The Skinny on Crowd Funding and Direct Payment options

By Mike Galaxy

There are many crowd or "Fan" funding choices these days for bands and musicians. Have you researched which one is best for you?

Getting money from the three F's (fans, friends and family) can be difficult especially if you are struggling at selling your music and merch in the first place. But what if you were to give them something in return for their investment? Many Crowd Funding services are useful when trying to gather funds to record a new album or prepare for a tour. 

One of the more successful Crowd Funding participants was Amanda Palmer formerly of the Dresden Dolls who raised an astonishing $1.2 million dollars using the Kickstarter funding platform earlier this year. But, don't get hopes up so quickly. Only about 50% of all campaigns reach their goal. (it should be noted that some funding platforms like IndieGogo and Pledge Music, allow you to adjust your target amount to reflect what you have earned effectively allowing you to hit your funding goal and bumping up those averages). 

When deciding on a funding campaign, there are many things to take into consideration. Platform reputation, ease-ability, and fee's. Digital Music News recently reported on this as well and posted the following fee's from some of the biggest of the Crowd Funding platforms.
Below are the fee's earned on campaigns. 

Kickstarter: 5% (plus 3-4% Amazon payment processing fee.)

PledgeMusic: 15% (this includes credit card transaction fee)

Indiegogo: 4% (or, if you don't make goal you keep the money and give 9%)

artistshare: 15%

Sellaband: 15%

Rockethub: between 4% and 12%

Other things to consider when deciding on a platform are (in some cases) the additional banking transaction fee's. Note that direct to Paypal fee's will run 3.5% to 4% on every transaction, and the fast growing Square App is earning 2.75% on transactions. As of September 2012, Paypal announced their competition to the little Square card reader offering a blue triangle credit card reader for your iPhone and only taking 2.7%. Even individual credit card companies are jumping on the "Band Wagon" preparing for their own versions of card readers and crowd funding options. Google, Visa and Mastercard have been testing Mobile Wallets using NFC or near field technology for a while now allowing users to pay for items with their cell phone and never having to swipe a card. All you need are two NFC capable phones. Transactions like this allow the payment to be deducted from a pre-paid account or charged to a bank account directly.


Hypebot.com reported this week about Brazilian based Queremos launching their own unique crowd funding campaign to help with booking shows and tours. Rather than funding an entire album or a tour, fans pool their money together for one show by selling refundable tickets in hopes of raising the minimum amount required to bring the artist to their city. In essence, the band and the fans co-promote the show together in order to ensure that the band makes it to the gig. This is particularly great for fans, as they get to now play the role of promoter by ensuring that word gets out about the show and that the target is reached in order to bring the artists to their town. Most of the promotion for the shows naturally occurs within social media according to Queremos. 

This concept is truly ideal for fans who wish to see a particular artist who wouldn’t typically plan a stop in their town, as artists and labels oftentimes skip hitting particular markets on tour due to an uncertain draw and would rather not risk taking a loss for the gig. However, if a show is successfully funded through Queremos, then artists are pretty much guaranteed the viability of the gig and can ensure that they will see the required figures in order to plan the stop.

This page will be updated frequently. If you have any additional information to share, send it to mgalaxy (at) bandpromote (dotcom). 

Excerpts credited to: www.DigitalMusicNews.com , www.Hypebot.com, 

Will Radio Royalties Save Music?

By Mike Galaxy

The US is one of the only  countries that has given radio a pass on paying mechanical royalties to bands and labels. To "Radios" defense, spins at stations with large audiences is damn good exposure for bands. Although radio is still a major source of artist discovery for many of American music fans, terrestrial listeners have dwindled with fans opting for more user friendly services like Pandora and Spotify. In the 80s we would fill our glove box up with cassettes, but these days your car can be filled with nearly limitless digital music. So why the need for radio...and commercials? There are still many Americans who prefer a DJ to dictate what's cool and what's not. There are still many Americans who like to listen to Rihanna, Bieber, Taylor Swift, Coldplay etc.. over and over and over to the point the listener is ready to kill it at the local Karaoke bar.

Ok, back to royalties. Radio has paid out performance publishing royalties for nearly 100 years since radio began pumping out Christmas Songs over the airwaves. Clear Channel has just inked a ground breaking deal with the country label Big Machine (Taylor Swift) (Distro Universal) to pay the label royalties every time their artists are played on all 850+ Clear Channel stations. FYI, Clear Channel controls the airwaves having AM, FM, Internet station iHeartRadio as well as 12 stations at satellite radio XM. Their annual earnings for 2011 were over $6 Billion...yes that's a "B". To give some perspective, that's about the same as General Motors entire revenue for 2011. Who says radio is dead? So yes, it's about time radio start sharing some of those profits with the very people that help them make their "Billion$". Frank Sinatra's wish, and tireless fight for these royalties has finally come to fruition. It's a start!

So why are they offering these royalties now? Some suggest it's a preemptive move to avoid potentially higher royalty rates which Congress has been mulling over and would likely pass in the coming year. Remember, internet radio has been paying these mechanical royalties since their inception. Some how terrestrial radio has avoided it till now.

Who will actually win with these royalties? Yep! Rihanna, Bieber, Taylor Swift, Coldplay etc.. With thousands of spins each week, that translates to some big bucks for the labels. And since they have these crafty 360 deals, they'll be recouping revenue from any angle possible. But what about the indie virtually unknown artists? You'll get to bump up from the hard shell taco to the Double Decker. ; ) But hey, it is still great exposure and hella bragging rights to say your band got played on ENTER YOUR LOCAL STATION CALL LETTERS HERE.

So why did Clear Channel opt to pay out additional royalties without the instance of the FCC, The Library of Congress or even the National Association of Broadcasters? It's clear! Radio is declining and labels are turning more effort and attention to the online music services for discovery and delivery. Clear Channel wanted to beat out the other broadcasters with sweetheart deals early on and making nice with the labels so the labels will continue to slide them their best new acts and other goodies. I'm anxious to hear how CBS Radio (Formerly Infinity Broadcasting) and Cululus Media will respond. 

UPDATE June 13, 2012
According to Arbitron stats, 93% of Americans still listen to broadcast radio. (Arbitron is to radio what Neilsen is to TV.) That's nearly 243 Million listeners...and they suggest that 15% of them are under the age of 12 while 600,000 new listeners joined in the past year. Huh? Is this all the hard working Latino laborers? You can't drive by a construction site without hearing pop Mexican songs. I will say that at least 50% of my music listening is to LA's KCRW and more specifically Morning Becomes Eclectic which features new and emerging bands and artists. Until Pandora can replicate the DJ discovery experience, broadcast radio will dominate. 

Stay tuned for more details and developments on more radio/label deals.

Photo credit: WKRP in Cincinnati (CBS)

Kanye / Jay Z sales surge...

August 9th, 2011
by Mike Galaxy

The joint Kanye West/Jay Z release “Watch The Throne” has already sold 150,000 in it’s first day of Apple iTunes exclusive release. Physical release won’t drop until Friday and is expected to move more than half a million by this weeks end and will likely, eventually topple Lady Gaga’s June release Born This Way which has settled around 1.2 million.

Important note about this is that Gaga’s release was largely sold for only $0.99 cents with Amazon.com exclusive, while the Kanye West /Jay Z collaboration is currently selling at $14.99 on iTunes exclusive. 
Best Buy will be one of two retailers selling Watch The Throne with bonus material for $12.99 starting this Friday Aug 12. All remaining retailers will drop digital and physical beginning next week. Will this album crack 1 million in two weeks, or will sales simmer by end of week since their biggest fans have likely already grabbed their copy from iTunes. 

Stay tuned for more details and updates on this release. 

Here's the story, of a man named Schwartz...

Sherwood Schwartz has died at 94. A great 60’s rock star? Not! But, many don’t know that the creator of such classic TV shows Brady Bunch and Gilligan’s Island also wrote their very memorable theme songs…Songs that even my 16 year old niece can recite. Songs that are probably more memorable and widely known than The Doors “People are Strange” and Nirvana’s “Come As You Are”. I am not attempting to compare Schwartz to Morrison or Cobain, and wouldn’t even compare Art Tatum and Ray Charles. But, a catchy tune is a catchy tune and should be recognized and respected as such. 

Is there a viable alternative to Facebook on the horizon?

By Mike Galaxy
New tech trends are racing up and down the digital super freeway at break neck speeds. Just as a new start up builds momentum and acquires financial seeding, there is another company in development ready to knock them off their PR podium. Myspace did it to Friendster. Facebook did it to Myspace. And now it appears there are some new companies aiming their sites at Facebook with plans to take down the networking empire with their own plans for a new social society.

According to a very brief tweet this morning from former Myspace CTO Dmitry Shapiro, it appears that he is planning to take on Facebook with his new start up Altly tweeting, “I know it sounds crazy, but our new company, http://altly.com, is building an alternative to Facebook. More details soon :)". 

So, what exactly is Altly you ask? Hell, we don't know either. The web site merely states that they are working on an alternative and provides an email contact. Is this is a shameless plug, or a calculated PR move? Either way, it has got my attention, as well as some other insiders buzzing. 

Dmitry Shaprio's entrepreneurial credentials go back to 2005 when he founded and launched Veho, an internet television platform with heavy funding coming in from Time Warner, Goldman Sachs, Michael Eisner and others. The online TV site went belly up in 2010 filing Chapter 7 Bankruptcy. Shapiro then joined Myspace attempting to resurrect the social site but leaving abruptly after only a year. Shapiro has also held web development positions at CollegeClub.com and Fujitsu Business Communication Systems.

All updates on Altly and Shapiro's plans will be posted here. Meanwhile, we can all set our Email News Alerts on this subject to stay current with developments. 

Stay Cool on Record Store Day

There are two major music events going on this weekend. Coachella Music Festival and National Record Store Day.
Which will you attend?
Well, if you're like me and opted to save the truck load of cash it costs to attend the three days of sonic sauna, accommodations and of course the extra ticket for your lover, then you will likely want to do something fun to take your mind off of Coachella Depression. Record Store Day just might do the trick. Besides, it's supposed to be over 100 degrees at the Coachella Fest, so why not stay cool, and surf the local record stores?
Here are just some of the events happening in and around the Los Angeles area this Saturday. Be sure to load your smart phone up with social apps Beluga, Hurricane Party, Fast Society, FourSquare, GroupMe etc and connect with all your friends while they flip through newly released vinyl and rock out to local rock bands.

Get to Amoeba Hollywood early and get a free Ltd edition Record Store Day Tee from Anti and Epitaph Records and Family Industries. At 2pm, the legendary Henry Rollins will play DJ. Then head up Sunset to Echo Park's newest record dispensary, Origami Vinyl where they will fill their tiny store with hundreds of new releases and performances by the Growlers and a special Guest at 2pm. The Eagle Rock / Highland Park vinyl store, Wombleton Records, may not be an official Record Store Day store, but they will be open and offering tons of deals that you won't find at the other shops, like thousands of cheap records including $1 vinyl and discounts on some great imports not found anywhere in town. One of LA's oldest shops, Rockaway Records is also offering some great deals slashing as much as 50% on most items in store including vinyl, CD's, shirts, posters and more...but excluding all Record Store Day releases...and they've got over 300 RSD releases this Saturday. Rockaway is also raffling off a signed Alice Cooper guitar. For those of you in Orange County, head over to historic Fingerprints in Long Beach. This is definitely the hot spot in the OC on RSD with Fucked Up performing at 2pm and Foo Fighters at 5pm, although I hear this show is sold out. If you want a chance to win Foo Fighter tickets, Music Saves Lives is giving a pair away.
For those of you not living in sunny Southern California, visit www.RecordStoreDay.com for more locations closer to your hood.

Here are some records I suggest you grab this Saturday.
Belle Brigade The Belle Brigade LP, Black Angels Another Nice Pair (RED%Vinyl) 12", The Cars Sad Songs 7", Civil Wars Dance Me To the End of Love 7", Dengue Fever Cannibal Courtship  LP, Fleet Foxes Helplessness Blues 12", Fleetwood Mac Rumours (Deluxe)(2LP 180 Gram Vinyl 45RPM) LP, AND Villagers/Charlote Gainsbourg  Memoir/Set The Tigers Free 7"

The decline of an internet socialite...

By Mike Galaxy
Back in 2003, an old friend of mine Tommy, from the 90's LA rock scene, emailed me an invite to join Friendster. I was like, huh? What is this? Some high school "Click"? Which frankly, I was very much anti and against. But, within a few months, several friends of mine in LA began joining in rapid numbers. So, I reluctantly signed up...and eventually, like everyone else, was addicted. Friendster was like the fun rich kid in school who would pay for all the nights out on town, and the boating trips to the lake. Then it was clear he wasn't really that cool. Then a new kid from California moved to the neighborhood with Vans shoes, a skateboard, and a Black Flag cassette. This was Myspace to all of us. We all abandoned our brief encounter with Friendster and joined the new Myspace in droves. Myspace was fresh, cool bells and whistles and spoke more of our language. Then coolness got better when they catered to all the indie bands allowing artists to post songs, photos and performance dates. All was going well until the Faux News head and staunch republican Rupert Murdoch tossed his coins into the mix. I knew instantly that this would not bode well for the millions of anti Bush, forward thinkers who were calling Myspace home several hours per day. I could feel the coolness factor declining...and the fact that Myspace began appealing more towards wannabe hookers and perverts using the network as a sophisticated Craigslist styled hook-up service, made it less cool as a friends club.

Soon after, I would begin to ignore my personal Myspace page and focus on my music business page, and scout bands using Myspace Music as an effective search tool for new music. Then came along another rich kid to our school...and he was cool. This was Facebook. As soon as the non-academic web socialites were allowed to join Facebook, we did in large numbers. Within months nearly every single friend and business colleague had a Facebook page. That was 2006. Now Rupert and his Mace Space have chased off nearly half of it's users, and the other half, rarely to never log in. Myspace is now old news and part of the history books.

Here is a fantastic article about the rise and decline of Myspace.
http://www.ctv.ca/generic/generated/static/business/article1974889.html