This post by Allison Mooney originally appeared in PSFK.com
Microfunding is emerging as a compelling alternative to big banking. Popularized by Kiva and other philanthropic institutions, we’ve also seen the model applied to creative pursuits with sites like Society6 and Kickstarter.
A new site called Microfundo aims to bring this model to music. Calling themselves “Kiva.org for musicians,” their mission is
“to support the entrepreneurial activities of independent musicians from developing countries around the world — championing undiscovered musicians who would otherwise not have the means to develop their music careers.”
Microfundo takes it concept directly from the traditional banking model–artists receive the full amount of their microfunding campaign’s goal, and Microfundo sells their music as downloads online as an advance against the loan amount. Microfundo will repay the full loan amount to fans plus will sell an additional 30% of the loan amount to cover their costs.
Their idea is based on the theory that, to become the next major-label star, an artist need only find 1,000 true fans - defined by Kevin Kelly of Wired as those who will buy everything produced by the artist. Helping artists build relationships with their “True Fans” is Microfundo’s real goal.
But they recognize that getting your 1,000 True Fans is hard given the fragmentation of the music industry. They want to centralize self-promotion, creating the same kind of efficiencies that Henry Ford did for car manufacturing (a comparison they make on their site.) They adhere to the thinking of Bruce Warila, at Music Think Tank, who said:
“Genres are coastlines, niches within genres are beachfront properties, and standalone artists are rocks or grains of sand. Sticking with the metaphor: coastlines and beachfront properties are compelling, interesting and entertaining; rocks and sand are things that get stuck in your shorts and sandals. Moving forward, trusted entertainment channel providers - filters that can continuously find great songs for a niche - will have access to music fans as surely as consumers desire to gain access to the beach; alternatively, attempts by standalone artists to ‘manage’ relationships with fans will be as welcome as sand in a sandwich.”
With this in mind, the site’s big idea is “channels” to facilitate discovery–if you like one Brazilian band, odds are you’d like another.
Discovery and curation are certainly massive needs for musicians, and largely why the record labels still exist. But this seems to be a trend that’s not slowing down. Recently, artist Jill Sobule bypassed her label and went straight to her fans for financing. Similarly, Amie Street, Popcuts and Sellaband all let you invest in music you think will do well and discover likeminded music.
Will services like this help to democratize this process? Perhaps a more interesting question: Does this whole concept equate creative endeavors with charities? Or is this just the new patronage model?
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