourcing is just a hip modern way to say it.

Big_Mike (profile) says:

Re: Re: Re: Re:

Good point, Mp3’s are not great quality, they are convenient quality. Where is the sound file that is made for quality and does not care what the size is. Make a site that sells music in that form and charge more. Supply the sit with both the new file and MP3 files and let the customer chose what they want. The money is out there waiting to buy what people want, you just have to realize that it is up to you to produce what they want in order for you to get their money.

greg.fenton (profile) says:

Re: Re:

Companies don’t IPO until they’ve had a bunch of early successes. To get those successes, they need initial funding. It is WAY easier to get funding from a few large investments rather than from many smaller ones.

Yes, as the artist gets to be known (has some successes) it would be better for them to widen their take. But why not take $1 for 100,000 while also taking $20k from 5?

As I’m starting out, I just need the money so I can focus on getting those successes. The successes will scale my audience up way faster than the benefit of a wider investment group.

Richard (profile) says:

The hidden assumption

is that success in the future has to look like success looked in the past. Three points come to mind

1) We don’t need multi-millionaire megastars to have good music.

2) Most good music is written by part time composers who have day jobs. Gustav Holst springs to mind and there are many many others.

3) A lot of the greatest music ever written was written by those magnificent composers “Anon” and “Trad” – in other words it was crowdsourced.

Anonymous Coward says:

Works great for all kinds of things (not just recording artists). A radio station (basically one talk radio host) raised $500k in less than 24 hours to keep Seattle’s 4th of july fireworks celebration going after the main sponsor dropped out.


So instead of one megalithic corporation funding it this year, it became “crowd sourced” to dozens of small businesses who saw value in contributing to this tradition. It got to a point that so many small business were contributing that the big businesses pretty much decided they had to get into the act or look like miserly bastards.

If people see value in the endeavor, they will contribute.

bdhoro says:

Statistics anyone?

Another problem with numbers getting into the wrong hands! The fact is MOST musicians don’t make much more than gas money. That has always been the case and always will be the case.

Music is a tough business where a select few out of an extremely large pool make a boatload of money while everyone else is fighting for gas money.

This statistical fact does not fit well with human intuition and psychology. People see high profile musicians and believe thats the norm, or at least that there’s better odds to become the next Jay-Z by entering the music industry, than winning the lottery but its not. When considering your chances to do well in the music industry one must add all the Jay-Z’s of the world with every other attempted musician ever and divide by the total in order to see how the average musician makes out (and that number probably comes out to pennies).

But – just because MOST musicians don’t make money that doesn’t mean nobody will make money. On the contrary it means a few will likely become extremely rich. It is a statistical trap – you can look at the average musician and say there is no money to be made or you can look at a select few and say there’s millions to be made.

Anonymous Coward says:

Re: Statistics anyone?

Music is a tough business where a select few out of an extremely large pool make a boatload of money while everyone else is fighting for gas money.

But where are the massive successes with these new business models? The Rolling Stones and Beatles of the new models are raising at the very low six figure range (or less) through crowdfunding. I think the best example I’ve seen on this site is a guy that pulled in $1M in a year. So we’re moving toward a world where the most successful musicians can pull down almost what a middle manager at a big company makes, only with orders of magnitude greater risk and higher expenses.


Chris Ruen (user link) says:

Mike M – I wrote a long response to you in that jaron lanier comment section which I don’t believe you saw. Here’s part of it as it relates to this post, and some of the examples you like to use to “prove” the existence of new, successful music models (http://www.techdirt.com/articles/20091119/1634117011.shtml%22).

The big issue here is that the commodity system, albeit an intellectualized form of it in the digital age, is the most efficient, convenient and appropriate means of compensating artists for their work. It’s also a statement of value for music, art and expression rather than a statement of value for empty wine bottles, per your Amanda Palmer example. So while we search and search for new models that have relatively few examples of success, models that in large part haven’t worked, the commodity system sits there waiting to be rediscovered.

I cast my lot in with trying to make that system work BETTER for artists and fans with an increase in record deal transparency (so fans have some understanding of how much money is going to the artist) and reduced cost for digital albums. Ideally, distribution costs could be trimmed as well. That, to me, delivers on the promise of the internet as a tool to democratize and expand creative culture rather than devolve it back to some warped version of the early 20th century.

Mike, you wrote, “Uh, wow. I present evidence that proves you wrong, and you don’t have a single response other than that you don’t find it convincing? Really?”

You have a fantasy for “proving” things. Providing a few examples may support your theory of where music is headed/should head. But that’s not proof of anything, it’s support, tenuous at best. I’ll respond more specifically here but generally I think you’re the victim of hopelessly delusional, wishful thinking. I venture to guess you’d say the same for me.

Reznor – As you note, the success of his Ghosts experiment is due in large part to the following he enjoys as a result of the huge promotional and supportive advantages of a major label. The idea that emerging artists who are building their fan base alone can duplicate this success I find disingenuous or willfully ignorant on your part. Do you think Reznor set all of that up himself, or do you think he paid someone else do do it while he focused on making music?

The Josh Freese example – You know Mike, we may be coming from opposite ends of the argument here, but this sounds to me like an expression of desperation, born of the fact that fans can no longer be trusted to compensate artists for the music they love. What’s next, will artists begin offering blowjobs in exchange for a $10 album “pledge?” This may have “worked” for Josh, but I think that’s highly questionable. Musicians, if they resonate with fans, ought to be compensated for their MUSIC, not for giving Disneyland tours. Jesus. Follow this to its logical conclusion and the musician is suddenly doing everything BUT actually making music. The record label/commodity model earns its efficiency from the fact that the ART is being supported by the fan, thus encouraging more ART to be made in the future. The record label, at least a good one, supports this goal and aids in the necessary marketing and promotion work that Josh obviously wants no real part in. From a blog post of his…

“Things started to get extra hectic with the unfolding of all my wacky responsibilities I had with making good on the stuff I’d sold on my web-site. You know all those nutty “packages” that tied into my record SINCE 1972? Yeah…all that stuff. I was having lunches, floating in sensory deprivation tanks, giving drum lessons, giving tours of Disneyland, writing songs/making videos about people, letting strangers take clothes out of my closet, giving haircuts, etc…

“It really consumed me for a long time and got to be a bit much but just when I started to think “this is getting out of hand and why the hell am I doing this” I’d quickly remind myself that it was ME that got ME into this damn mess and that it’s actually a pretty cool job and worth all the hype and free publicity that I got while releasing my record (which was the whole point of it!)”

I wish Josh the very best, but I ask you to question these examples, how many of these have been “successful” due to novelty and how many appear to actually be sustainable.

Jill Sobule – I find this very, very disheartening. You think she wanted some wealthy stranger singing on her album? Really? Out of respect for art, do you think that inclusion further manifested Sobule’s vision or dilluted it? Again, follow this to it’s logical conclusion and it ain’t pretty. By the way, I’m waiting for the monumentally successful album that’s funded on this sort of subscription model. Maybe there’s one I’m unaware of?

Corey Smith – That’s awesome. Good for him. You do have to admit, this sounds like a local phenomenon, though – not exactly fulfilling the global promise of the internet, but immensely successful. This example, unfortunately, is very isolated.

Amanda Palmer – Some of your examples are inspiring and show how determined, plucky artists can find their way and I think that’s fantastic. But I’m looking at the big picture. Palmer’s example has always smacked of desperation to me. On your note about royalties, she hasn’t earned royalties because she hasn’t earned back her advance. And perhaps if her fans were making the point to compensate her for the recordings Warner invested in rather than paying her for empty wine bottles, she’d not only have royalties to speak of, but a sign that Warner’s investment in her was well-founded, which I imagine would translate to a future deal with better terms. Also, it’s HIGHLY unlikely that the Twitter experiment would have been at all successful if not for the promotion she earned from said record deal. That’s something you ought to acknowledge.

You should read my most recent essay on this whole mess if you haven’t. (http://www.tinymixtapes.com/features/2009-fuck-love-let8217s-make-dystopia) And I’m curious to hear what you think.

Take care Mike and congrats on the site’s success,

Mike Masnick (profile) says:

Re: Re:


Don’t know what to tell you. You don’t like what’s happening, fine. Doesn’t mean it’s not happening. You want people to pay directly for the music, but the economics suggests that’s unlikely. This is not about what I want to happen, it’s about what is happening.

As for your “debunking” it’s difficult to take it seriously when you say that no one else could do what Reznor did… but then have to spend your time debunking why all those artists did. Sheesh.

People like you want to pick a part each example and explain why they’re exceptions. At some point, you’ll realize that they’re the rule.

What’s worse, I find your attempts to get into the minds of some of these artists as your “debunking” insanely insulting and obnoxious. At least with the artists in this list who I have come to know, you are dead wrong on every one. Jill Sobule was *thrilled* to have someone sing on her album. Amanda Palmer is not “desperate” in anyway.

The problem is that YOU personally don’t like these models. No offense, but tough shit. The world doesn’t care whether or not Chris likes these business models. It cares about basic economics. The musicians in question who I know and have talked to all found these models to be both successful and fun — earning a lot more money than previous efforts under the “old” system.

That you don’t like it… well… that’s something for you to deal with, but hardly damns the models.

Finally, “I’m waiting for the monumentally successful album that’s funded on this sort of subscription model,” sets up the wrong metric. Album sales *don’t matter* — which is the whole point. Yet you want to judge the success of a different type of model on something that has nothing to do with its success? Hal Ritson (another musician who has used these models successfully) said recently: the new business model is you do a whole bunch of stuff, and at the end of the day you say ‘am I profitable’? Hal is. As are most of the artists above.

I’m sorry that you don’t like it, but it’s reality.

Anonymous Coward says:

Re: Re: Techdirt Brand Snake Oil May Cause Nausea, Blurred Vision, and Diarrhea

People like you want to pick a part each example and explain why they’re exceptions. At some point, you’ll realize that they’re the rule.

Judging by the minuscule number of (modest, at best) “exceptions” proffered, re-proffered, and re-re-proffered here on a seemingly infinite broken record loop, we are no where NEAR reaching that point…

Jill Sobule was *thrilled* to have someone sing on her album.

Do you really believe that? Really? I don’t deny she may have said exactly that, perhaps even with a straight face, but do you really believe it?

At least a couple of your favorite examples have already publicly expressed doubts regarding this new business model they’ve chosen, the inane things they’ve been forced to put up with, and the incredible amount of time it takes away from their actual talents.

Finally, “I’m waiting for the monumentally successful album that’s funded on this sort of subscription model,” sets up the wrong metric. Album sales *don’t matter* — which is the whole point.

Fine. I’ll rephrase for him. Where are all the monumentally successful people who have built up their personal brands using your subscription and/or ancillary gizmo-n-gimmicks model?

Where is your web 2.0 Spielberg?
Where are your web 2.0 Beatles?
Where is your web 2.0 Madonna?
Where is your web 2.0 Stephen King?

Are we still using the “wrong metric” or do you contend that successes such as these are just around the digital corner?

I mean, one of your favorite catchphrases seems to be “Artists are making more money than ever!” but who are they really making more money than? Certainly not the aforementioned names or their respective peers, certainly none of your examples come anywhere near the top creative echelons of yesterday and today, nor even the mid-listers a few rungs down. Not even close.

Get rid of the big label ex patriots and what do you have left? Half a handful. And somehow these same few, trotted out, day after day, into the baking Techdirt spotlight have become the rule rather than the exception? Please.

Josh Freece? Jill Sobule? Amanda Palmer? Corey Smith? Ellis Paul? THESE are your best examples? How many can honestly say they had even heard of these people before first hearing about their pride-swallowing feats of new-age gimmickry?

Just how low are we lowering the bar here? Just how long are we supposed to faithfully contend that this obvious devolution is somehow “progress” when all you have to show for your many theories is a handful of relative nobodies and a bunch of cat videos on youtube?

As the other anon so succinctly put it:

“So we’re moving toward a world where the most successful musicians can pull down almost what a middle manager at a big company makes, only with orders of magnitude greater risk and higher expenses.”

And that pretty much says it all.

Your golden revolution is long overdue. The prophecy has not panned out. Like every other pie in the sky fantasy, it remains a siren song cooed in chorus by various geek lecturers and consultants who are (surprise!) all trying to sell you something.

At what point do you realize you’ve taken your rightful place alongside the rapturite nutjobs with their mantras and their plyboard signs?

Your gizmos-n-gimmicks “solution” is inherently inefficient and convoluted, rife with obvious opportunity costs and your paltry examples to the contrary do little to light the way. I’m sorry you don’t like it, but THAT’S reality.

As usual, John Updike said it best:

“Has the electronic revolution pushed us so far down the path of celebrity as a summum bonum that an author’s works, be they one volume or 50, serve primarily as his or her ticket to the lecture platform, or, since even that is somewhat hierarchical and aloof, a series of one-on-one orgies of personal access? This is, as I read it, a pretty grisly scenario.”

Chris Ruen says:

Re: Re: Mike M's shadow complex

Very much agree with Anonymous Coward 1:41. Great points.

Mike, you accuse me of too large a personal/emotional investment in my arguments, and that may or may not be true. But it’s obvious that you’re bringing a heavy dose of emotion and belief into this as well. You need to ask yourself where your desire to promote these new models really comes from. Your charges that I “don’t like” certain models or “want” certain things to be true can just as easily (rather, more easily) be leveled against you.

As a music journalist, I used to be neutral on this debate. I bought my own music, but didn’t preach to anyone on piracy issues. I figured the technology would “figure things out” one way or another. This was a passive approach on my part, but I didn’t know any better. Later on, I looked around at the successful musicians I personally knew in Brooklyn living in shittier apartments than me (and I was broke and unsuccessful as a writer – no trust fund for this guy), then noticed that very few of my friends paid for their music (or took the opportunity to go to shows) it became obvious that a warped artist-fan culture had been created by the piracy (what I call Freeloading) debate. There are more fans than ever, yet musicians can’t count on their support. And through licensing and branding (see Mountain Dew’s new “label” Green Label Sounds) desperate musicians are increasingly accepting support from corporate institutions now that fans are so unwilling to pay for the music they love. This is a problem, whether you see it or not Mike.

By the way, your handful of examples of “success,” paired against a multi-billion dollar music industry of record labels and sales is nowhere near establishing “the rule.” The “old” system, troubled as it is, is by far the dominant reality, yes, REALITY, of the music industry and how artists make money and gain exposure. I know you have a blind spot for this, but I ask you to reconsider, because it weakens the rest of your arguments/opinions and I do think you should be involved in this debate – obviously you’re intelligent, care about it, have thought about it a great deal.

By the way, I talk to artists about this stuff, so my “getting in their heads” about it isn’t so “insane” or “obnoxious.” The creative process requires time, energy and autonomy and some of your favorite examples function to erode these elements.

One of your quotes: “You want people to pay directly for the music, but the economics suggests that’s unlikely. This is not about what I want to happen, it’s about what is happening.”

First, this appears to be very much about what you want to happen. Second, I’ve seen changes in consumption behavior first hand from friends and also many readers (including teenagers) who have written me about their own altered behavior in purchasing music after considering my arguments. So I have hope. The Freeloading ideology (epitomized best by the Pirate Bay jokers) is paper thin and I think most people understand that Free Content doesn’t add up to much. The key is providing consumers simple ways to negotiate their place amidst an admittedly murky issue. If you provide reasonable people with reasonable arguments, I believe many will reasonably change their behavior as a result. Whether it’s “unlikely” is beside the point – that’s hopelessness and nihilism talking. This is about understanding what’s right. I say this out of my love for music and respect for those who create it, there’s my emotional investment. What’s yours, Mike?

What DO you want to happen? I’m curious and I think you owe it to yourself to understand that basic motivation. Why be a passive slave to the whims of technology when you can use it as a tool to actively improve the world?

Hope you read that article I linked if you haven’t already.

Suzanne Lainson (profile) says:

Re: Re: Re: Mike M's shadow complex

I’ve watched the changing in the music business as in affects unsigned artists and it has cost them money. Selling CDs was a great business for artists who ran DIY businesses and sold their CDs directly to fans. All the arguments against major labels never were an issue for them in the first place, but they are being hit by the same dynamics that are affecting anyone selling CDs. Fans now expect to get recorded music for free. I won’t bother to argue about the rightness or wrongness about that since I think it has become the norm.

So now artists have to find something else to sell. But that means taking some of their attention away from making music and putting it into selling other stuff. Some have suggested that the artists/bands themselves don’t have to do that; they can find someone else to help them. But to find a marketer and/or manager to do that work, they either have to sign a deal giving up a percentage of those sales or they have to find someone willing to do the work for free. And if the “other stuff” means selling lunch dates, meets-and-greets, chats, etc., there is a time demand that the artists have to fulfill, even if someone else is doing the marketing.

It’s a different business model now. Some artists/bands will be able to make enough to quit their day jobs. Most won’t. Of course, the counter argument is that most musicians have never been able to quit their day jobs. Which is true. In other words, the new world of music hasn’t really allowed more people to make a living at this than before. A lot more people get to feel like musicians because they can record and upload songs and create web pages. But the economics, allowing bands and artists to generate enough to have a living wage, hasn’t change much. In fact, it’s actually harder now because technology has eliminated some of the gigs that used to involve paid musicians (e.g., bar gigs, weddings, frat parties) which now may use karaoke or DJs instead of bands. Also, it was noted that at SXSW there were more solo artists using laptops. It makes sense financially, because it is cheaper to travel as a solo than as a band, but that means fewer jobs for band members.

What I have been suggesting is that technology will allow everyone to make music (some of it better than others, of course), so we’ll all be music creators to some degree or another. The music income pie will be divided among many more people, which means the average per musician will go down. As a society, it probably is a good thing that so many of us can create music. But from the perspective of individual artists who see less money coming in from music, it will feel like a bad thing.

Chris Ruen (user link) says:

Re: Re: Re:2 Mike M's shadow complex

Really appreciate your thoughts and observations on this, Suzanne, and I think you’re demonstrating the valued role of a knowledgeable, cool observer. Very interesting note about the increase in laptops/decrease in live musicians, by the way.

One of my main angles is that the “other stuff” bands have to sell will mostly be their own brand, in the form of corporate sponsorship and corporate patronage. This is a prime irony of Freeloading, that by opting out of the commercial understanding of music bought by consumers, Freeloaders are building a cultural space where artists must submit to an even more commercial understanding of their art and of themselves via this type of branding. This has always been a part of music, but in the past some idealistic, stubborn bands were able to choose to operate outside that system. Such a choice seems very old world today, where the notion of “selling out” is the norm, even for indie bands in the garage/punk tradition. I think this is a sad development with looming implications for our cultural diversity, both now in the future.

We ultimately make most decisions based on self-interest. One of my goals as a writer is to to try to link up the consumer who is used to getting his or her content for free (usually illegally) with the concept that paying/compensating the artist is just as much in the self-interest of the consumer who loves music as it is in the interest of the artist and the artist’s partner/label, because it gives that artist the support in their development and ability to make more music (for said consumer to enjoy), and supports a label that can invest in similarly great and worthy artists (also for the consumer to enjoy).

Anonymous Coward says:

Wikileaks is crowdfunded.

“We have raised just over $370,000 for this year (our yearly budget is around $600,000.). “


People are perfectly willing to voluntarily fund investigative journalism and even medical R&D, PROVIDED they see a source that actually produces something good for humanity and freely gives it away. But that’s key, it can’t be these pharmaceutical corporations that insist on having monopolies on all the trash they do produce.

Hephaestus (profile) says:

Who in the hell is bell and why is she shaped so weird?

“But if the Beatles had a profile page on MySpace today, theyd be only one in a million no, one in about 13 million. This is the boggling number of music profiles now on the site worldwide”

This is a very big problem for the music labels. As the labels profits drop, and they slowly fail from smallest to largest label some real gems are beginning to showing up. This problem is caused by the Bell Curve and normal distrubution (warning disturbing math content … grin) and the increase in the use of remixing software. Like photography the cost to create high quality music content has fallen and will continue to do so. Like photography you are going to see more people doing quality music for grins and giggles. The crowdfunding of music will accelerate this trend, so will cloud based computing as the tools to set up music collaboration sites become easier to use and cheaper. Think of it as an evolution towards a sourceforge for music, with funding available, studio time, remixing services (free and professional), and business contacts.

nnn note-entry) Interesting thought sourceforge for music.

Suzanne Lainson (profile) says:

Blood is for sale, too.

Gang of Four Sells Vials of Blood to Fans to Fund Album”: “[Gang of Four] really went off the deep end with their reward for fans ?45 — along with a book showing ‘ceramic tiles depicting the last 40 years of world history’ created by band members and ‘a book of drawings of our emotions,’ 500 ‘Ultimate Content Cans’ will contain vials of blood….

Let’s hope GoF meet their funding goals before they start selling toenail clippings and old retainers, too.”

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