Over the last decade, the music industry has struggled to provide a reliable way to successfully support independent artists. The traditional method of saving money to make a record, playing a ton of shows and hoping that people buy your music just isn’t working. Now more than ever, the market is so saturated with great music that artists often struggle to break even, which is ironic because music is more accessible now than it has ever been. How can an independent artist “make it” in the digital age without signing a long term record deal?
Generally speaking we’ve stopped pirating our favorite music in favor of subscription based streaming services, only to learn that a small fraction of what we pay for these services is actually returned to the artists. As fans, we have loads of great music at our fingertips but very few ways to support the bands we love. Certainly the resurgence of vintage music mediums like vinyl and cassette tapes have opened new financial avenues for the independent artist, but what if there were a way for fans and artists to be more intimately connected?
Enter PerDiem, a crowdfunded music investment platform that is looking to breathe new life into the music industry.
Quite simply, PerDiem is an online platform that allows fans to act as record producers. By purchasing shares, PerDiem allows the public to invest in the success of their favorite artists.
Here’s how it works:
An artist determines how much money they need for their new project, i.e. making a new record or going on tour. Then the artist chooses a percentage of the money raised to give back to their investors. Finally, the artist asks fans to help them reach their financial goal by purchasing shares. As revenue from the project grows, the percentage set by the artist is returned to the project’s investors based on how many shares they’ve purchased.
In this model, an artist’s success is directly tied to the fan’s ability to promote their music. The more an investor promotes an artist, the more money that artist makes, meaning more money finds its way into the pockets of its investors. This model creates incentive for people to put their money into music while bringing fans closer than ever before to their favorite musicians, making PerDiem a potential game changer for independent artists.
Ahead of their Athens launch party last Friday, we got to ask founder Brandon Nelson a few questions about his vision.
Vinyl Mag: What made you want to start PerDiem?
Brandon Nelson: I was working in the music industry and saw bands having to work full time jobs and move in with their parents so they could simply afford to live. I watched bands not be able to release songs they loved because they wouldn’t sell or make it on the radio. I decided to leave the music industry because it was sad to see this happening. A few months later I was floating this idea of investing in music to a few friends and people started getting excited about it. Before I knew, I had people wanting to build out the platform and artists wanting to launch their music on it. It was like people were sort of forcing me to make it happen. Every time I would tell artists about the idea they would tell me “you have to do this”. Seeing how much of an impact music can have on people’s lives and the potential for this to make a difference, I knew that I had to do it.
VM: How is PerDiem different from other crowdfunding platforms?
BN: If an artist raises money on a traditional crowdfunding platform, the people are either “donating to” or “pre-ordering” their music. With PerDiem, you are actually investing in the music. So when revenue is generated from that music, part of the sales go back to the people who invested in it. We are able to do this by distributing the music and managing all of the technical stuff for the artists. This way artists can focus on just making the music and having a team of people who have a vested interest in making that music successful.
VM: Is PerDiem open and available to every band or artist, or are there criteria for gaining approval to start a campaign? Would PerDiem ever deny a band’s request to start a campaign?
BN: We welcome any artists to the platform! We work with the artists to make sure they fully understand the platform and are set up for success. It’s still early on so we are determining the best way to go about adding artists to it so that investors are protected, but we will never deny an artist based on genre or style.
VM: Is there a certain amount an artist must raise in order for the campaign to move to the next stage?
BN: Yes, an artist sets how much they are raising and must reach that goal in order to receive the funds.
VM: So my band wants to fund a record or raise money for our upcoming tour. What is the process for starting a PerDiem campaign?
BN: Go to the website (www.perdiem.rocks) and submit your information! We will reach out and get to know you a little better and walk you through everything.
VM: Like any good independent band, we have an entrepreneurial spirit. Can we use PerDiem to buy merchandise, fix our van, or get a new tattoo?
BN: Totally. There has to be an incentive for people to invest money into your band, so that would be tied to a song or album that you are creating. For example, you want to raise $20k to produce an album, you can use that money to fix your van, get a tattoo, and buy some merchandise – as long as you are able to produce the record with the money that you raised.
VM: What if the record doesn’t get made, or never gets distributed? What happens to the money that was pledged?
BN: There is always a risk when investing in anything. There is a chance that something could happen where they use the money and are unable to produce a record at all. As an investor, you are giving your money to an artist that you believe in to give them a shot at their dream. That is why it’s important to only invest in artists that you truly believe in. We try to make this very clear in our “Trust & Safety” part of the site.
VM: A band I love is on PerDiem and I want to help them make a record. How do I get involved?
BN: If you want to invest in a band you simply go to the artists page, select how many shares you want, and buy them. All of the information on how much they are raising, what they are raising it for, and how much they are giving back is all hosted on their page.
VM: The band is going to pay me a percentage of revenue from record sales?! Cool! So… how do I get my money?
BN: When a fan wants to “cash out”, we’ll deposit the value of those shares into your bank account. We are building out a much more comprehensive platform so this process may change a bit in the future to make it easier and more streamlined.
VM: This could be a game changer for the music industry. I see it not only as a way for fans to fund their favorite bands, but also as an opportunity for a fan or group of fans to essentially become an independent record producer. Have you thought about that at all?
BN: Absolutely. The amazing part of the platform is that it turns your fans into your marketing team. I see investors wanting to use their resources and talents to help the bands they are invested in. For example, a videographer could film a music video for a band they invested in, or someone with a recording studio could offer studio time to artists they have invested in as well. It creates an entire new industry of opportunity around music. I always have this dream of an inner city kid taking his $10 and investing it into an artist that he believes in. Then that $10 turns into $20, then $100, etc.. Next thing you know, he is a music curator that people look at to find new bands and he is making a living by finding good music. The possibilities are exciting!
VM: Why stop at records, tours, and merch? In theory, PerDiem could be used to fund things like festivals, benefits, or even music venues where a percentage of proceeds from the events are returned to its investors. Would you want your platform to be used in such a way?
BN: We actually get that question a lot and it’s definitely something that we are interested in. Right now we are focused on fixing what we believe is the biggest problem in the music industry, then using what we have learned to expand into other areas where there is a demand for it. We have a pretty big vision for PerDiem so I wouldn’t be surprised to see it expanding into other areas in the future.
VM: When is it going live and how many artists do you have lined up?
We did a test run with a couple artists to see how people would interact with the concept. In just a few days an artist named Nico Blue raised $1,000 to produce his first original single. So we know that people are willing to invest in music and use the platform. We’ve got some exciting artists in the pipeline and an incredible group of people supporting us. We’re planning to add more artists over the next couple of weeks and continue to build it into a platform that can support the next generation of music.
To find out more about PerDiem, type “perdiem.rocks” into your preferred search field, and stay up to date with their soon to be launched Twitter feed @perdiemmusic.