Crowdfunding: A Case Study of a New Model of Financing Music Production

Abstract

This article analyzes the application of crowdfunding to finance the production of music recordings. The analysis is based partially on a case study of a crowdfunding platform located in Poland (MegaTotal). The case study illustrates how pooling contributions of crowdfunders and redistributing risk makes it possible to release records that would not be released by a traditional recording company. The analysis of quantitative data shows that one of the most important factors for success in the process of capital accumulation via crowdfunding is the involvement of a significant number of backers who make repeated contributions to a project. Additional factors that may help a project succeed are also discussed, such as engagement in communication with potential backers and offering bonuses to contributors. In this way, crowdfunding helps overcome one of the structural problems of the traditional recording industry.

Mining and investigating the factors influencing crowdfunding success

“…Trust is an important factor relating to conditions of uncertainty or risk and it has not been adequately researched in the crowdfunding literature (Chang et al, 2011;Galuszka and Bystrov, 2014;Xiao et al, 2014;Song & Berger, 2017). Trust has a direct impact on investment intention and is fundamental to crowdfunding (Saxton and Wang, 2014;Wheat et al, 2013).…”

“…Although the literature on computer game marketing analyzes these processes in detail, relatively little attention has been paid to the problem of financing the production of such games, and what particularly makes some succeed and other's fail (Galuszka and Bystrov, 2014;Song and Berger, 2017).…”

“…While some have argued that crowdfunding is borderless and that the entire world is a target audience for funding, this may not necessarily be true (Galuszka and Bystrov, 2014). It is claimed that every funding proposal has a relevant audience, a community of interested people who in one way or another benefit from or identify with a given venture.…”

A Research on the Factors to Introduce Crowdfunding in the Swine Industry

“…, [22], [23], [25], [27], [33], [34] 펀딩 모금기간 (Funding Period Duration) 차입신청자가 대출 신청한 금액을 모금하는 기간 [12], [13], [21], [25], [26], [27], [29], [31] …”

Crowdfunding: Towards a redefinition of the artist’s role – the case of MegaTotal

“…MegaTotal charges no commission. It earns mostly thanks to advertising income and a financial interest earned on funds contributed to the projects on the platform (Galuszka and Bystrov, 2014a). Kickstarter charges successfully funded projects 5 percent commission fee and a payment processing fee equal to ‘3% + $0.20 per pledge’ (Kickstarter, 2015).…”