Megan  Himel   Berklee  College  of  Music,  Valencia         Culminating  Experience   Reflection  Paper   Due  July  3,  2015             Crowdfunding  and  the  Music-­‐Making  Paradigm:   A  Case  on  PledgeMusic           This  document  contains:   Reflection  Paper       MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  1  OF  10   Summary     My  Culminating  Experience  was  one  of  the  options  presented  at  the  beginning  of  the   school  year,  open  for  application:  a  case  study  and  accompanying  teaching  note  on   PledgeMusic.     This  project  fell  somewhere  between  a  research  and  consulting  project:  it  required  a   great  deal  of  investigation  into  one  company  (PledgeMusic),  while  being  in  the  service   of  another  institution,  Berklee’s  soon-­‐to-­‐be-­‐formed  publishing  entity.    Moreover,  it  is   written  based  on  the  standards  for  a  case  and  teaching  note  as  established  by  Case   Centre,  rather  than  one  of  the  4  styles  presented  during  our  Music  Business  Seminar.       Results     The  case  and  teaching  note  I  am  submitting  for  this  CE  is  a  work  in  progress.    The   information,  story,  and  teaching  method  are  completed,  but  will  be  subject  to  revision   by  Alexandre  Perrin  (who  is  co-­‐authoring  this  with  me)  and  the  approval  of  Benji   Rogers  (Founder  and  President  of  PledgeMusic).     Once  these  revisions  by  parties  other  than  myself  are  completed,  supporting  documents   (such  as  worksheets  or  slides)  can  be  generated.    Since  Berklee’s  publishing  entity  will   not  be  ready  until  the  end  of  2015  or  early  2016,  we  have  some  leeway  in  taking  this   through  the  remainder  of  the  editing  and  publication  process.         MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  2  OF  10   Process       I  dove  into  this  project  with  very  misaligned  expectations.    I  did  not  fully  understand  the   difference  between  a  case  study  (as  a  standard  research  method)  and  a  case  for  the  case   method  of  teaching.    Prior  to  my  attendance  at  Berklee,  I  had  never  been  exposed  to  the   case  method,  although  it  was  common  for  my  teachers  (and  myself,  as  a  teacher)  to   reference  and  engage  with  different  research  and  publications  as  part  of  the   coursework.         I  began  much  more  research-­‐focused:  I  wanted  to  learn  as  much  about  what  made   PledgeMusic  tick  as  possible.    I  read  literature  on  the  music  industry,  on  crowdfunding,   and  PledgeMusic.    I  may  have  read  every  article  about  Benji  Rogers  and  PledgeMusic   ever  published.    The  more  I  learned,  the  more  questions  I  had,  and  the  less  certain  I  was   about  the  direction  of  the  case.         Meanwhile,  my  personal  interests  at  Berklee  were  changing.    Instead  of  focusing  on   curriculum  development,  my  attention  began  to  turn  to  marketing.    Specifically,  I  began   to  wonder  about  consumer  insights  and  the  appropriate  application  of  that  knowledge.     PledgeMusic’s  model  of  selling  to  the  superfan  in  a  way  that  lets  them  engage  at   whatever  price  point  they  desire  while  incentivizing  pre-­‐payment  and  social  sharing   through  behind  the  scenes  content  is  an  excellent  consumer  insight,  based  on  Benji’s   gut.    I  grew  curious  about  the  kind  of  data  a  pool  of  early  adaptors  could  provide,  and   very  much  wanted  to  redirect  my  research  into  an  analytics  capacity  –  there  were  so   many  potential  insights  that  it  was  addictive.    In  pursuing  this  line  of  inquiry,  I  learned   three  things:  first,  the  type  of  information  I  wanted  to  uncover  was  something  people     MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  3  OF  10   were  willing  to  pay  a  premium  for;  second,  the  scale  of  analytics  I  was  curious  about   was  beyond  the  scope  of  my  CE,  and  something  that  organizations  pay  analysts   hundreds  of  thousands  of  dollars  a  year  to  generate,  and;  finally,  in  PledgeMusic’s  eyes,   the  data  belongs  to  the  artist.    Using  it  for  other  purposes  requires  permission.         With  this  line  of  inquiry  was  taking  me  in  one  direction,  I  was  struggling  to  schedule   interviews  and  acquire  the  information  I  wanted.    The  interviews  I  conducted  occurred   in  March  and  April,  pushing  back  my  writing  process.    I  learned  that  the  marketing  data   I  was  interested  in  was  not  available  to  me  in  the  depth  I  desired  for  a  comprehensive   case;  much  more  information  was  available  for  an  introductory  business  model  case.         The  direction  of  the  case  was  something  I  could  not  know  until  I  conducted  the   interviews  and  requested  data,  but  I  made  the  mistake  of  reading,  researching,  and   preparing  intensely  in  advance  of  these  interviews  and  data  requests.    My  vision  for   where  I  wanted  the  case  to  go  was  dramatically  different  from  where  the  information   PledgeMusic  was  able  to  share  with  me  would  allow  me  to  go  while  maintaining  quality.     If  I  were  to  do  this  again,  I  would  have  done  a  brief  review  of  Benji  and  PledgeMusic,   conducted  one  or  two  interviews  and  data  requests,  and  then  done  a  follow  up   literature  review  based  on  the  direction  that  information  pointed  me.    If  I  had  followed   this  method,  I  would  have  been  significantly  more  efficient.         As  it  stood,  however,  the  end  of  April  rolled  around  and  I  had  finally  collected  all  I  was   going  to  acquire  from  Benji  and  PledgeMusic.    I  could  no  longer  fight  the  direction  the   case  was  going,  and  I  had  to  abandon  much  of  the  information  I  was  looking  into  in     MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  4  OF  10   order  to  find  more  relevant  information  for  the  case  as  business  them,  rather  than  a   marketing  one.       Lesson  plans  are  simple  for  me  –  and  a  teaching  note  is  basically  a  detailed  lesson  plan,   therefore  not  a  problem.    The  surprising  struggle  I  had  was  writing  the  case  itself.    The   style  is  different  than  most  writing  I’ve  done  in  the  past,  and  a  good  case  plays  with  the   information.    I  discovered  that  not  only  to  I  need  to  withhold  information  in  a  case,  but  I   need  to  place  information  in  the  story  in  a  way  that  forces  students  to  judge  both  what   is  useful,  and  how  to  organize  and  apply  the  useful  information.    I  err  on  the  side  of   including  too  much  and  being  too  straightforward,  so  writing  the  case  has  been  an   interesting  exercise  that  goes  against  my  instincts.    It  was  also  a  significantly  longer   process  than  I  anticipated.    In  fact,  I  wrote  the  case,  then  deleted  half  of  it  when  I  went   back  in  for  the  teaching  note.     Next  Steps       The  next  steps  for  this  case  is  to  go  to  Alexandre  Perrin  for  revision,  and  then  to  Benji   Rogers  for  approval.    From  that  point,  we  will  generate  the  appropriate  teaching   materials  (worksheets,  slides,  etc.)  and  submit  for  publication.    Publication  will  not   occur  until  late  2015  or  early  2016  due  to  the  lack  of  a  publishing  entity  at  Berklee  right   now.    Berklee  is  in  the  process  of  creating  an  entity,  and  this  case  is  slotted  to  be  the   first  publication.           MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  5  OF  10   Contribution  to  the  Discipline  and  Profession       This  case  will  be  published  and  made  available  to  music  business  classrooms   everywhere.    It  explores  business  models  in  the  context  of  (a)  crowdfunding,  and  (b)   music.     Impact  on  Me     The  most  valuable  thing  I  drew  from  this  project  was  the  value  of  consumer  insight.     Even  though  PledgeMusic  goes  with  its  gut  and  general  observations,  the  activities  at   PledgeMusic  have  the  power  to  reveal  very  interesting  trends.    I  am  curious  about  the   things  we  can  learn  by  looking  closely  at  those  who  love  music  –  they  are  the  early   adopters  of  musical  innovations,  and  have  the  potential  to  function  as  a  early  warning   system  for  the  next  trends  in  content  and  engagement.    More  importantly,  I  am   interested  in  how  that  information  can  and  should  be  used  to  improve  the  fan   experience  and  the  artist’s  financial  sustainability.     Other     I  haven’t  decided  whether  I  love  or  hate  this  style  of  writing  and  teaching.    That  being   said,  I  may  have  accidently  signed  myself  up  to  write  another  case  when  this  is  done.         If  I  were  to  do  this  over,  I  would  not  have  done  a  case  on  PledgeMusic.    There  are,   however,  two  cases  I  would  write  related  to  PledgeMusic:     MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  6  OF  10   1. A  marketing  case  based  on  an  artist  launching  his/her  first  PledgeMusic   campaign.    Following  either  the  artist  or  the  campaign  manager,  we  would   examine  best  practices  for  a  PledgeMusic  campaign,  as  well  as  how  to   personalize  the  process  based  on  an  artist’s  goals,  tools,  and  fan  base.   2. An  economic/value  based  case  in  which  an  artist  (or  artist  manager)  needs  to   decide  how  to  go  about  funding  and  releasing  the  artist’s  next  album.    Students   would  have  to  weigh  services  provided  against  cost  to  artist,  comparing  several   options  (traditional  record  deal,  DIY,  bank  loan,  personal  investment,   PledgeMusic,  Kickstarter,  Patreon,  etc.).     Bibliography     Bannerman,  S.  (2013)  ‘Crowdfunding  Culture’,  Wi:  Journal  of  Mobile  Media,  Vol.  7,  No.1     Bhadrapur,  S.  (2013)  Crowdfunding:  Emergence  of  a  New  Trend  in  Indian  Film  Making,   Case  Study.  Bangalore,  India:  Amity  Research  Center     Billings,  K.  (2013)  Jayce  Varden  on  PledgeMusic.  Available  at:   http://www.thembj.org/2013/12/for-­‐service-­‐and-­‐superfans-­‐pledgemusic-­‐and-­‐jayce-­‐ varden/  (Accessed:  30  November  2014)     Byrne,  D.  (2013)  How  Music  Works.  San  Francisco,  USA:  McSweeney’s  Publishing     Cann,  S.  (2007)  Building  a  Successful  21st-­‐Century  Music  Career.  Thomson  Course   Technology     Cords  for  Music  Chats  with  Benji  Rogers,  Founder  of  PledgeMusic  (2014)  Cords  for  Music,   18  September.       Cyber  PR  (2012)  What  Seth  Godin  Can  Teach  The  Music  Industry  -­‐  Part  1.  Available  at:   https://www.youtube.com/watch?v=JXmcxuckvsA       Dvorak,  J.,  van  Houwelingen,  J.,  Klipper,  M.,  Paulsson,  M.  and  Hulsink,  W.  (2014)  Equity   Crowdfunding  -­‐  Symbid  Entering  the  U.S.A.,  Case  Study.  Erasmus  University:  Case   Development  Centre     Edison  Research  and  Triton  Digital  (2014)  The  Infinite  Dial  2014.         MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  7  OF  10   Frydrych,  D.,  Bock,  A.,  Kinder,  T.  and  Koeck,  B.  (2014)  ‘Exploring  entrepreneurial   legitimacy  in  reward-­‐based  crowdfunding’,  Venture  Capital,  16(3),  pp.  247–269.  doi:   10.1080/13691066.2014.916512     Hekman,  E.  and  Brussee,  R.  (no  date)  Crowdfunding  and  Online  Social  Networks,  Case   Study.       Herstand,  A.  (2014)  PledgeMusic  Looks  To  Change  The  Future  Of  The  Album  Release.   Available  at:  http://www.digitalmusicnews.com/permalink/2014/01/30/pledgemusic       Hypebot  (2015)  Benji  Rogers,  Founder  And  President  Of  PledgeMusic,  Looks  Back  On   2014.  Available  at:  http://www.hypebot.com/hypebot/2014/12/benji-­‐rogers-­‐founder-­‐ and-­‐president-­‐of-­‐pledgemusic-­‐looks-­‐back-­‐on-­‐2014.html       IFPI  (2014)  IFPI  Digital  Music  Report  2014:  Lighting  Up  New  Markets.       IFPI  (2015)  IFPI  Digital  Music  Report  2015:  Charting  the  Path  to  Sustainable  Growth.       Ipsos  MediaCT  (2013)  The  Digital  Music  Consumer  -­‐  A  Global  Perspective.       Kerr,  W.  R.  and  Brownell,  A.  (2013)  Homestrings,  Inc.:  Diaspora-­‐Based  Financing  and  the   Crowd  Funding  of  Development,  Case  Study.  Boston,  MA:  Harvard  Business  School     Kickstarter  (no  date)  Kickstarter  Stats  —  Kickstarter.  Available  at:   https://www.kickstarter.com/help/stats  (Accessed:  18  June  2015)     Kickstarter  (no  date)  Rewards  —  Kickstarter.  Available  at:   https://www.kickstarter.com/help/handbook/rewards  (Accessed:  25  June  2015)     LeBlanc,  L.  (no  date)  Industry  Profile:  Benji  Rogers.  Available  at:   http://www.celebrityaccess.com/members/profile.html?id=654       Leleux,  B.,  Schmidheiny,  S.,  Daar,  C.  and  Lugger,  V.  (2013)  Licia  Chery  and  My  Major   Company:  Crowd  Financing  to  Stardom,  Case  Study.  UK  and  USA:  IMD:  Real  World.  Real   Learning     Lindvall,  H.  (2009)  Behind  the  music:  The  future  of  fan  funding.  Available  at:   http://www.theguardian.com/music/musicblog/2009/dec/10/future-­‐fan-­‐funding       Mark,  K.  and  Parker,  S.  (2012)  Devium’s  Dash:  Crowdfunding  a  Venture  on  Kickstarter,   Case  Study.  London,  Ontario,  Canada:  Richard  Ivey  School  of  Business  Foundation     Mulligan,  M.  (2015)  Meeting  the  Needs  of  the  Always  On  Fan     Nielsen  (2013)  Turn  It  Up:  Music  Fans  Could  Spend  up  to  $2.6B  More  Annually.  Available   at:  http://www.nielsen.com/us/en/insights/news/2013/turn-­‐it-­‐up-­‐-­‐music-­‐fans-­‐could-­‐ spend-­‐up-­‐to-­‐-­‐2-­‐6b-­‐more-­‐annually.html         MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  8  OF  10   Passman,  D.  S.  (2012)  All  You  Need  to  Know  About  the  Music  Business:  Eighth  Edition.   New  York:  Simon  &  Schuster     Peoples,  G.  (2012)  Five  Digital  Startups  to  Watch  in  2013.  Available  at:   http://www.billboard.com/biz/articles/news/1483930/five-­‐digital-­‐startups-­‐to-­‐watch-­‐ in-­‐2013       Pham,  A.  (2013)  PledgeMusic  Redesign  De-­‐Emphasizes  Crowdfunding.  Available  at:   http://www.billboard.com/biz/articles/news/5922985/pledgemusic-­‐redesign-­‐de-­‐ emphasizes-­‐crowdfunding?utm_source=twitter       PledgeMusic  (2013)  ‘PledgeMusic  Wins  Grammy  Music  Technology  Lab’,  PledgeMusic   News,  27  February.  Available  at:  http://www.pledgemusic.com/blog/477-­‐pledgemusic-­‐ wins-­‐grammy-­‐music-­‐technology-­‐lab       PledgeMusic  (2015)  Data  Request  1     PledgeMusic  and  Nielsen  (2013)  ‘The  Buyer  &  The  Beats:  The  Music  Fan  and  How  to   Reach  Them’,       PledgeMusic  (no  date)  Available  at:  http://www.pledgemusic.com/       PledgeMusic  (no  date)  Charities  on  PledgeMusic.  Available  at:   http://www.pledgemusic.com/charities       Pritchard,  E.  (2013)  Crowd  Funding:  An  Analysis  of  Various  Platforms  [INFOGRAPHIC].   Available  at:  http://www.verticalmeasures.com/internet-­‐marketing-­‐2/crowd-­‐funding-­‐ an-­‐analysis-­‐of-­‐various-­‐platforms-­‐infographic/       Rogers,  B.  (2012)  ‘How  Music  Streaming  Services  Could  Help  Artists,  Fans,  Labels,   Charities  &  The  Music  Industry’,  Hypebot  Blog,  1  June.  Available  at:   http://www.hypebot.com/hypebot/2012/06/how-­‐streaming-­‐services-­‐could-­‐help-­‐ artists-­‐fans-­‐labels-­‐charities-­‐and-­‐the-­‐music-­‐industry-­‐as-­‐a-­‐whole.html       Rogers,  B.  (2015)  April  21  Music  Business  Seminar  21  April     Rogers,  B.  (2015)  ‘Going  Direct-­‐To-­‐Fan  in  a  Streaming  World’,  PledgeMusic  News,  11   June.  Available  at:  http://www.pledgemusic.com/blog/going-­‐direct-­‐to-­‐fan-­‐in-­‐a-­‐ streaming-­‐world       Rogers,  B.  (2015)  ‘March  11  Skype  Interview’.  Interview  with  11  March,       Rogers,  B.  (2015)  ‘March  31  Skype  Interview’.  Interview  with  31  March,       Rogers,  E.  (2003)  Diffusion  of  Innovations.  Fifth  Edition  edn.  United  States:  The  Free   Press     Shah,  R.  (2013)  Crowdfunding:  A  Blessing  for  Small  Business  Start-­‐ups?,  Case  Study.   Bangalore,  India:  Amity  Research  Center     MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  9  OF  10     Shah,  R.  (2014)  Innovative  Fund 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 of  Crowdfunding.         Appendix   Data  Request  #1  (screen  shot  of  email):       MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  10  OF  10     Audio  recordings  of  all  interviews  are  available,  but  cannot  be  submitted  through  Turn   It  In.     MEGAN  HIMEL,  CE  REFLECTION  PAPER  2015  |  11  OF  10