How Could Giving to Charity Help Save the Music Business?

This is a guest post written by Marcus Taylor, founder and director of Venture Harbour.
Over the past few months an interesting trend has emerged in the music industry: tens of thousands of artists are deciding to use their music to support charities. But what’s causing this phenomenon? Is the music industry merely stocking up on good karma, or is something else going on?

If anything significant has changed in the music business over the past year, it’s the abundance of new start-ups and innovative technology that’s been created to help artists promote their music and connect with fans. It just so happens that some of these services tap into the power of charitable giving.

One such service is a Connecticut-based music start-up called FanDistro, who enable artists to launch a marketing campaign that rewards fans for sharing their music by donating 20% of sales to charities in the fans’ names.

FanDistro CEO, Michael Penfield said “We’ve found that music fans are more likely to share an artist’s music with their friends via social networks if some of the sales proceeds from that song go towards helping charities.”

Other popular music services such as ReverbNation, Pledge Music, and Fair Share Music have also tapped into the power of charitable-giving to help artists promote their music while supporting charities.

But why are these companies keen to jump on the charity bandwagon – and why now?

In a recent interview at SXSW 2013, Benji Rogers, CEO of the popular band crowd-funding platform Pledge Music, mentioned that 99% of artists on Pledge Music launch their crowd-funding campaigns with a charitable component.

Benji alluded to the fact that having a charitable component to a song release puts the artists into a different headspace that focuses them not solely on selling records for profit, but to give as much as they can to charity.

The motivations for launching a charitable music campaign will ultimately vary between artists and in many cases there will be a multitude of reasons, ranging from purely altruistic to the less noble benefits of supporting charities. I believe this trend has a lot to do with social media.

Is social media driving this trend?

Thanks to social media, artists can now build a global fan base at very little cost. Combined with the fact that social media has made it easier for people to support charities, the stage has definitely been set to drive this trend.

Historically, artists had to be signed to a record label to afford the production and marketing costs of reaching a large audience of fans.

Social media, the Internet, and advances in production technology have changed this dramatically, making it possible for artists to produce and market themselves. This seismic shift in power away from the traditional music industry gatekeepers towards the fans has meant that the long tail of independent artists are now empowered to reach an audience online.

By being able to connect with fans through social networks, these artists, who previously would have struggled to reach a global audience, are now empowered to sell their music and support charities in the process.

At the same time, social media has created new ways for people to support charities. One particular study by Waggener Edstrom suggested that 3 out of 4 people said that it was important for them to influence others to care about the cause. Interestingly, the study goes on to suggest that the most common reason for liking and interacting with a charity on Facebook is to publicly display support for that cause to friends and family members.

It’s undeniable that social media has played an important role in making this a viable marketing tactic for so many independent artists.

The outcome seems to speak for itself.  Since launching Music for Good, a music sales platform that splits the proceeds from song sales 50/50 between the artist and the charity, just over one month ago, ReverbNation has seen over 69,000 artists agree to take part.

Jed Carlson, President and co-founder of ReverbNation said:

“It’s obvious that supporting charities is part of most artists’ DNA — whether it’s through charity concerts or sharing a percentage of merchandise sales at shows. Music For Good takes that tendency and transforms it into a marketing tactic with a heart. Every single day artists can now do good with their music”

Besides supporting charities and doing some good, there is also a much-needed benefit to all of this for the music industry. It’s helping artists to reach larger audiences and be compensated for their art.

In the United Kingdom, a company called Fair Share Music, who are regarded by some as ‘an ethical alternative to iTunes’, have been recognised by the British Phonographic Industry as being a viable way to combat illegal downloads, while protecting the intellectual property of artists and songwriters and supporting charities.

Ultimately, most people are less likely to download music illegally if they know that they’re hurting the pockets of charities. On the flip side, many people are more willing to pay a higher fee for products if they know that it’s contributing towards charity in some way. This not only increases the likelihood of artists being compensated for their work, but it also allows artists to get creative with higher margin products and services that they can offer to fans and charities.

Will giving to charity save the music industry? While far from being a silver bullet, I believe it’s definitely a step in the right direction, both ethically and creatively.

Image Credit: Rachel Elaine

Marcus Taylor is an award-winning young entrepreneur from Oxford with a passion for online business, the music industry, and getting out of his comfort zone. In 2012 Marcus created the World’s first scientifically valid ‘comfort zone calculator’, which he later presented about at a TED event in Australia.