On the over-value-ing of merch. In the case of our most recent KickStarter - the actual main intended end of this project is to produce a promo video, and in order to acquire means to accomplish that, we need to certainly over-shoot the costs of the physical product. Would it have been better to do what I've seen other bands do and just throw money at us to produce a video, something that doesn't really benefit the backers specifically? I personally don't think so. $15 for a mass-produced and professionally-distributed EP is indeed a vast over-pricing, but I think it's doing it a bit of a disservice to not consider that this EP will be exclusive strictly to the backers of the project. Limiting quantity so strictly and leaving no room for back-end sales drives the cost per unit sky-high in comparison to producing something with them aim to sell at gigs. Also, in exchange for the project reaching certain plateau goals, we agreed to go into the studio and spend hundreds of extra dollars recording additional material, again, exclusively for these backers. We've also allowed fans to have a hand in the track selection for this EP. So yeah, I full sympathize with your point thinking $15 to just purchase a random 4 or 5-song EP is over-priced, but when it's strictly limited to the backers, with exclusive content which was partially selected by the backers... I'm sorry, but I just don't feel that $15 (when we're eating the shipping costs for all domestic orders) is really that bad.
$15 is not bad for a limited edition EP, but I suppose I don't see the value for a band that does produce thousands of copies of their releases. A limited edition EP from a band like Edguy would be a very different thing. As you said, going limited increased your costs, but again, that's a business decision. For me as a fan, I don't really consider the costs of production when buying an album.
As for the video, again, that is something that doesn't effect me as a fan. Videos are cool, but it's not going to get played on MTV or anything. I don't particularly care for music videos, and a guitar playthrough is actually more interesting to me and cheaper. This is probably where I differ from most fans, but if I'm looking to support this specific kickstarter, I only look at the EP/perks, and not the video.
Also, I think, again, this doesn't properly factor in shipping costs. I get that you guys are taking a loss on domestic shipping, but the pricing basically closes off the EP to international fans unless they are willing to give up more money for less content.
Considering the same point but considering our previous album KickStarter - I don't think we over-priced anything. We valued the CD at $15, the exclusive t-shirt at $20, a commemorative plaque at $40 (the exact cost of the production of them), and signed drum heads at about $20 (a drum head itself costs about $15). We padded them a tad to help off-set shipping charges down the road, but all in all, I just don't think these prices were/are unreasonable. Sure, we added some packages that include things like inclusion on a special thanks list, but it's not mandatory - we made sure (and have always, and will always make sure) to include a package that allows people to just get the "bare-bones minimum" if they happen to just be more casual fans as opposed to people who really want to "back" the band financially.
That's fine. I have the same issue with shipping again. $23 for a CD isn't good value for me. Again, I was referring to kickstarters in general that are overpriced. I think the CD is overpriced, but it doesn't mean everyone feels that way.
On to the idea of fans being "responsible" for backing a band:
To be blunt - your'e on the losing end of this argument. I'm not saying that makes you factually wrong, but the "industry" is absolutely moving in the direction where crowd-funding is becoming the "new normal", and I don't really see a problem with that. Sure, it sort makes life difficult for the more "casual fans" out there - I've seen KickStarters that I opted out of because I either like but don't love the band, or thought the rewards/perks were unreasonable... but it's basically relying on a band's ability to generate enthusiasm in "super-fans" to give them capital. Doing what we're doing takes money - a LOT of money. We're a band of people aged 23-25 years old carrying the burden of living fees, college loans, and in the case one person, a 1-year old child on the income of 3 mediocre jobs. We all come from lower-middle class backgrounds - we don't have enthusiastic parents or uncles with thousands of dollars to loan us to pursue our passion projects or ease the cost of living. If it wasn't for what crowd-funding has made possible for us, we would still be a purely local band wasting our time desperately trying to squirrel away tiny amounts of money to make a badly-produced and poorly manufactured 4-song demo, hoping that one day our hopes and prays would be answered by some label with dollar signs in their eyes. This was a wonderful model 30 years ago when the industry had something to offer bands. These days, even if you can garner a lucrative contract with a "legit" label, the most they're going to offer you is enough of an advance to off-set about 30% of production costs of a pro-level record. Crowd-funding removes the middle man, thus cuts down on profit-sucking, and overall just keeps the band and the fans closer. To me it's still a fairly traditional business model - think of it as starting a small business, but instead of driving yourself needlessly into thousands of dollars of debt, you've sought out potential customers who believe in what you do to become benefactors/investors to help you get off the ground. When the product is delivered, we deliver the result, and people have seemed to be very happy with how we've handled things thus far overall.
I don't feel I'm on the losing end at all. As soon as these things really blow up, you'll see them become less successful. People just can't afford to throw around this much money for all of their favourite bands.
Also, you are well within your rights to raise money in any way you want, but I can think of 1 band in my local scene (out of 40 or so that come to mind that I know of) that has used a kickstarter, and that's more because their tour fell through. The reality is that 99.9% of metal bands have full-time jobs and need to find money for recording, pressing, and distribution. Sometimes it comes through labels or through their own personal funds, but I don't like the idea that kickstarters are mandatory because you aren't doing music full time. I'm currently writing an album, and I know if I end up releasing it that I'll be paying for 100% of pressing, recording, and artwork costs. And I don't expect to recoup any of that money.
As a final note, crowdfunding does not make life harder for the casual fans. It makes it harder for the more intense metal fans. The casual fan that is either a friend of the band, a local supporter, or someone who downloads your music and enjoys it is far more likely to throw money around than the guy who collects every single Motorhead album while attending several concerts a month, and travels to other countries (continents in some cases) to see festivals. Personally, I have a value put on every single album I'm interested in and I won't spend more than that because I know my prices really well and can put a value to each album.
The reality is, people are happy with crowdfunding. But these are the same people who are responsible for CD sales diminishing over the years. Not everybody has to be as into music as most of us on this board are, but those are the people I want bands to think of when they do things.
I should note that I've seen some really awful projects as well, and I understand that ethics and personal taste come into play a LOT. I've seen crowd-funding projects that make me ashamed to do them, because they give the whole process a bad name. But I just don't really believe that a few bad apples should really sour the whole process for everyone. Also, at the end of the day, the whole thing IS voluntary, meaning if you don't approve, no one makes you. We're always going to do everything we can to get the music out to the target audience anyway, but I just believe that the people willing to help invest in the band do deserve to be treated preferentially.
And this is my point. I don't agree with, and other than one instance, I likely won't support any crowdfunding. Even if it becomes more popular, there won't be any shortage of bands releasing albums through the older methods.
Spiner202, I mostly understand where your views are coming from, though I don't agree with them. I often pay upwards of $20 with postage to get a particular CD here in Aus, and sometimes more than $30. I shop around of course, but sometimes that's simply the best I can do on a specific release and I am happy to pay for a legit copy.
My comments are mostly related to my situation in Canada. Australia is a completely different world where everything is overpriced. Video games regularly cost $100+ there while they're $60 in the US and $70 in Canada. If I lived in Australia, I'd have completely different thoughts on the value of albums.
As an accountant, this part is making my brain hurt:
I too am an accountant
I completely understand that bands make basically no money and that this really helps them out, but this is my issue. Recording an album is basically a business venture. You put down some capital and depending on demand and how you manage it, you come out with a profit or a loss. At some point, either a label or a band is taking a risk in doing this (no different from any other business). This is why people get angry when labels give bands harsh contracts, but the reality is that the money needs to be recouped somehow (there are definitely cases where labels abuse bands, but let's assume this isn't one). Essentially Kickstarter is a transfer of risk. The risk (some, but not necessarily all) is transferred to the customer funding kickstarter. But when bands overcharge for their merch, they aren't transferring risk; they're directly transferring a loss. If a CD is worth $10 to me, then by paying $20 for your CD, I take a loss of one CD. I don't mind doing this occasionally for bands I love, but I know you (and other bands) proclaim kickstarter as the way of the future. Amplify this loss over the 50 CDs a person buys over the year (a conservative estimate for us collectors), and the price of enjoying metal has just doubled.
A business can fund its capital requirements from whatever source it likes, provided the source is willing. Why not potential customers? In many businesses, potential customers invest in projects years before seeing a return. The only point of difference here is that the returns are more emotional than monetary. The investor hopes they will have a cool item and a warm fuzzy feeling of having contributed to it, plus the enjoyment of the music itself. If they assess that risk/reward dynamic and voluntarily determine it's worth it to them, where is the problem?
Yes, there are some idiots in bands with no understanding of business. Probably quite a few in fact, which is hardly surprising if they have limited work and life experience outside of their music career. But a band with business savy are entirely within their rights to weigh the pros and cons of crowd-sourcing vs label contracts or whatever combination of the two may be workable.
They absolutely are allowed to do this. And if I were in a band that was trying to "make it", I would do it too. The band will likely lose less money doing this, and possibly even gain some popularity. But my comments are purely as a fan. It's just not realistic for me to support every one of my favourite bands this way. I'm hopeful that Mindmaze's new label deal will get them distribution in a distro I regularly order from, and I'll pick up the album that way.