Crowdfunding And Social Networks In The Music Industry: Implications For Entrepreneurship

Abstract

With the development of new communication technologies and the unstoppable increase of social networks some microfinance platforms are becoming essential tools for entrepreneurs. This phenomenon is known as “crowdfunding”, “crowdfinancing” or “crowd sourced capital”, what mainly implies that entrepreneurs obtain the funds or capital through a collective cooperation usually via a web platform. For social networks this process is based on the trust of many promoters and communities of interest that pool together their money for supporting projects or initiatives. Despite these crowdfunding activities occurs for any variety of purposes as different as political campaigns or creating open source software in this paper we are going to focus on the role for music industry. For musicians and music promoters crowdfunding is being used as a mechanism for putting into the market their creative work (records, video clips, concerts and other promotional releases. Therefore, in this paper we are going to study the origins, concept, and models to finally show an example for the music industry analyzing the concrete case of a well-known Spanish platform.