Crowd-Sourcing & The Music Industry

Crowd-sourcing has become an increasingly popular option in the music industry. Whether its artists forging a closer connection with their fan base, or radio stations going above and beyond the traditional request lines, the advent of social media and the Internet have made fan connectivity a must. Websites such as Kickstarter and Pledge Music and radio services like Jelli are being used to bring music fans into the fold in unique ways. We talk to musicians Ben Folds & Amanda Palmer, Jelli CEO Michael Dougherty and author/DJ James VanOsdol about the increasingly popular applications of fan involvement.

By Joey Odorisio

Crowd-sourcing has become an increasingly popular option in the music industry. Whether its artists forging a closer connection with their fan base, or radio stations going above and beyond the traditional request lines, the advent of social media and the Internet have made fan connectivity a must. Websites such as Kickstarter and Pledge Music and radio services like Jelli are being used to bring music fans into the fold in unique ways.

Crowd-sourcing is traditionally thought of as the outsourcing of tasks to a larger group. In the music world, this concept has recently been applied by artists whose biggest fans have contributed financially or artistically to their newest projects. Musicians Ben Folds and Amanda Palmer made their names via the major labels, but for their latest albums, both have used crowd-sourcing websites to help fund the releases, albeit in different ways.
Chicago radio veteran James VanOsdol used Kickstarter to fund his upcoming book about the history of Chicago Modern Rocker Q101. VanOsdol was a longtime DJ at the station (which famously flipped formats in 2011 after being sold to Merlin Media) and currently hosts a podcast as part of the Steve Dahl Network. Additionally, user-controlled crowd-sourcing music services such asJelli (which we spotlighted in a 2010 eQB feature) have continued to build its footprint at radio stations around the country.
Amanda Palmer released two studio albums as one half of the “Cabaret Punk” duo The Dresden Dolls, and made headlines earlier this year by raising almost $1.2 million on Kickstarter for her new solo record Theatre Is Evil. Palmer has always been hands-on with her fan base, famously signing autographs for hours after concerts and staying in constant contact via Twitter. After finishing the recording of Theatre Is Evil, Palmer used Kickstarter to offer a wide variety of pre-order options to her devoted fans, ranging from just a $1 for a digital download to high-end private concerts.
After releasing her first solo album in 2008 with a major label, Palmer proceeded to research the marketplace to get a feel for how things were developing and decided to go on her own. She says that move gave her the freedom to work more directly with her fans. Palmer said, “I could have signed with another label or I could try going direct to fans. I spent a good year looking around and watching the evolving landscape and doing little test runs with the fan base to see if I was capable of running my own business.” These test runs included an EP of Radiohead covers released only digitally and on vinyl, as well as a few other smaller-scale records, as a way of trial and error in selling directly to her fans.
She says the Radiohead covers record “was a lot more strategic than people thought. I wanted to put out a project that was going to be fun and cool and that I could take risks with, but if it failed, it wasn’t gonna break my heart. I didn’t do a publicity campaign, market it or put it in the stores. I literally did nothing. I sent an email to my mailing list and posted about it on my blog. I stood back and just wanted to know what my fans would do, if they were willing to simply throw their credit card into my PayPal.” Palmer says there was an immediate reaction, then sales dropped off, but “mostly I was measuring my fan base and seeing who was out there.”

Jelli CEO Michael Dougherty says that people who aren’t familiar with the concept of crowd-sourcing “shouldn’t underestimate the desire of people to contribute to things they care about. [This desire] can lead to also wanting to make an imprint in some way and also feeling like they’re part of a community around them.” He continues, “In the context of radio, it pulls people together around a radio station where they feel like they can contribute to something they care about and a brand they connect with. They feel part of a community they helped shape. I think that’s a super powerful component of crowd-sourcing.”
Dougherty notes that radio listeners making requests and forming a community around their local stations is nothing new, but “by providing the ability for the listeners to participate, it strengthens that bond with the brand and amplifies the notion of participating and being part of something. I think that’s really strong. It really enhances that notion of community with the radio Station.

Piano Rock group Ben Folds Five reunited in 2008 for a one-off charity show, but earlier this year the trio of Folds, Robert Sledge and Darren Jessee announced they would be releasing their first album since 1999, The Sound Of The Life Of The Mind. The band used Pledge Music to offer pre-orders directly to their fans, and like Palmer, also sold a variety of different packages and options.
Folds emphasizes that “We don’t know what the f*** we’re doing. The whole landscape is evolving and I’m not particularly interested in being a revolutionary about this, to tell you the truth. The industry’s changing and you have to find a way to do things that suit you at that moment. You have to look at how you can take advantage of the chaos. Right now for us, the way we can take advantage of the chaos is that we didn’t really want to have a plan. We wanted to go into the studio and not have to commit to finishing the record, or releasing the record on any kind of schedule or even at all. And the only way to do that is to pay for it ourselves.”
“The idea came up [that] we could pay for this by pre-selling it and this crowd-sourcing method seems to be good. Plus crowd-sourcing was going to get a certain amount of press, because it’s new. So it generated its own interest while involving fans.”
Folds takes a more practical approach to crowd-sourcing, saying. “I don’t think it’s that different. Crowd-sourcing is still part of a system that pretty much by design remains fairly stable, which is: You have to pay for a record, you have to manufacture it and you have to get it into people’s hands, then you have to pay for more records. Then you have to pay for promotion in order to get it into people’s hands again. What people misunderstand about Kickstarter (and the name of Kickstarter is brilliant) is that it’s a kick start, that’s it. It’s not a record company. It’s not taking the place of the record companies. We started our own record company (ImAVeePee) after we did the pledge campaign, and now we have distribution with Sony so we’re in bed with Sony, we’re not revolutionary. We’re just doing it a little bit differently because that’s what the times call for.”
Many Kickstarter users offer different bonus options and content for larger pledges and purposes. Palmer sold vinyl packages, autographed art books, tickets to special Kickstarter-only events and more. Ben Folds Five also sold vinyl records, along with autographed lyrics sheets, t-shirts and even offered to re-record the vocals to their single “Do It Anyway” with lyrics about the pledger.
Folds says, “We priced it up really high, and this may sound like weird logic, but I’ve seen über-fans who are college age, shell out a thousand dollars for something that I wish they wouldn’t because they don’t have the money. I made this weird, subjective decision to price that one up enough where only established people could afford it, because I was going to be really not happy if some college kid had spent a thousand dollars of the money they didn’t have in order to have their name in a song. We tried to actually out-price, over price that [option]. I almost went to $3,000 simply because that would assure that the college kid who didn’t have the money would be paying that amount for it. As it turns out, it was couples and they’re older and more established, they can make that decision. They have the money and so it’s okay.”

For the funding of his book, Smells Like Rock Radio: The Oral History Of Q101, James VanOsdol raided his collection of rare CDs and autographed memorabilia. He also offered “two different pledge levels where if people wanted to write a 250 or 500 word essay about Q101, for a certain dollar amount they could be writers in this book, which to me was the perfect way to play up the whole nature of the community supporting this project concept. So there’s an entire section in the back of the book of what are essentially listener essays.”
Palmer says that “the hidden story of my Kickstarter that nobody’s picking up on” is a series of fan-organized house parties she sold. She did a test run of house shows in Australia last year, where fans would pay to have her play a backyard BBQ the day after she played a theater gig. “I’m doing 40 shows next year for $5,000 each that were organized and promoted by my fans. In each city, one fan stepped up and said, ‘I’m gonna be the leader for this show, I’m gonna get 50 people to split the cost and we’re all gonna meet at my house.’ They put a $5,000 check directly in my bank account. None of that money is going to promoters, agents, security, insurance, rental fees… With a $5,000 guarantee to play a show in any city, I would probably be taking home $500. But this way I’m taking home all of the money directly. They are paying to hang out with me, granted in a really stripped down environment. There is no band, no lightshow, but it’s really fun. It’s really possible thanks to the Internet. It wouldn’t have been possible for these specific people to find each other 10 years ago.”
Jelli’s Dougherty agrees, noting that at Dance/CHR KYLI, it’s a 24/7 Jelli-branded station in Las Vegas, “an amazing community” formed around a station “that was really started from scratch, didn’t have a brand and was a different format altogether before we launched.” Now it has “pulled together a bunch of people with like-minded interests around the music and you act as their home station. In fact, they probably view this as more than a station, they view it as a community, and [the listeners] started to develop some community group pages on Facebook on their own. They created a group called ‘The Jelli Fam’ and it was a way they could connect with each other on Facebook and go out together. They started having bowling nights. You give people a chance for something they like and to connect with other people associated with it and some really cool things can start happening.”
Folds says that “The Pledge Music crowd-sourcing gives you the direct connection with the fans that are the closest. In our case they really are the closest because we didn’t go to the press with this. We announced everything we were doing over my Twitter at midnight, and so if you found us and you supported the record through a pledge you’re pretty much our closest friend. I know some big fans who didn’t know we’re putting out a record yet. We didn’t go full-tilt with this.”
VanOsdol says crowd-sourcing was the only way he could publish his book about Q101. “There’s a lot of expense, things people don’t even consider, from publishing and designing the book, to having it professionally edited and formatted. There’s so much involved…the legal concerns, having an attorney to give it the once over. There’s a lot of expense that I just couldn’t fund so in order to do it and do it right, I needed to turn to crowd-sourcing. There is a legitimate community out there that can support a project and are hungry for a project, and it is nice to have them as investors.”
Folds agrees that crowd-sourcing is helping to fund the costs involved in creating art. He says that artists are using crowd-sourcing to help fund higher-caliber packaging and art partially because the record labels are not paying for it anymore. He said, “There is a development of the music business that people haven’t really considered and don’t know about: as the record labels have stopped being able to take risks they used to take, the artists are taking those on. So artists have been funding their own records, and have been funding their artwork and tours. If you get nice packaging with your vinyl, that came right out of the pocket of the artist. They didn’t make their money back; no one made their money. If you buy a Sufjan Stevens record with gorgeous packaging and the vinyl is gorgeous, I can tell you who paid for that: Mr. Stevens paid for that, and not the label.”
He continues, “Nowadays, what’s happening is the artist is now sharing that burden with their fans, who are willing to pay because they want to know that their artists made a new record and they can be in on it. So, really kind of what’s happening is that the fans and the artists are getting together sharing this responsibility and everyone gets something for it.”
Despite the headlines about raising over a million dollars via Kickstarter, Palmer says the money is essentially all gone. She says if she’d made her album a digital-only release, not marketed it and played a short stripped down tour, she could’ve kept the money. “But I wouldn’t have made $1.2 million dollars if all I was offering people was a digital download of a solo piano record. I really wanted to offer people something huge and special that was going to take a lot of time and energy. So I’ve spent a lot of time working on the artwork, the stage show and the videos. The whole thing has been a huge, vast undertaking but my fan base knows me and they know where my priorities are. And I think they’ve learned that the energy they put into me they’re always gonna get back.”
She continues, “The money is already spent or earmarked on marketing and promoting the record and going to radio and really beautiful videos. We’ve made four relatively high budget short film videos that cost a lot of money to make. We’re building a complicated and unique stage show, with lights and a crew. All of that costs money so that’s what all of that budget has gone in to.” (In May, Palmer blogged an estimated breakdown of how the Kickstarter money would be spent, which you can find here.
VanOsdol says the experience has taught him that “everything we’d once held to be true about physical media is f***ed. There is a means and a way for people to create art without having to go through the meat grinders of record companies and traditional publishers. People can do things and do them right completely independent and it’s a really inspiring realization.”

[eQB Content By Joey Odorisio]