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Reggie Calloway
Reggie Calloway
5X Grammy nominated founder and leader of "Midnight Star" and "Calloway" leading the groups to international success writing, producing a string of top mega hits which include, " Operator", "No Parking On The Dance Floor" and "Freak-a-zoid" and "I Wanna Be Rich". Also ,"Casanova", "Love Overboard"
 

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Posted in Arts / Music / Songwriting

The New Music Business: Funding Your Project

May 31, 2011 7:27 pm
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In the New Music Business we have gone from six major labelsto just four, which are mostly or wholly owned by overseas parent companies.The executives continue to play musical chairs as they try to find the answers while being moved around like pieces on a game board. If you don’t fall into the category of major artist distributed by a major label you may well be faced with the task of funding, recording and releasing your own project. That is if you have the stomach and the funding to get this accomplished.

There are in fact many established and up-start artists that have some how managed to record there own album, both inexpensively and with some level of quality. This is highly due to the digital age that allows you to record your album in your living room, then do your own artwork or have it done inexpensively by someone else and even improve the sound quality with mastering without going to the major mastering houses. Now you are ready to go, or so you think.

What you didn’t consider was how you were going to get your music heard and sold. The digital distribution outlets like iTunes, Amazon and Cdbaby have taken out much of the cost of duplication and product placement but you are still faced with the problem of letting people know who you are and that you have music for sale. Social sites like Facebook, MySpace and YouTube have been effective from a grass roots basis to build and connect with your growing fan base. Still for mature and specific genre artists who don’t fall into the youth market, that is hungry for new music, you may be left out in the cold. Marketing and promotion are still the answer for this unending obstacle. As music industry veteran, Hank Caldwell ha soften told me, “it does not have to take a lot of money, but it does take some. There are discounts available but few to no freebies”.

Now, more than ever, there are companies to help you raise funds for your project. The obvious need is for recording and production cost, but as we just discussed, there is also a large cost for marketing and promotion which include radio promotion, website development and maintenance, publicity, advertising, legal, small staff, promotional event, video, shipping and the list goes on and on. You have to be sure to plan for these areas in your budget projections because Aunt Sony, Uncle Universal, Cousin EMI and old friend Warner most likely will not be there until they see a significant profit in sight. The burden falls on you for your dream projects to be seen, heard and become profitable.

In recent years new companies are springing up to help, by taking an old concept of fan funding and making it a whole lot easier. These companies seem to fall into three basic categories. The first being gifting or pledging funds which can be rewarded by special perks like autographed CD, free downloads or whatever gift a band may want to give. This is done at different levels with higher value rewards to match the size of the gift. Kickstarter.com, which started two years ago, is showing great progress. They state that $13,094,547 has been raised for music projects from 591,773 backers. Kickstarter.com also asserts that many of their backers support multiple projects. Other companies in this category include Artistshare.com and Slicethepie.com. The later gives freebies in return for fans reviewing tracks and then moving the highest rated bands on to showcase where support money can be gifted. These bands are monitored very strictly to make sure the project is completed after goal funding is reached.

The second category is represented by companies like Sellaband.com, which allows the fans to give gifts called buying parts in return for not only freebies, but also sometimes share in the profits. The profit sharing lasts for a period of five years. These fans are called Believers. Like many companies, Sellaband charges a transaction fee and receives a percentage of the money they raise for the band.

The third category is a hybrid of both these concepts with a twist. SongVest.com, best known for raising funds by auctioning off pieces royalty streams at several times its annual value allowing the seller to cash in now and still continue to receive royalties on the remaining portions. The buyer receives their share of the royalty for life. Recently seeing further needs of its clients and fan base, the pledge or gifting system was added giving fans a chance to get involved at any price range they wanted and get a variety of special perks from their favorite artists as mentioned above. Fan funding is not only rewarded with gifts, concert tickets, backstage passes, even executive producer credits, but the joy and pride of participating and making a difference for artists so that more of their music can be heard. These funds can be used to create new projects, market projects in progress and include music, film, theatre, books and a variety of causes where a fan base can be reached.

I am very excited about The New Music Business. The chains are off and creativity reins supreme. There is nothing we cannot create and get to the market. No is not an answer and failure is not an option. We make our own way and our dreams and plans are our guide. We make our own measurement of success. Be excited and let’s get our projects funded.

 
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