Music Business Journal: Music and Equity Crowdfunding

Can crowdsourcing propel the music business to outdo the glory days of old overnight?

Peter Alhadeff

May 1, 2013

Over the last fifteen years, since the advent of the worldwide web, there has been a revolution in the world of finance. More money is being raised online today than ever before from crowds of like-minded investors, consumers, and communities of fans, especially in the creative arts. The phenomenon is global and has all the hallmarks of a higher growth, early stage industry, with newer sites making the difference in the last couple of years. Kickstarter and Indiegogo, for instance, have taken over much business from ArtistShare, the first ever music fan-funded site started more than ten years ago.

Global growth has been explosive. According to the first ever Crowdfunding Industry Report – a free abridged version is available at www.crowdsourcing.org — the market will reach $3 billion early in 2013, up from half a billion in 2009. This is a new trade in the making, and top analysts and investors are bullish about its future. Fred Wilson, a well-known venture capitalist and blogger, has said that just in the United States, a one percent shift in long term investments could produce a $300 billion market. If he is right, and one-twentieth of all crowdfunding monies were spent on music, the business would outdo the glory days of old overnight.