I wish I could explain why.
Mercifully this has faded as people have come to accept that crowdfunding is how it is done now.
A link to my current crowdfund for "Thanatos Comes ALIVE Part 1"....
I will use the example I know best--myself--to discuss how it works for a small project. When we did the last record, Portland, I forget HOW much we raised. Somewhere around $2000. A fairly modest amount. People think "hey, I could use two grand!" But the fact is? We don't GET the two grand. The money pays for the expenses, in essence, reimbursing the artist for what it all costs. Since we recorded at Sam's studio we didn't have recording expenses but he lives in Portland and I live in Chicago. I had to get there. Expense #1 (to say nothing of the expenses while I was there). Then there are the expenses related to the actual production of the discs. When I do these by myself I do really bare bones things. Sam is , as many of you know, not into bare bones design! So the discs themselves cost money. Then there is a cost for mastering the disc. Following this there are the costs of the other rewards, the posters, the t shirts. When someone pledges for one of these a big chunk of that goes to the production cost of the item.
I believe we built in a "profit" for ourselves of about $400 each.
We spent AT LEAST 40 hours doing only the recording of the disc. If all we did was that? We'd be making $10 an hour. Pretty good money! Three times the minimum wage!...in 1980.
Of course that isn't all the time we spent on this. Sam had to do the design. I had to write and rewrite lyrics and music. This took MONTHS. I never tabulate the hours I work but if I did we might be getting painfully close to that $3.10 mandated by the Federal Government in 1980.
None of this, by the way, is complaining. It just is how it is. I could not DO music without crowdfunding.
Essentially the crowdfund is like the advance you got from a record company in the old days. You may get to keep some of it but a lot of it goes into producing your "product". I know some people recoil at the notion that music or any art is a product. These are usually people who don't make their living doing either or they are people who already became rich working in these fields. Then you have the luxury of not thinking about every dime.
This isn't to say that I actually think about "what will sell" when I make music. I don't at all. That would be pointless. I do what I do then I try to figure out how to pay for it. And Crowdfunding helps a lot with that.
A final thought here is that crowdfunding is basically a pre-sale. If you can pre-sell something these days it is a huge plus. I could make a bunch of physical copies or release to streaming with no crowdfund. But it would take a long time to recoup what is spent. It is part of marketing, spreading the word and more these days.
STREAMING is also a big part of how it works for us small timers these days. My next rant is going to be about that. And how people who don't do music (and a lot who do) need to reassess streaming as well.
Thanks for reading!