The strange stat comes from Derrick Fung of Tunezy, a startup focused on helping artists sell unique experiences to fans. Tunezy is sort of like Kickstarter, but without the bidding and fundraising part. Which means that Fung has been spending a lot of time breaking down the typical types of contributors on Kickstarter, and figuring out how they behave.
Eventually, Fung started noticing three distinct types of contributors, which he tagged as whales, dolphins, and minnows. Whales are just a tiny minority, but when it comes to donations, they are actually incredibly hefty. “Two- to three-percent of whales contribute about 40- to 50-percent of donations,” Fung told us.
(updated, Sunday, Feb. 3rd: There’s been some misinterpretation that Fung coined these category terms. More likely, the way we’ve written the article makes it sound that way. Fung was more likely using the established categories to illustrate the point…)
Just like Kickstarter, the Tunezy model revolves around superfans, a group that is often more imagined than real. Indeed, panned theories like ‘1,000 True Fans’ focus on the high-paying superfan, but Tunezy is trying to inject some science into that blunt level of thinking. “Not all true fans are created equal,” Tunezy consultant David Hazan, an industry consultant, relayed (Ted Cohen’s TAG Strategic actually advises Tunezy).
So just sell to the whales? Not so fast: as the realities of direct-to-fan marketing continue to surface, artists and companies are realizing that whales usually swim among millions of minnows (or, at least lots and lots of them). “You have to create a gigantic funnel, and make money off the small percentage that will actually pay and participate,” one executive relayed. “That’s really the only way to do it anymore.”
Unfortunately, most artists will never get to the level where any of this matters. Indeed, to get 1,000 recurring, high-paying fans is now regarded as a near-impossible feat, at least for artists that don’t have an existing fan base or significant marketing capital. And the most successful Kickstarter artists so far — Amanda Palmer, Five Iron Frenzy, Murder by Death — already enjoyed strong, supportive fanbases going in.