Should artists ask their fans to fund their music career?

As the music industry increasingly shifts away from its reliance on the major label system, many investors and artists are eyeing a new source of funding as an alternative to record deals: fans. 

In the last few years, fan funding has gotten more press and attention, with several high profile launches of fan driven funding platforms.  

These companies, some crypto and NFT based, others not, have been positioned as a better way for artists to fund their careers than restrictive major label deals. These crowdfunding models differ around the edges, but ultimately, all of them rely on fans to generate the capital needed to fund an artist’s next tour, album, or other creative project. Fans contribute to an artist’s funding and in return, are promised compensation tied to the success of the artist's creative project. That compensation typically involves shared revenues from IP ownership (publishing, masters, etc.), sometimes a “sweetener” of exclusive content or perks like VIP access, and often, the promise of selling the token or unit in the future at a profit to some other fan or investor.  

But just because fan funding is getting press and attention, does that mean it’s a good idea? For fans? For artists themselves?  

The short answer, and one I’ve learned from experience, is a very resounding “No.” I say this as a former employee of a fan funding platform. I once believed that fan funding could work, but I don’t anymore. 

Fan funding and crowdfunding is great in theory, and the “dream” of freeing artists from corporate entanglement is a noble one. But in reality, fan funding is almost always a terrible idea – for fans who often are disappointed and for artists themselves, who often find they can’t raise as much capital from fans as they had hoped than they want. Even those artists who are able to raise the money they need, that money comes with massive risks to the most valuable asset that an artist has: their relationship with their fans.  

Crowdfunding is nominally enticing on the surface. Independent artists want a funding option that allows them to remain autonomous, and some fans want to be rewarded for believing in an artist early on in their career. Other fans with casual retail investment experience may even want to try their hand at music investments. To many, particularly to the investing classes in Silicon Valley, fan funding seems like a perfect mix and method to revolutionize the music industry. But in reality, this funding method is only relevant to a very small number of artists.  

Most music fans aren’t rich tech bros with deep pockets. Many music fans don’t want to think about their favorite artists and songs as securities to be bought and sold, nor do they conflate culture and commerce as easily as the founders of these platforms would want to believe. Because of this, many artists just don’t have enough fans, with enough money, to fund their careers in the critical early stages when they need money the most.

Even more to the point, fan funding doesn’t truly provide the freedom to artists it claims, and, in fact, getting fans even more involved in an artist’s finances poses more risk to an artist’s autonomy and career than the record deals these models would like to eclipse.  

Adding stress to the precious artist-to-fan relationship  

I’ve spent my career working with artists in both an A&R and marketing capacity, and I’ve seen the effects of crowdfunding firsthand during my time at a high-profile funded fan-based funding platform. Ultimately, these funding partnerships create friction in the relationship between fan and artist. Here’s why: 

The artist-fan relationship is more precious than ever before. Ten or 20 years ago, fans used to consume music on a more focused basis – listening to a handful of artists in a single session and listening to more albums “end to end.” More fan focus meant that more fans were likely to be “superfans.” These fans were “all in” on the smaller number of artists that they were focused on and supported artists through buying physical music, merch, and concert tickets. 

Today, music consumption is fragmented across more artists and more songs. Deeper artist to fan relationships are rare in this fragmented market, with many listeners loving songs without really knowing or identifying with the artist.  

There are more artists than ever at each fan’s finger tips, forcing artists to compete for attention, and making the development of the enduring super fans relationships that will drive a sustainable career even more difficult. Artists have to create a constant flow of content and new music in order to stay relevant to those fans, and that may not be enough given the fragmentation created by the streaming services.  

The problem with asking your superfans for funding  

Despite the forces fragmenting the artist to fan relationship on the major streaming platforms, some fans of course, do establish that connection with the artist and become “superfans.”  

Superfans are incredibly dedicated to an artist, and even more valuable to an artist’s career. These are the fans that the funding platforms seek to tap in. These fervent fans foster vibrant communities that serves as a catalyst for an artist's rise to fame.   

But, more often than not, the nature that relationship isn’t centered around money. Injecting the expectation of a return in the middle may threaten the underlying connection between artist and fan. Superfans want something meaningful from an artist (i.e. content, connection, access), not a return on investment. If those fans want to spend money, it makes sense to sell them a product, not ask for money and then give them a financial return on top of that (and, what if the return is negative? Think about what that does for the artist to fan relationship!)   

Fan funding doesn’t just chip away at the sanctity of the fund your music often look desperate – to both fans and industry onlookers. Whatever the case, fan funding undermines the artist's brand. 

Another alternative to labels: Get funding from people aren't fans of your music 

Artists still have the ability to access the alternative funding, without the strings and sacrifice of ownership required in label deals, but without the unintended repercussions of allowing fans to your career.  

beatBread and other services provide unbundled financing, and beatBread’s Investor Network allows financial investors, who are interested in returns, not special fan treatment, to provide significant funding to artists.  

These investors make decisions not on fandom, or even how the music sounds, but on what the data tells them.  

In this relationship, there is no brand erosion and no brand risk associated with superfan investment pitches, and there are plenty of investors in the network have deep pockets, even for artists without a huge fan base, or a fanbase centered around Silicon Valley.  

That’s why I left the fan funding space, as promising as it seemed at first, and joined beatBread.  

The vision of providing a better alternative to major label funding is the right one, but the fan funding answer isn’t how that alternative will come into being. At beatBread we have a better product for investors, a better product for artists, and we give artists ownership and control without sullying the most precious and valuable thing an artist has – their relationship with fans.