Fans and Influencers Bankrolling Artists Directly

In September, I hosted a room in Foster where we brainstormed topics for future Trapital stories. One topic we discussed was influencers and fans bankrolling their favorite artists directly.

It's a timely topic given the growth of artist independence, monetization platforms, and the Web 3.0 era of the internet (especially with NFTs, tokens, and blockchain-related opportunities).

‍Creators using their platform. What if middleweight boxer Canelo Alvarez invested in a Mexican hip-hop artist who will perform alongside him as he enters the ring for his next prize fight?

What if LeBron James starts a record label and features that artist's music in any upcoming SpringHill Entertainment projects?

One of the best examples of this is Issa Rae launching Raedio record label to create music featured on Insecure and other Hoorae media content. It wasn't just an investment. This was vertical integration.

These opportunities were possible before, but it's more popular in the age of influencers, creators, and social networks. Most rising artists want money and growth. Many superstar-level creators and influencers want investment opportunities so they can continue to level up. It's a win-win.

But at the same time, more fans want to bankroll their favorite artists too. They may not have a celebrity's reach, but would still love to show the same level of support. Musicians the highest consumer surplus of any entertainers. That's because their content is the cheapest to consume.

‍Preferred stock vs common stock. For artists interested in this path, the ideal balance is to offer two tiers of investment—a preferred level for the folks with influence and money, and a common level for the non-influencer fans. This could be as simple as crowdfunding a "common" level investment, then signing contracts with the name investors. It can also be achieved with tools like indify, which let investors back artists.

But an ideal place for this is on the blockchain. Artists can create a token and offer buyers two different levels. The most expensive ownership tier is only for strategic investors with an influencer-based value-add to offer the artist. The least expensive tokens can be more passive, but still reward the day-one fans for being part of the community.

Many artists have already launched their own tokens that can enable this. For instance, rock band Portugal, The Man launched its $PTM coin in December 2020. It launched at less than a dollar, peaked at $62.31 in May, and is now trading at $18.64. Here's a chart of its performance:

As someone in the Foster group said, the concept of artist/influencers is similar to the Renaissance era. If an influential figure loved someone's work, they would feature it prominently in their house, church, or similar public venue.

This is the digital version of that. We're still in the early days, but it's an exciting opportunity for those who want to try a more unique path.