Another Company Helping Musicians Finance Their Albums

from the enabling-the-business-model dept

Whenever we talk about business models involving scarce and infinite goods, a few folks show up repeatedly in the comments claiming that the only scarce goods musicians can sell are t-shirts or concert tickets -- and then go on to complain that this will never work for musicians who don't want to tour. Of course, that's incorrect. Even before we had explained the whole economics behind scarce and infinite goods, we had pointed out another important scarce good from musicians: the ability to create new music. There's no reason why musicians can't focus on getting people to fund the creation of a new album.

In fact, we've pointed to plenty of musicians doing exactly that, from Marrillion to Jill Sobule to Maria Schneider (who won a Grammy with her album produced this way) -- these musicians have all had fans pay for the creation of a new album, often giving them certain extras for helping to fund the album. This way, the musicians make the money they need (they set the "goal" and once it's raised, they go and record the album). Unlike sitting around and hoping for royalties that never seem to show up, they get plenty of money, and the fans get the music. While not all the artists then adopt this second part of the model, if they then give away that music for free, it helps attract more new fans to create the next album -- which, if there are enough new fans, can be done at a higher cumulative price.

This is a perfect example of business model that involves paying for scarcity, with the scarcity being the musician's time and creative efforts. And the good news is that more companies are showing up to help musicians use such a business model. We'd already covered ArtistShare, which has been around for a while, and which helped Maria Schneider producer her album via this method, and now there's apparently a new entrant called BandStocks that seems to offer a similar model.

Of course, BandStocks doesn't seem to really embrace the second part of the model. The benefits to those who prepay are that they get a share of the profits from the later sale of the album -- meaning that there's still a focus on trying to sell the album. It will be interesting to watch, but models that still ultimately rely on selling the music by itself are going to come under increasing business model pressure, especially as others embrace models that don't focus so much on selling the music, but on using it to sell other scarce goods.

Filed Under: albums, business models, economics, music industry, pre-finance
Companies: artistshare, bandstock