Crowdfunding vinyl record production

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An idea occurred to me a few weeks ago and it has been stirring in the back of my head for a while. Let me explain.

I recently watched a friend go through the process of producing a vinyl record, a great little electronic music compilation with some very nice tracks from people he knows as well as internet friends.

Now, why would he produce it as vinyl? He has been running a record label from some years now, and done a few CD and digital releases. Life is hard for an independent label; especially when starting out and with little funding, it is necessary to do things like print your own stickers and stick them on CDRs manually. Nonetheless, he has persisted in his goal of promoting his own music and that of his friends and producers who he respects, and cutting vinyl is still the ultimate expression of that deep appreciation.

This first experience of putting the compilation on vinyl was a bit of an experiment in how to go through the process, with the hope of doing it more in the future. Obviously these days, digital music is king, but some people really do still enjoy having an engraved piece of plastic. It gives a sense of tangibility to music ownership.

However, having witnessed this process of getting tracks mastered, printed, and distributed, I saw that it is difficult, with too many steps, and too expensive. Vinyl is clearly having a tough time these days, but knowing that there are people like me out there who prefer it as a medium, I couldn't help but feel that the industry might see some benefit to a streamlining of the vinyl production process.

In a way it feels a bit ironic that vinyl is expensive to put out, and quite a gamble for record label owners, because the vinyl printing process was designed explicitly to make reproduction cheap and feasible for mass distribution–this hasn't changed, it's just that digital distribution has taken over because it's even cheaper and easier. We are constantly comparing relative to vinyl's glory days, but if you look at it in an absolute sense, there is still lots of money being spent on vinyl annually. There is still a large interest for vinyl–it's just that it's not as large as it used to be. This means labels often won't take the risk and go to the effort of vinyl production, which is sad for people who wish they could buy their favorite tracks on wax but simply cannot because only a digital version exists.

I can't get over the feeling that if some barriers to entry in the vinyl market could be removed, there might be an uptick in interest. One of these barriers, probably the major one, is the financial risk that labels have to take in producing a vinyl record. However, the internet has enabled new funding models, sometimes called “crowdfunding,” the prime example being Kickstarter, which allows people to buy things that don't exist yet, in order to fund their development. Another great example is Threadless, who allow people to vote on their favorite T-Shirt designs, and the most popular ones will get printed and sold.

It struck me that some combination of these crownfunding ideas could be a great enabler for vinyl production. Labels could sell their tracks ahead of time, ensuring that the funding for producing vinyl is covered. Meanwhile, buyers could put a bet on their favorite tracks and be assured that no money will exchange hands unless the vinyl gets printed. Perhaps some sort of voting system like with Threadless could be used–fans could vote on the tracks they'd like to buy on vinyl, with each vote being an actual pledge to buy. When a certain threshold is reached, money exchanges hands and the label produces the record and sends it out to everyone. It's win-win: if the track is popular enough to break even, the vinyl gets produced, otherwise no one loses any money.

The led to a second thought, that maybe the vinyl production could even be outsourced to whatever agency takes care of this voting process, i.e. something closer to Threadless than Kickstarter. Labels upload their artists tracks and people “buy” them, and if enough purchases are made, the service takes care of printing the record and sending it out. Label owners would no longer have to worry about the full production pipeline. (Obviously a problem here is quality control–label owners like to hear test pressings before giving the okay on production, but perhaps this could be worked into the process.) Naturally, you could even leave out labels, and have artists directly upload their tracks to this service.

In any case, I did a quick Google search for “kickstarter vinyl” and found that some artists and labels are already taking this kind of initiative. Here's the results of my simple search:

On this initial finding, it's clear that more projects are successful than failing. It's also clear that there's a wide variety of pricing models at work. Many of these Kickstarter projects have other prices for digital releases or CDs. Some also offer extras for those who pay more.

One thing I noticed is that they are all a) bands I've never heard of, b) bands. There seems to be no culture yet for doing this kind of thing for electronic music. It's surprising to me, because if you look at sites like Bandcamp and Soundcloud, there is a lot of interest in making and selling electronic music, and despite the rise in digital DJ'ing, I believe vinyl is still very popular in the electronic music community. So I would like to see a company like Bandcamp or Soundcloud get on board with this kind of funding model, because I'm honestly curious to see if it could work.

Here's an article I found on music funding on Kickstarter. The author points out that the majority of funded projects on Kickstarter are music-related, which is quite amazing. He also points out that they are not the most costly–that award goes to film funding. It's amazing to me and encouraging to learn that Kickstarter is used so much to fund art projects.

The sample above is not very scientific, it's just a list of a few hits on Google. I was curious to expand this to a more statistical analysis. I wrote a little Python script to scrape results from a search on Kickstarter, and there were 81 results for the terms “vinyl music.” I removed the first few because their funding periods were unfinished.

Of the remaining 76 projects, 64% were 100% funded or more. To the right is a graphical overview.

An interesting trend seems to be that most projects that were not completely funded were funded very, very poorly. Fully 90% of failed projects had less than 1% of their desired funding. My guess is that these projects did not have good marketing. No question, in such a crowdfunding model, marketing will not be obsolete–it will be of utmost importance. So any site that wants to pursue this model will have to allow a good amount of customization and give a sense of “propriety” to the uploader, so that they can market their work how they like. I think Bandcamp does a good job of this, certainly better than Soundcloud or even digital music stores like Beatport.

The overall distribution of percentages of funding goals, seen in the histogram, is quite clear.

You can see that most projects got just over 100%, but those that fail, fail hard. In other words, the positive view on this is that it seems like if you can get some buzz going around your release, you are quite likely to make your target. Those that achieved less than 1% of their target had no chance at all, so this should be motivating for at least an initial marketing push. Many projects even got 200% of their target, and a few much more.

I was curious whether there was any pattern in numbers that might be different for failed projects, but it seems to not be the case. The average goal for failed projects is about $500 higher, however the median is approximately the same. A sorted plot of funding goals for successes and failures is given in the figure to the right.

To my eyes, there is an overall lower demand in the failed cases, however the average is actually higher, so likely this is not really a significant difference. The median funding goal is $2000, which to my knowledge is approximately the cost of releasing a 12”.

As for how many people are backing each project, the numbers are lower than I expected. The box-and-whiskers plot below shows that the median number of backers is only about 50, while almost all projects are backed by less than 200 people. This means that people are individually willing to pay more for vinyl than I expected. I am not sure how this will translate to electronic music, since DJ's tend to collect a lot of vinyl and therefore don't want to pay $25/record; with band music the vinyl tends to be more a collector's or audiophile item, whereas for dance DJ's they are simply tools of the trade.

I do wonder what the trade-offs will be for charging less for records. Certainly it doesn't cost $25 a pop for producing a 7”, but the question is whether lowering the price will actually get you more backers. If they are willing to pay this much, it may be worth keeping the price relatively high, since there is no guarantee you will make more money by charging only $10. Maybe it is because you can get to your goal more quickly by charging more, especially if your music is not well-known. I find this unfortunate, since the idea of crowdfunding, in my view, should enable lower prices, but I'm not convinced that it's the case.

Unfortunately in this automatic data collection I was unable to include the price charged for the vinyl, since each page uses different language and price categories to describe the item you are purchasing. I would have liked to give a plot of number of backers vs. vinyl price–maybe some other time. But as I said, I expect this to be a bit different for the electronic crowd anyways.

In any case, I am not sure there is much to draw from these numbers but it does seem like with a bit of marketing push, crowdfunding is a possibility for vinyl. People get to buy their favorite music, musicians and label owners get to ensure at least breaking even.

Whether this can be a successful model for underground electronic music is something to be seen. I think there tends to be a very "long tail" in that category, which could have the effect of spreading out the funding too much; so, for example, a label shouldn't try throwing up their entire digital catalog to make it available for vinyl funding. Crowdfunding really needs a concentrated burst of funding into particular “bins” to make anything possible at all, so this might have an effect of encouraging very popular tracks to get pressed but leaving many lesser-known artists in the dust. Perhaps some kind of service along the lines of We are Hunted that uses interesting methods of digging up lesser-known artists to mix into the search results could be beneficial.

I hope someone tries to make such a service targeted for electronic music, because I'm genuinely curious to see how well it would work, and heck, I'd be a client. I don't know if I have the time or knowledge to do it myself however, so I hope some company like Bandcamp reads this and considers the idea.

Update: Apparently there is a crowdfunding service specific to music, which I hadn't heard of, called PledgeMusic. I have been told that Christian Vogel published a vinyl record this way. Looks like PledgeMusic may be exactly what I have been talking about here:

PledgeMusic is based upon a simple idea. Instead of an artist or group investing their own money up front on recording and mixing, based on the vagueness of possibly recouping those costs from sales, this model tries to raise the money upfront, over a 60 day timeframe. Funds are pledged by fans, friends and family in return for exclusives such as signed vinyls, previews, even backstage passes, exclusive concerts, or whatever the artist wants to offer! In my case, there's also Renoise XRNS files of the album tracks up for grabs.

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