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.
David Thursday, January 31, 2013
For the n'th time, payments to Kickstarter and similar systems are not 'donations'. They are payments for goods and services to be provided in the event that a funding target is reached.
n' Stuff Thursday, January 31, 2013
Sounds like semantics to me.
Just Another Voice Thursday, January 31, 2013
but is that how they are perceived in general? Perception means everything. ;) <js>
David Thursday, January 31, 2013
If you don't get the stuff you have paid for, you will perceive that as a rip-off. There is a contractual obligation on both sides, and people will come to grief (as some already have) if they forget it.
As a commenter below has pointed out, people sometimes pay substantial amounts just to be credited as contributors, and I agree that in that case they can be regarded as 'benefactors' or 'patrons'. But even in these cases they still expect the product to be delivered, and will be upset if their large contributions are wasted. They won't see it simply as a donation to a worthy cause.
And don't get me started on 'house concerts', which are literally an accident waiting to happen.
LondonMusicMapp Thursday, January 31, 2013
On most campaigns like Pledge Music for instance, there are levels of Pledge from an album CD at $12 which is definitely a pre-sale and an Excecutive Producer credit at $500 which is definitely being paid by a fan who wants to see the project succeed and if not a donation could fall into the category of patronage.
Jeanne Thursday, January 31, 2013
Sorry to say this, but I think most of the whales are mom or dad. (Speaking as a Kickstarter film director's mom!)
Phil Chao Thursday, January 31, 2013
not many kickstarters ever fail to reach their goal. why? because amongst the regular pledges from fans and supporters, are much bigger pledges from the projects own team (using anonymous or personal emails of course) when the project ends, they get their own money back, and that money from actual supporters. win/win! kickstarter is a scam, and it works!
Visitor Friday, February 01, 2013
When it comes to music, only a 28% success rate. Do the math here -
John M. Thursday, January 31, 2013
Where do these percentages come from? It just seems like conjecture, and it's a disservice to folks who actively research these types of things in a serious way.
Visitor Thursday, January 31, 2013
We must shut down the Internet for the good of musicians everywhere
Larry Marcus Friday, February 01, 2013
Credit where it's due: Hany Nada of GGV presented this Whales Dolphins Minnow analogy for the music business long ago including a presentation at Billboard Future Music conference.
ThomasP Saturday, February 02, 2013
Derick was even at Mr. Nada's presentation at Billboard. What ever happened to attribution? Kids get thrown out of school for this type of stuff.
paul Sunday, February 03, 2013
I really don't think Derrick was trying to lift the concept and pass it off as his own. Rather, this was a conversation in a hotel lobby (the Carlton) in which I was jotting down notes, and one in which Derrick used the whale/dolphin/minnow analogy to illustrate his point. If anything, the way I wrote the article may have made it sound as if this was something Derrick invented, but this wasn't the manner Derrick relayed the ideas to me.
I'll let Derrick also respond to this.
Derrick Fung Sunday, February 03, 2013