Crowdfunding Music and the Democratization of Capital

Does crowdfunding democratize access to economic, social, and cultural capital for musicians? NCGL researchers studied the use of the crowdfunding web site Kickstarter to find out. We conducted content analyses of Kickstarter profiles (focusing on Canadian projects in the music category), surveyed Kickstarter users, and conducted interviews with Kickstarter users doing musical projects, music industry representatives, music funders, and policymakers.

Our results have been written up into an article that is currently under review for publication. When it is published, a version will be made available on this web site. In the meantime, we’ll share with you some of our results.

We wondered whether Kickstarter campaigns were ultimately profitable for the users who run them. We found that the income raised through Kickstarter can be important for the debut musicians who may not have the experience or connections to win a grant or music label support. Most of the money raised is
spent on executing the project; little, if any, of the funds raised by musicians on Kickstarter are used for income or against personal expenses. But, some musicians build on the experience of doing their project, and the reputation gained, to launch careers such as in teaching music.

We wondered whether Kickstarter might help to ameliorate some of the inequalities found in the music industry, where women and visible minorities are under-represented. We found, however, that the same kinds of inequities were replicated on Kickstarter. Traditional granting agencies like FACTOR fared better in our gender equity analysis.

We wondered about the relationship between traditional granting agencies like FACTOR and crowdfunding: is crowdfunding overtaking arts grants? The answer is no; Kickstarter contributes only a fraction of what traditional grants contribute to music funding in Canada. The granting agency FACTOR contributes almost ten times the amount of money that Kickstarter campaigns generate for Canadian independent musicians. However, Kickstarter grants seem to fill a hole for medium-sized projects between $2000 and $10 000 – FACTOR grants are typically $2000 or more than $10 000.

We found that the biggest beneficiary of Kickstarter is…Kickstarter! The platform is a vehicle for the creation of economic, social, and cultural capital for the platform and its owners. The venture capitalists and angel investors who own shares in Kickstarter see significant profits, appropriating the social and cultural capital generated by the platform’s users.

For the full results of this study, or the draft version of the paper, please check back on this web site or
email Sara Bannerman at banners [at] mcmaster [dot]ca