As streaming is becoming a dominant source of revenue for the music industry, musicians aren’t reaping all the benefits – streaming service payouts aren’t particularly generous, and when you count in the fees of agents, managers, labels, distributors and the like, musicians themselves aren’t exactly rolling in dollar bills.
This is why touring becomes an important revenue stream for musicians. More, a band’s live performance has the most monetary potential as the chunk of money they earn per show tends to be highest of all other streams, like streaming royalties or merch sales.
But to earn more on shows, concert promoters have to hike up ticket prices to be able to pay out artists’ guarantees. Average ticket price at the world’s top 100 shows in 2019 is over $92. But not all bands and musicians can afford to set ticket prices that high. Is there an alternative way to target your audience more precisely and be sure all tickets sell before you invest in producing a show that might not bring in any profit?
Here’s how concert crowdfunding can become a supplementary, if not alternative, source of show funding and guarantee fair rewards to the team working on a show.
Let’s explore the traditional ticket sales model for concert setup and then see how concert crowdfunding overcomes some of the old model’s shortcomings.
Putting on your concert via traditional ticket sales
For a touring and internationally-recognized brand, the booking process goes through the respective booking representative link. This person is responsible for the planning and execution of the said live performance events.
Once the general concert configuration is settled, it’s up to the local promoter to establish ticket sales and make the concert known to the fans targeted by the specific event. The promoter uses a combination of traditional and digital marketing practices to inform the local fans and maximize the reach of the event’s promotion.
To measure how many fans are attending a concert, the promoter relies on ticket pre-sales, usually using ticket selling apps and websites that can provide a relatively concrete information regarding the reach and the success of the performed promotional work.
This is the classic concert promotion method. It has a few downsides.
First, the promoter takes a risk to bring an artist into their town. They are investing own money into concert organization and promotion, without being sure how much profit (if at all) they’ll be able to make off the event. If the concert sells well (ideally, sells out), then the promoter will be able to afford the act’s guarantee, while making a profit. Everyone wins.
However, this isn’t always the case.
To ensure the promoter doesn’t lose money, they may increase the ticket price well above their bare minimum (hence the ticket price incremental hike we mentioned in the intro above). This, in turn, might result in a lower amount of audience and, overall, lower revenue.
If not enough tickets are sold in advance, relying only on fans buying tickets at the door is not always a good strategy. Low presales can actually indicate that an event has a good chance of failure.
Some promoters rely on at-the-door sales more than others. When doing so, it’s crucial to have a good understanding of how Facebook invite RSVP rates correlate with actual turnout.
Another significant flaw of the traditional concert organization model is lack of access to audience data when selling tickets via ticketing services.
Normally, a concert promoter or concert organizer would divide available tickets into quotas and distribute them between several ticketing platforms.
The upside here is that ticketing platforms have own subscriber databases where they can advertise events to regular concertgoers in the area. The downside is that neither concert promoter, nor artists’ teams have an idea of who their audience is or their contact information for any future communication or event follow-ups.
Crowdfunding-based concert organization model
Crowdfunding is a model that allows fans to directly contribute to concert production – they pre-order tickets to an event that has not yet gone into production. This way, artists (or concert promoters) get enough funding to cover show production and promotion without having to worry about selling enough tickets after they invest own money.
Essentially, concert crowdfunding boils down to fans pre-ordering a concert from their favorite artist. If enough people buy a ticket to the planned event (with an open date and only preliminary location/venue), the show goes on into production. If not enough tickets are pre-sold, the fans have their contributions fully refunded.
We’d say there are many options to crowdfund a concert, show, gig or festival for musicians and their teams, but the matter of fact is, there is only one concert-specific crowdfunding solution out there. It’s the toolset provided by Show4me Music Interaction Network.
Sure, one can use general-purpose crowdfunding platforms, like Kickstarter or Indiegogo, used to source money for curiosity projects, like soundproof wireless earbuds or brass-and-steel mechanical puzzle.
These platforms were designed to meet the needs of one-off crowdfunded events and don’t blend that smoothly with concert crowdfunding, especially when it comes to producing and distributing tickets. See our full comparison of general-purpose crowdfunding platforms and Show4me professional concert crowdfunding tools for more insights on the topic.
Not only does concert crowdfunding provide a failsafe for unsuccessful events (by pre-selling tickets before a show goes into production), but it also leaves the organizers (be it the artist or band themselves, their teams or a concert promoter) with full access to concertgoer generalized data, down to the time they’ve arrived to the venue.
This can help a team understand their target audience that much better, prepare the right merch, and keep all the contact information for future use.
Music fans will do what they can to see their favorite artist. That said, they do have budget caps when it comes to ticket purchases, and with travel and accommodation driving up the cost, might not always be able to afford expensive tickets. This is where crowdfunding comes in. Promoters and acts aren’t taking as big of a risk. Artists can lower their guarantees and promoters can lower the ticket prices.
Crowdfunding also makes the promotion process easy. Since fans are already investing in the brand and the tour, they stay up to date with the band’s touring schedule. In Show4me, that means joining the artists’ Artist club (for a free or Premium, $1/year membership). By doing so, fans sign up for automatic updates about an artist’s activities showing up in their feeds.
Read all about setting up your Artist club in Show4me here.
Final thoughts on traditional concert organization vs concert crowdfunding
All in all, concert crowdfunding addresses key financial risks of the traditional model and offers if not an alternative, then at least a good supplementary model to put on additional shows within a tour or during lull periods when show attendance might be an especially risky bet, e.g. for experimental shows or festivals, VIP parties, shows in a region where the band or artist aren’t sure they have big enough following to sell tickets, etc.
Sounds exciting? Try out Show4me today! Sign up as a music professional here.