Concert funding is tough. Can crowdfunding fix it?
Holding your own show and watching your fans have the time of their lives enjoying your music is one of the best experiences for a musician. If shows could organize themselves, most artists would hold them every week. But organizing a concert is a risky endeavour, which is why a lot of up and coming musicians only hold shows a few times a year, if that.
Let’s dive into the process of concert organization, look at the challenges artists face, and discuss concert crowdfunding as a way for artists to hold more gigs with less risk — is it really the solution we’ve all been looking for or are there critical flaws in the model that render it unusable (at all or in the long run)?
How concerts get organized. The traditional way.
Traditionally, organizing a concert is a high-risk endeavour with a lot of upfront investment on the part of the organizer and little to no guarantee the event will be successful. UK’s biggest competition for unsigned acts Open Mic UK lists the following stages for concert organization:
- Plan your budget
- Hire a venue
- Book artists (for concert promoters)
- Sell tickets
The problem with this conventional model is the fact that the first three stages require hefty investment: venue, concert staff, rented equipment, on- and offline event promotion, as well as artists are, at least partially, prepaid. Meanwhile, the profits are expected only in the final stage of the process — ticket sales — and are in no way guaranteed.
If at any step of event preparation or execution something goes wrong, all investment is lost. Moreover, many concert organizers struggle to break even:
“There tends to be some real misunderstanding of how much money up and coming musicians can make at their shows. Often, they get a cut of the door after the venue and promoter expenses, which may be very, very little or nothing at all,” shares music industry expert and columnist Heather McDonald in her article on the music industry problems for The Balance.
This conclusion lines up with the International Federation of the Phonographic industry representing the recording industry worldwide since 1933 (IFPI) stats that says about 70% of live revenue is earned by 5% of the acts, as per Forbes. Less known performers face a high risk of losing money on gigs.
While concert promoters can earn a lot off a successful event, they also lose money often enough. Concert promoter Piotr Gaczkowski shares his experience getting started in the business in his Medium post:
“We had a string of losses, but <…> we kept on going, making sure we learned as much as possible from every slip-up. In the end, we managed to promote one leg of a concert tour. <…> proceeds from that tour event covered our previous losses.”
But while money is a crucial gatekeeper in the live show industry, it’s not the only one.
Ticket sales are controlled by the ticketing platforms who have a monopoly on concertgoer databases — and they charge additional fees for distributing tickets. About 20% of the ticket’s face value can go towards the ticketing platform fee, as per Vox.
This risk-filled model resulted in the need for alternative funding models for concerts. Wouldn’t it be easier if you could just take the money directly from your fans during the initial planning phase and throw a concert using those funds?
With the technical solutions available online, crowdfunding an event became an attractive solution for many. It allows artists to put on more shows and connect with their fans more often, share their art and receive immediate feedback, as well as pre-assess the demand for shows during the preparation phase and meet the preferences of their fans by putting on themed shows or events in specific cities that fans invite them to.
What is concert crowdfunding, exactly?
One solution to losing money on concerts and touring is pre-selling your events. This means fans basically pre-order your show and you have a good idea of the demand and returns you stand to get from any given event.
Sounds like a low-risk solution, but how do you implement it? You’ve got a few options:
- fundraising
- crowdinvesting
- concert crowdfunding
Each model is different, and here is how.
Fundraising means finding wealthy investors (sponsors, labels, concert promoters) to back your event. It can also be grassroots — raising money from smaller contributors via direct contributions, which can be solicited via email or other forms of online campaigning.
Fundraising is mostly focused on larger donors, making it time-consuming to reach and negotiate with them. It can take months or years to find donors for your events.
Some of the smaller online tools offer an innovative concept of crowdinvesting. It turns concert organization into a venture. Potential investors don’t need to be interested in the event taking place at all. All they do is calculate projected costs, their potential return on investment and estimate interest in the show. The model is profit-oriented, with tickets to your event being just a side perk.
One more point to consider with crowdinvesting is risk. If an event is cancelled, all investors get refunds, but if an event takes place but isn’t profitable, an investor risks losing a chunk of their invested money.
Concert crowdfunding is based on pre-selling to your show to interested fans at the very first stage of concert preparation (unlike the traditional model where that is the very last step).
If the show raises the money, it’s greenlighted and all fans get their tickets automatically. If an event does not raise enough money, the gig won’t be held and all contributions will be automatically refunded.
The key difference between the three is the motivation behind contributions:
- fundraising is mostly about image and prestige
- crowdinvesting is about profiting off an event
- concert crowdfunding is about making a fun show happen
Since all three options require approximately the same amount of promoting efforts and commitment from the artists and management, concert crowdfunding seems like the most viable one. You don’t need to spend a year locking down one donor, and the price
Let’s look at some of the concert crowdfunding tools available online.
Tools to crowdfund concerts
Here are some of the more popular tools we found in our online research of concert crowdfunding (alphabetically):
- Bandcamp
- Indiegogo
- Kickstarter
- Patreon
- Reverbnation
- Show4me
Here’s an at-a-glance comparison:
As we can see, popular crowdfunding platforms like Indiegogo and Kickstarter offer a limited set of tools that help effortlessly raise funds directly from your fans but lack tools specific to the music industry and concerts and shows in particular.
When setting up a campaign on either of the two, you can:
- offer several types of tickets (general, VIP, with merch, extra perks)
- limit the total number of tickets in each category
- run campaigns that last between 1 and 60 days
- access campaign analytics
When it comes to increasing the chances of your project getting fully funded, the popularity of the services seems to be of little help either — only 37% of Kickstarter campaigns reach their funding goal.
Another drawback to using general-purpose crowdfunding platforms is their lack of industry-specific tools — these crowdfunding platforms only offer the basic tools for raising funds. To crowdfund a concert on these platforms, you’ll need to manually fill all the gaps: prepare and send out tickets, enforce age restriction or look for a ticket scanner. This means using and managing additional tools and accounts with various services.
Plus, on Indiegogo and Kickstarter your show will get sandwiched between crowdfunding an extra secure phone holder or a cool pain relief gadget.
Professional concert crowdfunding
In our evaluation above, Show4me comes out a clear leader in terms of tools for concert crowdfunding. The platform offers a convenient concert crowdfunding campaign builder that helps you cover all aspects of crowdfunding your upcoming show. Unlike music crowdfunding, crowdfunding a concert requires more tools and better planning.
Let’s take a closer look at all the tools that set it apart.
Key benefits
People call Show4me a Facebook for the music community as artists and fans can interact, discuss upcoming concerts and share inspiration and experiences, but Show4me actually started out as a toolset for organizing concerts and the social component was added on with the latest update.
The integration of crowdfunding a show and its organization with artist-fan interaction within Show4me is achieved through this key functionality:
- launching your concert crowdfunding campaign without a set date (you only set an estimated date)
- 3 types of shows available for artists — start small and work your way to bigger events as your fanbase grows
- social interaction functionality to keep fans engaged between events — to help crowdfund increasingly larger shows
- pre-selling tickets for your show without a set date
- 40% discount for early ticket buyers, with full-price tickets being sold after your event raises minimum funding amount to guarantee its viability
Now, let’s walk through setting up a concert crowdfunding campaign in Show4me step by step and study additional tools for making your campaign smooth and professional.
Setting up your campaign
Being industry-specific, Show4me right off the bat offers show types for your to select from:
- intimate
- private events
- shows
With these three event types, you can start small with intimate events of 10+ people and move up to large showsof 1,000+. Private events are only available to Premium members of a musician’s Artist club (subscription is $1/year for all artist’s music and exclusive content) or via a code. That might come in handy for events like a secret album preview party for a limited group of fans and friends.
Other useful features are:
- possible campaign duration is between 7 and 150 days
- setting age restriction (e.g. if you are playing a gig at a pub)
- scheduling campaign launch at a later date
- listing sponsors
Nifty budget calculator can save the day even if you are not that good with numbers — the system just won’t let you save a project if your numbers don’t add up:
Running your campaign
Once your campaign is all set-up and ready to roll, you’ll need to let your fans know they have a chance to pre-order your show. You’ll need to learn how to promote a concert from scratch or apply the skills you already have from putting up your earlier shows.
Either way, promoting your concert requires continued fan engagement, and one way to secure it is channeling your fans’ excitement about your upcoming show into becoming members of your Artist club?
Once you post all about your campaign on your best social media, you can actually engage your fans on your concert crowdfunding platform as well (Show4me, that is:)). This means fans will keep discussing the event with you AND have a place to stay and hang around even after your show is held.
You retain all your fanbase and have a much easier time concert crowdfunding the next time around! Since you can sell concert tickets on Show4me, functionality that allows you to build your fanbase there amplifies the effort you put into promoting one show to help promote your next one, making concert production process that much easier as your fanbase grows.
Show4me Artist club is where you post updates about your art, music, inspiration and the upcoming concert that you are crowdfunding for, as well as poll your fans about show details, like the playlist, video playback, title, etc.
Artist club membership has a fully free option as well as full $1/year membership (to listen to music that you set as member-only), so it won’t break most fans’ bank.
Dealing with extra profit
What happens if your minimum show threshold is met? On Show4me, you sell more tickets! You have raised enough money to cover organizational costs, and you get extra profit selling your tickets.Once the minimum funding amount for your show is reached, ticket prices automatically increase by 40%. This ensures more revenue for the artist without any extra work or planning, while your most dedicated fans get their tickets at a notably discounted initial price.
Ticketing
Finally, your concert is funded! Yay! What’s next?
Time to deliver tickets. This is where industry-specific tools in Show4me will save you a ton of time. You don’t need to compile an email database, design tickets for each price point and send them out to each group of fans manually.
Once your event reaches the Confirmation point, your fans get access to automatically generated professionally designed tickets that they can access in their Show4me account, print out or save on their phone:
To scan them at your concert using just an iPhone or an Android phone, download Show4me ticket reader app tReader (yes, it’s fully free).
The app will send attendee data to your Show4me profile so that you could track all your connected devices, check-ins and stats on your show audience, down to the number of late check-ins, average age and gender distribution.
Added layer of financial security
Show4me uses a secure payment system that transfers crowdfunded money directly on the artists’ accounts. Show4me does not have access to the money contributed by the fans to any show that’s being crowdfunded on the platform. This adds an additional layer of security, guaranteeing that all funds go directly to the artist or manager running the campaign.
Final thoughts
Unless you are Jay Z or Drake, you are probably still learning how to market your music and struggle to put each concert together. Concert crowdfunding can make it possible to host more concerts and face little to no risk.
If you opt to use the right online service to crowdfund your concert and put enough effort into engaging with your fans during your crowdfunding campaign and stay in touch with fans after your crowdfunding campaign ends, not only will you successfully fund your next gig, you’ll create a solid fanbase for your next crowdfunding endeavour — be it a private event, a smaller show, an album release or a huge concert.
Show4me is a free-to-use platform for artists and fans to interact, share and discuss music, inspiration and create a community around art. Musicians and bands get the tools for music monetization, like selling music, Artist club fan subscription and concert and album crowdfunding, while fans get direct access to their beloved creators.
