While raising funds from your fans might be a wise strategy for financing your next album, not everyone is successful, mostly because there's insufficient incentive for the fans to open up their wallets. The once mega Public Enemy is a prime example. The group was trying to raise $250,000 for recording and marketing a new album, and in December was 28% of the way there with $71,000 pledged. Since then, however, the fund has actually slipped to $67,400 instead of increasing.
Even though PE has been far more successful than any other band on the site in terms of total money invested, they're still unlikely to hit their target and here's why.
1) Like similar offerings, PE has multiple investment levels. Here's what they call "exciting incentives":
"Believer" Level = 1 Part ($25) Incentive: Exclusive, numbered CD in Digipak 1
"Hype" Level - 4 Parts ($100) Incentive: Exclusive, numbered CD Digipak, opportunity to buy 2nd CD at 50% off, & Name in booklet 4
"Rebel" Level - 10 Parts ($250) Incentive: All of Above plus Exclusive Limited Edition Public Enemy T Shirt 10
"Posse" Level - 20 Parts ($500) Incentive: All of Above plus Autographed Copy of CD signed by Chuck D 20
"Terrordome" Level [Limited to 50 investors] - 40 Parts ($1,000) Incentive: All of Above plus Unlimited use backstage pass for 3 years 40
"Bring The Noise" Level [Limited to 15 Investors] - 200 Parts ($5,000) Incentive: All of Above plus Executive Producer Credit on Album 200
The problem here is that the "exciting incentives" aren't really that exciting. You pay a relatively high price for not a lot in return. Perhaps they think that they don't have to offer more because they're a well-known entity, but it appears their fans have spoken with their lack of participation (or an example of a campaign done well, check out Josh Freese)."PE Number One" Level [Limited to 5 Investors] - 400 Parts ($10,000) Incentive: All of Above plus Studio Visit during recording session 400
2) The average investment per donor is pretty low at an average of about $75 per each of their 901 investors. Most other acts average well beyond 100 bucks, with some approaching 200. Again, there's not much of a benefit for the investor at almost any level so there's no enticement to throw a lot of money at it.
3) Sellaband doesn't have much in the way of tools to market much beyond their particular network, and PE hasn't had a good enough social networking campaign to continue to reach out to potential investors.
In fact, PE could've used their fame for a dynamite marketing campaign, but if the following video is an example of what they'e doing, it was doomed to fail.
Public Enemy/ SellaBand Promo from Command Pictures on Vimeo.
How could you make a video trying to raise money without adding any details? There's no steak and no sizzle.
4) It's hard to be sympathetic to a band asking for money who has a member that's all over television in commercials and reality shows. If Flavor Flav is so famous, why doesn't he finance it?
The lesson here is that for fan financing to work, they must feel like their getting something special at any investment level. Bang for the buck is just as important in this arena as in any other.