Friday, 28 June 2013

Musicraiser and Sellaband compared: an empirical analysis

(by Nina Passarelli) 

Sellaband and Musicraiser are two platforms, respectively, German and Italian, which focus on musical projects.
Both are reward-based, type all or nothing.
The Italian platform was founded in 2012 in Milan, in the wake of popular sites of creative projects like Kickstarter and Indiegogo.
Sellaband is a platform that was created in April 2006 by Pim Betist and Johan Vosmeijer and it was launched in August of the same year, and it was considered as a driving force in the "music revolution".
A survey carried out on two platforms, deepened through the collection and elaboration of a sample of data extracted from the websites of the two platforms,  and, about the total number of funded projects, allows you to make some considerations on reward-based platforms.
The different projects, managed by the two platforms, were divided by denomination of the loan.
The purpose was to demonstrate that the most effective rewards that stimulate raisers, are acknowledgments on the site, the pre-sale of products and the direct participation in the project (crowdsourcing).
As for the part financed by the Italian Musicraiser platform, it consists of 85 successful projects[1], in just 6 months of operation, a total of 240206 euro collected and 6797 crowdfunders.
The sample, for such a platform, was then reclassified and must be considered in relation to two characteristics:
• the number of crowdfunders;
• the type of reward.

With regard to the first characteristic shows a clear trend of funders to be oriented towards small amounts, especially from 1 to 50 and from 50 euro to 100 euro (Figure 1).

 Figure 1 The sample in relation to crowdfunders’ number (Musicraiser)

Another aspect that can be highlighted in the graph is that most raiser particularly fond invest from 150 to 200 euro instead of 100 to 150 Euros.
This finding is justified in relation to the second feature, namely, the type of reward, which is more incentive in the case of the first cut of funding (the raiser have, for example, the opportunity to participate actively in the project), rather than in the second (where they obtain only a greater number of products in pre-sale).
A first consideration that you can do, therefore, is to stimulate the funders to invest in a greater cutting to offer them something that increases their motivation (the only increase in the number of products offered is not enough: you need a step further, for the raiser to feel an active part of a specific project).
As regards, just the second characteristic, as proposed, the most number of raisers appears to be stimulated, in particular, by two types of rewards: thanks or the acknowledgment on the site and the pre-sale of products (Figure 2).

Figure 2 The sample in relation to different rewards (Musicraiser)

This result shows that crowdfunder is interested in projects that can actually generate something new, that allows you to emphasize that this type of financing is not at all a pittance, as many mistakenly think, but adherence to a project, the vision of the artist, in which the raiser believes (for this reason, therefore, also thanks or be quoted on the website are a powerful incentive, as the lender wants to show how he helped transform into something real simple idea).
The subjects are, therefore, more attractive a reward such as a CD rather than a gadget or a dinner with the artist (although, it should be noted that the latter is required for financing a major change).
The index of asymmetry, which appears to have a positive value, then, denotes how the distribution has a tail which extends asymmetrically in the cuts of funding with the highest values.
This allows you to make other important considerations, also in relation to the first feature discussed, and to highlight two trends:
§  the successful campaigns are based on contributions of small entity in large amounts, can be made to achieve the goal creator predetermined minimum and also to overcome;
§  the trend of pre-sales backers, those who support the project, provides validation of the application and at the same time operating capital to the creator of the project.
Next, we proceeded to analyze the projects funded on Sellaband, always aim to highlight what are the most effective rewards.
The German platform operating for more time than that Italian and, for this reason, the empirical evidence on it turns out to be most important to show what rewards encourage the most funders.
Sellaband funded until the date of the evaluation, 107 successful projects, for a total of funds disbursed amounting to about 4,5 Mio USD, and 35000 raisers who have supported these projects.

In such a platform, unlike Musicraiser, once you reach the target, "the doors are closed," that is not possible, for other raiser, support the project and invest money.
Reclassifying all projects according to the cut in funding, will provide important information on the number of crowdfunders and type of reward.
Even in this case, the raiser demonstrate a preference for the cuts investment from 1 to 50 and from 50 euro to 100 euro, followed by subsequent amounts (Figure 3).

Figure 3 The sample in relation to crowdfunders’ number (Sellaband)

The different matter, however, compared to the projects analyzed on Musicraiser, is that in this case there are many more investors willing to help with financing higher cutting.
For example, in the case of the cut from 150 to 200 euro, observing the three projects with the greatest number of believers for that class, ie Catself, Hind Public Enemy and it may be noted that the addition, in addition to products in advance, of gadget (T-shirt of the band) or extra (live performance exclusive) has strongly encouraged the supporters, unlike the cut from 200 to 250 Euros, where the number of raiser was lower because the reward offered was similar to that given for the previous investment class.
Believers are to be encouraged to invest for another class of cutting: that between 400 and 450 Euros.
This is motivated by the fact that they have the ability to split shares revenue with the artist and to participate directly in the project, something that proves, once again, the investor wants to feel like an active part of the project.
Focusing more closely on its rewards, we can deduce that, in contrast to the Italian case, also the reward "access to reserved area" appears to be stimulant[2] (for example in the draft Public Enemy, for the class of cut from 750 to 800 euro) .
The raiser, however, continue to prefer as rewards, even in this case, thanks, the pre-sale of products and direct participation in the project, as Figure 4.

Figure 4 The sample in relation to different rewards  (Sellaband)

Ultimately, it can be concluded that using the more detailed analysis of the two reward-based platforms has confirmed a trend that has emerged in recent years in crowdfunding, ie, that the crowds are willing to take part in projects of interest, with small contributions (in most cases) and favoring those rewards can demonstrate how they are active part (for example, the CD, which is produced by their contribution).
There is no longer the artist who creates his CD for itself: its product is the result of sharing with a group that supports him, who believed in his ideas, and that through crowdfunding, come true.

(Nina Passarelli)

[1] I considered just projects with completed datas.
[2] This reward is less incentive for the raiser in relation to other rewards, but compared to the case Musicraiser, these subjects are more willing to invest money to access the restricted area of the artist.

No comments:

Post a Comment