The rise of fanvestors: A study of a crowdfunding community
First Monday

The rise of fanvestors: A study of a crowdfunding community by Patryk Galuszka and Victor Bystrov

Crowdfunding is an online collective action initiated by people or institutions to gather funds from a large number of contributors, usually using mediation of crowdfunding platforms to facilitate contact and flow of resources between parties. The success of Kickstarter and similar services shows that crowdfunding has great potential. This paper presents an empirical study of the crowdfunding phenomenon. It analyzes the motivation of individuals involved in supporting recording artists with voluntary payments in exchange for equity stakes. Specifically, the paper focuses on the motives driving individuals who use MegaTotal (, a Polish crowdfunding platform, to contribute financial resources to selected musical projects. The analysis leads to the conclusion that individuals involved in crowdfunding are partly driven by motivation that has not been typical of fans in the history of popular music.


1. Introduction
2. Fans in popular music studies
3. Online fandom
4. The crowdfunding process
5. Data
6. Results
7. Conclusion



1. Introduction

The advent of the Internet and digitalization brought about several changes to the music industry. Although these changes have been thoroughly analyzed in academic literature (e.g., Kusek and Leonhard, 2005; Leyshon, et al., 2005; Frost, 2007; Wikström, 2009), the unstable nature of today’s entertainment industries, in conjunction with the emergence of the social networking sites, creates new phenomena that call for attention on the part of researchers. Emerging at the intersection of Web 2.0 and independent cultural production, crowdfunding is one such recently debated phenomenon (Aitamurto, 2011; Ordanini, et al., 2011; Schwienbacher and Larralde, 2012). Crowdfunding can be defined as “the act of informally generating and distributing funds, usually online, by groups of people for specific social, personal, entertainment or other purposes” [1]. This definition mentions various types of projects, but crowdfunding is especially well suited for financing artistic works — e.g., the release of recordings.

Crowdfunding is an interesting phenomenon for a variety of reasons. First, crowdfunding is a viable alternative for artists who are interested in financing their works, but do not have the necessary resources or proposals from record labels, publishers, or other institutions. Second, crowdfunding may be a key element in a new business model for those industries (e.g., the recording industry) where old business models are becoming obsolete due to the development of new communication technologies. Third, crowdfunding poses several questions that are interesting from a purely scholarly point of view, such as how the relationship between project initiators and contributors is shaped and how the legal system affects the effectiveness of crowdfunding. Fourth, crowdfunding platforms are growing quickly. According to industry estimates for 2013, crowdfunding raised almost US$5.1 billion globally [2].

Some of the above issues have been addressed by early academic literature on crowdfunding (e.g., Aitamurto, 2011; Ordanini, et al., 2011; Carvajal, et al., 2012; Schwienbacher and Larralde, 2012), but several gaps remain. One such gap stems from insufficient knowledge on the motivation that drives individuals involved in the process of crowdfunding. In this case, “individuals” should be understood as both project initiators (e.g., artists who seek funding) and contributors (e.g., listeners who pay money to help finance the release of an album).

This paper uses an empirical study of the crowdfunding phenomenon that was aimed at analyzing the motivation of individuals supporting recording artists with voluntary payments in exchange for equity stakes. Specifically, the paper focuses on the motives driving individuals who use MegaTotal (, a Polish crowdfunding platform, to contribute financial resources to selected musical projects. MegaTotal user behavior is examined through the prism of literature on fandom. The analysis leads to the conclusion that individuals involved in crowdfunding are partly driven by motivation that has not been typical of fans in the history of popular music.



2. Fans in popular music studies

The fan is one of the central concepts in popular music studies. Our understanding of the term has evolved. As shown by Negus (1997), Hills (2002) and Gray, et al. (2007), fandom can be analyzed from various perspectives. This section offers a brief overview of two opposing points of view. One sees fandom as being pathological, while the other perceives fans as the creative elite of audiences.

In the 1940s, Adorno wrote about listeners who were manipulated by the culture industry — isolated and distracted by its products. To ease the feeling of isolation caused by consumption of the standardized products of the culture industry, a listener takes part in rituals (e.g., whistling), which makes him or her feel “integrated into the community of ‘fans’” [3].

Adorno strongly influenced discussion on popular music audiences over successive decades. In 1992 Jenson noticed that literature on fandom presents fans as obsessed individuals whose behavior borders on pathology. They are seen as “others” or “them,” as distinguished from “people like us” — professors, students, social critics — or even from more reputable “patrons or aficionados or collectors” [4]. The media reproduce two types of fans, “the obsessed individual and the hysterical crowd” [5]. This corresponds to Adorno’s picture of the popular music listener who is either a person “lost in the crowd, the type of human being ... easily manipulated by the collectivity” or “the alienated, poorly socialized loner in his bedroom” [6].

The shift from perceiving audiences as being passive and manipulated by the entertainment industry to seeing them as being active and, in many cases, imaginative as well as creative, required academic scholarship to go through several phases. A point of view distinctly different from that of Adorno was developed by subculture theorists. They argued that the development of subcultural styles, such as punk rock in Great Britain in the 1970s, should be seen as a response to the inferior class position of certain groups of young people (Hebdige, 1979). Such groups manifested their opposition to dominant culture through style, rituals, and an amateur approach to making music (Hebdige, 1979). Although Hebdige was later criticized for ignoring mainstream listeners, elitism, and male bias (Negus, 1997), his contribution to the analyses of music audiences inspired perspectives that were an alternative to those of Adorno. They concentrate on analyzing how audiences employ the products of the entertainment industry to create their own meanings. They do this not only through the active consumption of cultural goods, but also through the production of fan–made products and the building of fan distribution networks (O’Connor, 2008).

Willis argues that consumption of popular music is creative and produces meaning. He identifies five aspects of creative consumption: listening and buying, home taping, interpreting sounds, dance, and interpreting songs and symbols (Willis, 1990). All these practices are, to a certain extent, independent of any efforts on the part of the music industry. For example, record labels cannot easily foist records on listeners. Some listeners develop extensive knowledge in certain music genres and may become competent critics of the marketing practices of the music industry. Additionally, creative consumption can develop into production — DIY recording, mixing, and music making. These practices are encouraged by the falling prices of recording equipment as a result of which “the hardware and software of consumption have become the instruments and the raw materials of a kind of cultural production” [7].

Similar conclusions are reached by Jenkins who writes that fans “draw raw materials from the media as a basis for new forms of cultural production” [8]. Their creative expression adds new contexts to the act of consumption, transforming it into production, which results in the circulation of fan–written texts, fan–made movies and recordings, etc.

Fiske goes even further stating that “[p]opular culture is produced by the people out of the products of the cultural industries” [9]. He distinguishes three types of productivity by fans: semiotic, enunciative, and textual productivity. By semiotic productivity Fiske means giving cultural products meanings by consumers. Communicating these meanings to others constitutes enunciative productivity. Textual productivity refers to the actual production of texts by fans (Fiske, 1992) — e.g., fan stories, videos, songs, etc. — also mentioned by Jenkins (1992). Since circulation of the effects of fan productivity is currently greatly facilitated by new communication technologies, recent scholarship concentrates on analyzing the emergence of online fan communities.



3. Online fandom

Technological progress has given fans tools they could only have dreamed about a few decades ago. Digital cameras, scanners, digital audio software and recorders, etc. have made it much easier to produce fan texts, while the advent of the Internet significantly facilitated the circulation of fan productions. The following sections of this paper show that online communication methods change not only the production and circulation of cultural products (both fan–made and industry–made), but also the ways in which they are financed.

Baym (2007) notes that fans were present online from the beginning of the Internet and fan–made mailing lists or Usenet discussion groups have existed continuously from the late 1980s. Today, the activities of fans are spread all around the Web — on discussion boards, blogs, forums, artist– or fan–made Web sites, peer–to–peer networks, social networking sites, etc. Some of these activities had their equivalents in pre–Internet times. For instance, a blog is an interactive version of a fanzine, a playlist is the successor to a mixtape, and the exchange of digital files corresponds to trading tapes and home taping (Wall and Dubber, 2010).

Of the several new communication tools used by fans, social networking sites play a special role. On the one hand, they are used by listeners to present their musical tastes to friends and the public with the goal of building online identities (Baym, 2007). On the other hand, they facilitate the fast exchange of information among fans and help popularize artists and fan communities among the general public. Crowdfunding is a very special case of the social networking phenomenon. It combines the advantages of Web 2.0 with the dynamism of fan communities. An attempt is made to show this in subsequent sections.

Recent research into online fandom concentrates on analyzing relations between fan communities and the entertainment industry as well as fan labor. These issues are closely related. On the one hand, fan communities are often based on a “gift economy” (Giesler and Pohlmann, 2003; Scott, 2009) that bypasses copyright restrictions (Pearson, 2010). Fans, or more generally listeners, exchange copyrighted content on P2P networks, which is believed to harm the industry. Additionally, they create works based on copyrighted content (e.g., stories about favorite characters or mashups), which, depending on interpretation, may be considered “fair use” or copyright infringement (Tushnet, 2007).

On the other hand, in some cases the entertainment industry welcomes online manifestations of fandom with great satisfaction as they increase the impact of promotional campaigns conducted by record companies or movie studios (Jenkins, 2006). The borderline between purely promotional activities and copyright infringement is, however, blurred. Content owners approach the issue in different ways. In some cases, fan labor such as remixing or creating online videos is encouraged and facilitated (Hetcher, 2009; Yang, 2009). In others, it is discouraged or strictly controlled (Pearson, 2010). Baym and Burnett show that in the case of Swedish fans, their decision to engage in free labor is motivated by possibilities for forming relationships with artists, helping to “build audiences” for favorite artists, and making “meaningful contributions to a cultural domain” [10]. In general, fan decisions to engage in actively supporting an artist with their labor seems to be easier in the case of individual artists (i.e., those artists who do not have a contract with a record company) or artists who are signed to small independent record labels.

In some cases, fan support may go beyond the contribution of free labor and be based on direct financial support. Belsky, et al. (2010) demonstrate that fans are eager to help their favorite artists in various ways, starting with contributing their time, labor, and promotional engagement (which have a monetary value of their own), and ending with financial support in the form of voluntary payments. For example, Belsky, et al. show that Jonathan Coulton’s fans “organize and promote live shows, promote his music across the Web,” [11] make music videos with his work and pay for digital downloads despite the fact that “it would be easy and legal (because of his licensing practice) for fans to copy and distribute his music without payment” [12]. Thanks to the direct relationship that this artist enjoys with his loyal fan base, Coulton “earns about $90,000 annually from voluntary donations and digital downloads on his site” [13]. Although it may not be surprising that established global stars like Radiohead or Nine Inch Nails manage to convince their supporters to voluntarily donate their labor or funds (Wikström, 2009), it is impressive that the development of such relationships with fans is also possible in the case of less known artists. The argument presented in this paper is that this type of support can be considered a new phase in the development of online fandom and can be demonstrated using the example of crowdfunding communities.



4. The crowdfunding process

Model crowdfunding process

According to industry estimates, there are a total of 2,654 crowdsourcing and crowdfunding sites (see There are significant differences among these platforms. They stem from different models adopted and different conditions under which they operate — e.g., diverse legal and economic environments. According to one classification, crowdfunding platforms can be equity–based, lending–based, reward–based, and donation–based [14]. Despite major variations, one thing that these four crowdfunding models have in common is that they provide an infrastructure for interactions and capital flow from contributors to project initiators.

In most cases, the crowdfunding process consists of several phases common to every project. First, the project initiator registers with a crowdfunding platform and publishes basic project information, including samples of work (if applicable). If the crowdfunding platform allows project initiators to choose the type of remuneration offered to contributors, then it is at this stage that this is decided. Second, the actual crowdfunding phase starts and contributors donate or invest their funds in the project. In many cases the length of the crowdfunding phase is determined by the platform. It may give the project initiator 100 days to reach the financial goal, for example. If the goal is not achieved, then the resources go back to the contributors. Third, if the project reaches the desired sum then it is pursued. This may mean that the artist enters a recording studio to work on an album or a book is sent to a printer. Finally, once the product is ready, the last phase begins. What exactly happens in this phase depends on the model adopted by the platform. The product or service that was made possible thanks to crowdfunding is distributed to contributors free of charge or sold online. In the case of the equity–based model, profits are shared between contributors and project initiators. In some cases, a crowdfunding platform may charge a commission or is guaranteed a share in the profits. The number of possible crowdfunding variants is large.

The process of crowdfunding in the case of MegaTotal

MegaTotal is the oldest Polish crowdfunding platform. It was launched in 2007 and concentrated exclusively on music for the first five years of its existence. MegaTotal implemented changes at the start of 2012. It opened the platform to other types of the projects. The first non–musical project completed at MegaTotal was a book containing interviews with members of the Polish music scene of the 1980s. Despite expanding into other types of products, MegaTotal can still be considered a platform that is music–oriented. Up to 30 April 2014 it helped gather funds for the recording of 105 albums, the publishing of one book, the production of two music videos and organizing of one concert. Eighty–two projects have been completed, while 27 are close to being released (situation as of 30 April 2014). The total value of projects that have been made possible thanks to the support of contributors on MegaTotal is about PLN 680,000 (approximately US$223,000). As far as music projects are concerned, for legal reasons, MegaTotal currently cooperates mostly with beginning or relatively unknown artists (Galuszka and Bystov, 2012) [15].

A typical user’s profile contains tools that are directed primarily at listening to music and contributing funds (see Figure 1).


Sample user profile on MegaTotal
Figure 1: Sample user profile on MegaTotal. Source:


A person who does not intend to provide funds via MegaTotal may consider it as a purely “listen on demand” musical portal that enables the streaming of artists’ works free of charge without the need to register (see Figure 2). Those who contribute to projects have the additional option of downloading the tracks they support.


Sample artist profile on MegaTotal
Figure 2: Sample artist profile on MegaTotal. Source:


In line with the classification presented at the beginning of this section, MegaTotal can be regarded as an equity–based platform [16]. In return for funds contributed to the project, the contributor gets:

  1. A share in the funds contributed by those who invested in the project later (the mechanism is shown in Figure 3);
  2. A share in the profits if the project is completed and consumers purchase it; and,
  3. The possibility of downloading tracks by the supported artist.


Flow of capital between contributors and project initiators on MegaTotal
Figure 3: Flow of capital between contributors and project initiators on MegaTotal. Each contributor’s payments and equity stake is represented by different color. Contributor 1 captures part of the funds paid by all the other contributors. Other contributors correspondingly enjoy proportionally lower capital flows.


Compared to other crowdfunding platforms, the algorithm for the distribution of resources that is employed by MegaTotal may be considered sophisticated. It gives contributors an opportunity to apply an investment strategy that increases the chances of earning a positive return on the investment. Such a strategy is based on investing in the early phases of each project and choosing projects that have a high probability of completion. The existence of such a strategy raises questions regarding the motivation of MegaTotal users. Why are contributors spending their money on MegaTotal? Is the possibility of earning money an important reason for using the platform? These questions are addressed by the research results presented in the following sections.



5. Data

The study was based on data collected using a Web survey conducted in March and April 2011 as well as in–depth interviews with the management of MegaTotal held in October 2011. The survey was sent out to those MegaTotal users who logged on to their account between 1 March 2010 and 1 March 2011 at least once (21,631 persons). Complete answers were provided by 800 respondents. The collected data are not representative of the whole population of MegaTotal users. This is because of the low response rate (3.69 percent) and a self–selection bias. However, a large share of those users to whom the questionnaire was sent were “lurkers” whose behavior is of little interest for the purpose of this study. Active users — those who determine the development of the crowdfunding platform — are the population of interest.

There are several ways of measuring user activity (e.g., money spent on MegaTotal, number of log–ons to the platform, number of forum entries), but they all result in a definition of an active user that is arbitrary. Taking PLN 100 (approximately US$30) spent on MegaTotal as a threshold that distinguished active from non–active users, it turns out that 144 respondents (18 percent of the sample) are responsible for 20.6 percent of all funds invested in the service and 98 percent of spending in the sample. Taking into account all registered users (21,631 persons), 925 crowdfunders, constituting 4.3 percent of the registered users, spent more than PLN 100. This means that funds on this service are highly skewed — large numbers of lurkers and occasional users contribute small sums, while a relatively small number of active users contribute the majority of resources.

In light of this data it becomes clear that the survey attracted a larger share of active users than the share of active users in the whole population of registered users. As a result, inferences based on the questionnaire cannot be extended to all registered users. However, the survey provides insights on the behavior of the most active users.

The questionnaire included 30 questions concerning demographic characteristics (age, sex, education, and income), incentives to invest, consumption and promotional activities, attitudes toward MegaTotal, and attitudes to the music industry and copyright.



6. Results

Table 1 illustrates the ranking of motives to invest in artists, based on user evaluation. “Supporting artists” has the highest rank among motives. The majority of respondents want to be seen as those who help artists release their work. The lowest rank is assigned to the “profitable investment” motive.


Table 1: Reasons for using MegaTotal.
Note: Answers were given on a five–point scale, where 1 meant “not important at all” and 5 signified “very important.” Numbers in the second column are the mean average of responses given by respondents, where n=800.
ReasonMean average
1. Willingness to support artists 3.98
2. Willingness to listen to unknown music for free 3.82
3. Willingness to buy legal (non–pirated) music3.59
4. Way of spending free time 2.77
5. Need to contact other fans 2.54
6. Game/form of competition 2.44
7. Investment 2.34


Table 2 shows a cross–classification of the artist support motive and investment motive. There is a significant positive correlation between the two: the coefficient of correlation is equal to 0.114 and the hypothesis of zero correlation is rejected with a confidence probability of 0.999. We found that all respondents, who claim the investment motive is either important or very important, also acknowledge that the artist support motive is either important or very important to them. Thus, there is an association between the two motives, though the artist support motive is important to a larger number of respondents than the investment motive.


Table 2: Cross–classification of motivations.
Note: n=800.
 Motivation: Investment
Motivation: support artists   Not at all important Rather not important Fairly important Quite important Very important Total
Not at all important 21 1 3 2 0 27
Rather not important 21 9 6 4 1 41
Fairly important 49 19 54 16 2 140
Quite important 75 113 76 52 8 324
Very important 101 53 62 39 22 277
Total 267 195 201 115 33 800


The data presented in Tables 1 and 2 show that the motivation of individuals involved in crowdfunding is complex. The fact that MegaTotal makes it possible to earn money by investing in successful projects plays some role for the majority of respondents, even though the willingness to support artists is the dominant motive in most cases (answers “quite important” and “very important”). Understanding this phenomenon requires emphasizing that the possibility of “investing in music” is something entirely new to music consumers. Throughout the history of popular music, records were bought because listeners liked specific music and wanted to be able to listen to it at home or because they were fans and had a special relationship with the artists, which implied liking the music as well. If they wanted to support their favorite band, they simply bought their records, went to concerts and — in the case of fans — engaged in several types of productivity as described earlier. The possibility of supporting artists through direct donations, not to mention investing in music, was until recently reserved for the few — patrons, the recording industry, the state. Crowdfunding changed these financial dynamics. It gives fans the technological means to support a specific artist with monetary payments. In the case of some contributors this motivation is combined with a willingness to earn money. However, it should be noted that according to the founders of MegaTotal the withdrawing of profits from the platform is sporadic. In most cases “earning money” means reinvesting the resources in successive projects. Even though the mechanism behind MegaTotal has much in common with a stock exchange, contributors differ from stock market investors because of their special relationship with artists or preferences for their work.

There is also a difference between simply “liking the music” and being a more dedicated fan. Table 3 shows respondents’ motivation for contributing to a specific project of their choice. When asked to indicate reasons for investing in a specific project, the majority of respondents chose more than one answer. This shows that contributors are driven by various motives simultaneously when making decisions about allocating resources. Investment motivation is dominated by motives that are typical of music consumers (“I like the music”) and fans (“I want to help artists,” “I know the artists personally”).


Table 3: Reasons for investing in a specific project.
Note: Respondents could choose more than one answer; n=800.
ReasonPercentage of respondents
1. I like the music/I want to download mp3 files 79.13%
2. I want to help artists 52.63%
3. I know the artists personally32.88%
4. I hope that an artist will become a star and I will earn profits 17.00%
5. The record is new and it is possible to get a return on investment quickly 15.13%
6. I hope that I will be able to stay directly in touch with the artists 9.13%
7. The project has a low threshold and the chances of gathering the desired sum are high 7.00%
8. I was inspired by other contributors’ investments 5.13%
9. I was encouraged by benefits offered to top contributors 3.00%
10. Other reasons 2.75%


As mentioned earlier, fans voluntarily engage in promotional activities to support their favorite artists. Respondents’ answers (see Table 4) confirm this observation. It is worth noting that under some circumstances sharing an artist’s tracks online (e.g., on P2P networks or audioblogs) is considered by some to have promotional value, especially for lesser known artists (Krishnan, et al., 2004; Baym and Burnett, 2009). Although MegaTotal concentrates almost exclusively on such artists, respondents rarely declare sharing an artist’s work online. Most tracks that can be shared online are available as free streams on the MegaTotal Web site. This makes it unnecessary to upload content to pirate services. Instead, contributors ready to promote specific artists find it easier to share links to artist profiles on MegaTotal.


Table 4: Promotional support and sharing artists’ tracks on P2P networks.
Note: Respondents could choose more than one answer; n=800. Answers were given on a five–point scale, where 1 signified “never” while 5 “very often.” Numbers in the second column are the mean average of responses given by the respondents. The higher the value, the more popular is the source of music.
Ways of supportingMean average
1. Personally recommend an artist’s music to friends/family 3.39
2. Promote an artist’s music on the Internet 2.69
3. Attend an artist’s concerts2.34
4. Share an artist’s works on P2P networks, hosting services, etc. 1.49


Data presented in Tables 1–4 were further analyzed to explore potential links between the motivation of contributors and their declared behavior. For example, theoretically it would be logical for respondents who declare an investment motive to engage in the promotion of the artists they invest in, as it would popularize such artists and bring profits to them as investors.

Let us consider the relations between these two motives and fan activities and attitudes towards the music industry. These relations are summarized in Table 5. This table presents the values of correlation coefficients and p values of the zero correlation test. If a p value is smaller to 0.05, then the hypothesis of zero correlation is rejected with a probability equal to 0.95.


Table 5: Correlation coefficients and p values for the independence test.
 Supporting artists as the motivation to use MegaTotalInvesting as the motivation to use MegaTotal
correlation coefficient p valuecorrelation coefficient p value
Frequency of buying CDs off–line (how often does a respondent buy CDs in brick–and–mortar stores) 0.12 0.00 –0.02 0.43
Frequency of buying CDs online (how often does a respondent buy CDs online) 0.14 0.00 0.04 0.29
Reason to invest in an artist: Hit song (respondents support a certain project because they believe that a recording will be successful) –0.02 0.53 0.28 0.00
Reason to invest in an artist: Future star (respondents support a certain project because they believe that an artist will become a star) 0.07 0.04 0.34 0.00
Reason to invest in an artist: Know artist (respondents support a certain project because they know an artist personally) 0.21 0.00 –0.08 0.02
Promote MegaTotal artists off–line (respondents personally recommend an artist’s music to friends/family) 0.38 0.00 0.01 0.75
Promote MegaTotal artists online (respondents promote an artist’s music on the Internet) 0.32 0.00 0.04 0.30


Table 5 shows that the motivation for supporting artists is significantly correlated with purchases of CDs both off–line (in traditional stores) and online [17]. The motivation of supporting artists is also significantly correlated with both off–line and online promotion of the artists. Thus, users who claim that they use MegaTotal to provide direct financial support to artists also tend to spend their money on the consumption of music and put an effort into the promotion of artists. Knowing artists personally is significantly correlated with the motive of supporting artists, while the aspirations of an artist becoming a star or a record becoming a hit are not associated with the motive for supporting an artist.

Though these correlations cannot be used as evidence of causal relations, they provide an image of those users who use MegaTotal to support artists: active fans who use their financial resources and labor to support and promote their favorites.

The investment motive has no significant correlation with buying CDs or engaging in promotional activity. However, the aspirations of an artist becoming a star or prospects of a record becoming a hit are significantly correlated with the investment motive: the user, who is motivated by profit, expects that the investment project will succeed.

Though the described correlation structure indicates differences between those users who are motivated by a willingness to support artists and those who are interested in profitable investments, there is no clear distinction between the two groups. Answers to questions about motivations overlap. However, the help motive is important or very important for 75.10 percent of users as compared to 18.25 percent of users who declare that the investment motive is important or very important to them.

In addition to the presented data, the interviews conducted with the founders of MegaTotal as well as analysis of discussions on the MegaTotal forums suggest that the most active users build relationships typical of an online community. Although this claim needs support through additional research, the population of contributors could be subdivided into two groups. The first consists of active users — members of the online community who spend a lot of time on the MegaTotal Web site, invest in several projects, and frequently interact with one another. The second is made up of fans and friends of artists who gather funds on MegaTotal. Most importantly, this group invests in their favorite artist’s project and when it is finished (i.e., it is completed or fails to reach the financial goal) they either leave the platform or join a community of active users and start to invest in some other project. If this supposition is correct, it would mean that the population of contributors consists of the community of active MegaTotal users combined with groups of fans of certain artists who build ad hoc groups of support for selected projects on the platform.

We can therefore form the conclusion that the majority of users become contributors and eventually some become active investors because of their above average interest in music or fandom. We would like to propose that they be called “fanvestors” — a portmanteau formed by contracting “fan” with “investor”. This term properly reflects the nature of the behavior of the analyzed group of MegaTotal users. They like music and favor some artists, but their motivation for supporting projects is more complex. Perhaps what we called “investment motive” should be seen in more than a purely financial context. Taking this perspective, a motive that makes crowdfunding attractive to them is the desire to make — using Baym and Burnett’s phrase “meaningful contributions to a cultural domain” [18]. Exploration of this hypothesis requires a deeper ethnographic study of the phenomenon of crowdfunding, however.



7. Conclusion

The research presented in this paper is one of the first attempts to study the phenomenon of crowdfunding. In contrast to early literature on crowdfunding that evaluated its general usefulness as an instrument for financing (Schwienbacher and Larralde, 2012), this study concentrated on exploring the motivation of individuals who support musical projects on a crowdfunding platform. This distinction is important, as conclusions drawn on the basis of the music–oriented platform may not apply to other types of platforms.

Although differences among the various models of crowdfunding make generalizations difficult, the first conclusion is probably applicable to a range of platform types. Our research on MegaTotal suggests that under certain circumstances crowdfunding platforms can be regarded as a special form of an online community. These circumstances include the existence of a group of contributors who actively use a platform for a long period of time engaging in communication among themselves and with the project initiators as well as the presence of some form of technological infrastructure that makes such communication possible (e.g., forum, message boards, individual profiles).

The second conclusion draws on fandom literature and is therefore limited to platforms specializing in financing the production of cultural goods. It argues that the motivation of individuals involved in crowdfunding musical projects is complex. The dominant motivation is a willingness to help artists, but the investment motive also plays a role. Based on this conclusion, we propose that individuals who are actively involved in the act of crowdfunding be named “fanvestors.”

Exactly what is it that fanvestors do? They do not buy records, or more precisely, they not only buy records. They invest in music just like record labels do. At the same time, however, they do not claim that the act of investing and the promise of earning a profit is their main motivation. Instead, they emphasize their liking of an artist or an artist’s music. Perhaps the attitudes of fanvestors can be compared to those of independent record label owners who decide to release records without market potential only because they like them (Lee, 1995). The difference is that, in contrast to professional record labels, the risk taken by an individual fanvestor is usually low, as are the sums of money such an individual spends on MegaTotal.

What is perhaps even more important is that fanvestors, by investing their money in certain projects, choose records that will be released. Their role is reminiscent of the role of music industry professionals known as Artist and Repertoire (A&R), who act in the record label’s name to find new talents (Knab and Day, 2007). This means that the influence of fanvestors on the music market goes beyond purely buying or consuming records. They use their financial resources to decide who enters the recording studio and who does not. Whether the collective intelligence of crowdfunders will prove capable of finding talents more efficiently than traditional recording industry professionals is as yet unknown at this early stage of development of crowdfunding.

Finally, the third conclusion is that relationships among the parties involved in crowdfunding are the key to understanding the phenomenon. Without a special kind of relationship between fanvestors and project initiators it would be difficult to motivate large numbers of individuals to contribute their resources to the projects proposed on the platforms. Theoretically, a successful project could be crowdfunded by random individuals who are not interested in the project itself, but in the rewards they can get in return for their support. This would mean that crowdfunding should be treated as a purely financial instrument, an alternative to business angels and bank loans. Certainly in the case of some platforms, certain projects, and a part of the contributors, this is the case. In the case of musical projects, however, the motivation that drives contributors is more complex and involves a mixture of fandom, love of music, and prospects of earning profits. There is no doubt that more research is necessary to further analyze the nature of this motivation, its relation to the type and size of the project, and other factors that may affect the functioning of crowdfunding communities. End of article


About the authors

Patryk Galuszka holds a Ph.D. in management from the University of Łódź, Poland and an LL.M. from the Erasmus University of Rotterdam, the Netherlands. In 2007 and 2008 he was a research associate for the Digital Music Education and Training Project. Currently, he is an Assistant Professor at the Faculty of Economics and Sociology at the University of Łódź. His research interests include creative industries, popular music studies, and media economics.
E–mail: patrykgaluszka [at] gmail [dot] com

Victor Bystrov holds a Ph.D. in economics from the European University Institute in Florence, Italy. Since January of 2008 he has been an Assistant Professor at the Faculty of Economics and Sociology at the University of Łódź, Poland. His research interests include finance and econometrics.
E–mail: emfvib [at] uni [dot] lodz [dot] pl



The authors would like to thank MegaTotal for sharing the data and Justyna Jakóbowska for drawing Figure 3. Part of the paper was written while Patryk Galuszka was a visiting researcher at the Institute of Law and Economics at the University of Hamburg. He would like to thank professor Thomas Eger and German Academic Exchange Service (DAAD) for making this fellowship possible.



1. Spellman 2008, cited in Kappel, 2009, p. 375.

2. David Drake, 2013. “U.S. leads world in burgeoning crowdfunding trend,” Forbes (12 April), at, accessed 21 April 2014.

3. Adorno, 1989, p. 27.

4. Jenson, 1992, p. 9.

5. Ibid.

6. Negus, 1997, pp. 10–11, italics as in the original.

7. Willis, 1990, p. 77.

8. Jenkins, 1992, p. 212.

9. Fiske, 1992, p. 37.

10. Baym and Burnett, 2009, p. 443, emphasis as in the original.

11. Belsky, et al., 2010, p. 36.

12. Belsky, et al., 2010, p. 37.

13. Ibid.

14., 2012, p. 13.

15. It should be noted however that in 2013 a mid–level rock/reggae band and in 2014 an acclaimed jazz violinist and saxophonist started to gather funds on MegaTotal. If they manage to complete their projects, other established artists may consider using the platform despite legal issues described by Galuszka and Bystrov (2012).

16. In 2012, after this survey had been conducted, MegaTotal allowed project initiators to propose rewards to contributors, which makes that platform both equity–based and reward–based.

17. Buying CDs was used as a proxy of the respondent’s activity as a consumer of traditional products of the recording industry.

18. Baym and Burnett, 2009, p. 443, emphasis as in the original.



Theodor W. Adorno, 1989. Introduction to the sociology of music. Translated from the German by E.B. Ashton. New York: Continuum.

Tanja Aitamurto, 2011. “The impact of crowdfunding on journalism: Case study of Spot.Us, a platform for community–funded reporting,” Journalism Practice, volume 5, number 4, pp. 429–445.
doi:, accessed 22 March 2014.

Nancy K. Baym, 2007. “The new shape of online community: The example of Swedish independent music fandom,” First Monday, volume 12, number 8, at, accessed 15 February 2012.

Nancy K. Baym and Robert Burnett, 2009. “Amateur experts. International fan labour in Swedish independent music,” International Journal of Cultural Studies, volume 12, number 5, pp. 433–449.
doi:, accessed 22 March 2014.

Leah Belsky, Byron Kahr, Max Berkelhammer, and Yochai Benkler, 2010. “Everything in its right place: Social cooperation and artist compensation,” Michigan Telecommunications and Technology Law Review, volume 17, number 1, pp. 1–65, and at, accessed 22 March 2014.

Miguel Carvajal, José A. García–Avilés, and José L. González, 2012. “Crowdfunding and non–profit media: The emergence of new models for public interest journalism,” Journalism Practice, volume 6, numbers 5–6, pp. 638–647.
doi:, accessed 22 April 2014., 2012. “Crowdfunding industry report: Market trends, composition and crowdfunding platforms” (May), at, accessed 19 June 2012.

John Fiske, 1992. “The cultural economy of fandom,” In: Lisa A. Lewis (editor). The adoring audience: Fan culture and popular media. London: Routledge, pp. 30–49.

Robert L. Frost, 2007. “Rearchitecting the music business: Mitigating music piracy by cutting out the record companies,” First Monday, volume 12, number 8, at, accessed 18 June 2012.

Patryk Galuszka and Victor Bystrov, 2012. “Development of crowdfunding in Poland from the perspectives of law and economics,” In: Jarosław Bełdowski, Katarzyna Metelska–Szaniawska, and Louis Visscher (editors). Polish Yearbook of Law and Economics, volume 3. Warsaw: C.H. Beck, pp. 145–166; version at, accessed 22 April 2014.

Markus Giesler and Mali Pohlmann, 2003. “The anthropology of file sharing: Consuming Napster as a gift,” Advances in Consumer Research, volume 30, pp. 273–279.

Jonathan Gray, Cornel Sandvoss, and C. Lee Harrington (editors), 2007. Fandom: Identities and communities in a mediated world. New York: New York University Press.

Dick Hebdige, 1979. Subculture, the meaning of style. London: Methuen.

Steven A. Hetcher, 2009. “Using social norms to regulate fan fiction and remix culture,” University of Pennsylvania Law Review, volume 157, number 6, pp. 1,869–1,935.

Matt Hills, 2002. Fan cultures. London: Routledge.

Henry Jenkins, 2006. Convergence culture: Where old and new media collide. New York: NYU Press.

Henry Jenkins, 1992. “‘Strangers no more, we sing’: Filking and the social construction of the science fiction fan community,” In: Lisa A. Lewis (editor). The adoring audience: Fan culture and popular media. London: Routledge, pp. 207–236.

Joli Jenson, 1992. “Fandom as pathology: The consequences of characterization,” In: Lisa A. Lewis (editor). The adoring audience: Fan culture and popular media. London: Routledge, pp. 9–29.

Tim Kappel, 2009. “Ex ante crowdfunding and the recording industry: A model for the U.S.,” Loyola of Los Angeles Entertainment Law Review, volume 29, number 3, pp. 375–385, and at, accessed 22 April 2014.

Christopher Knab and Bartley F. Day, 2007. Music is your business: The musician’s FourFront strategy for success. Seattle, Wash.: FourFront Media & Music.

Ramayya Krishnan, Alan Montgomery, and Michael D. Smith, 2004. “The promotional value of peer–to–peer networks,” Carnegie Mellon Working Paper, at, accessed 19 June 2012.

David Kusek and Gerd Leonhard, 2005. The future of music: Manifesto for the digital music revolution. Boston: Berklee Press.

Stephen Lee, 1995. “Independent record companies and conflicting models of industrial practice,” Journal of Media Economics, volume 8, number 4, pp. 47–61.
doi:, accessed 22 April 2014.

Andrew Leyshon, Peter Webb, Shaun French, Nigel Thrift, and Louise Crewe, 2005. “On the reproduction of the musical economy after the Internet,” Media, Culture & Society, volume 27, number 2, pp. 177–209.
doi:, accessed 22 April 2014.

Keith Negus, 1997. Popular music in theory: An introduction. Hanover, N.H.: University Press of New England.

Alan O’Connor, 2008. Punk record labels and the struggle for autonomy: The emergence of DIY. Lanham, Md.: Lexington Books.

Andrea Ordanini, Lucia Miceli, Marta Pizzetti, and A. Parasuraman, 2011. “Crowd–funding: Transforming customers into investors through innovative service platforms,” Journal of Service Management, volume 22, number 4, pp. 443–470.
doi:, accessed 22 April 2014.

Roberta Pearson, 2010. “Fandom in the digital era,” Popular Communication, volume 8, number 1, pp. 84–95.
doi:, accessed 22 April 2014.

Armin Schwienbacher and Benjamin Larralde, 2012. “Crowdfunding of small entrepreneurial ventures,” In: Douglas Cumming (editor). The Oxford handbook of entrepreneurial finance. New York: Oxford University Press, pp. 369–391.

Suzanne Scott, 2009. “Repackaging fan culture: The regifting economy of ancillary content models,” Transformative Works and Cultures, volume 3, at, accessed 20 June 2012.

Rebecca Tushnet, 2007. “Copyright law, fan practices, and the rights of the author,” In: Jonathan Gray, Cornel Sandvoss, and C. Lee Harrington (editors), 2007. Fandom: Identities and communities in a mediated world. New York: New York University Press, pp. 60–71.

Tim Wall and Andrew Dubber, 2010. “Experimenting with fandom, live music, and the Internet: Applying insights from music fan culture to new media production,” Journal of New Music Research, volume 39, number 2, pp. 159–169., accessed 22 April 2014.

Patrik Wikström, 2009. The music industry: Music in the cloud. Cambridge: Polity.

Paul E. Willis, 1990. Common culture: Symbolic work at play in the everyday cultures of the young. Milton Keynes: Open University Press.

Ling Yang, 2009. “All for love: The Corn fandom, prosumers, and the Chinese way of creating a superstar,” International Journal of Cultural Studies, volume 12, number 5, pp. 527–543., accessed 22 April 2014.


Editorial history

Received 30 June 2012; accepted 12 February 2014.

Creative Commons License
This paper is licensed under a Creative Commons Attribution–ShareAlike 3.0 Unported License.

The rise of fanvestors: A study of a crowdfunding community
by Patryk Galuszka and Victor Bystrov.
First Monday, Volume 19, Number 5 - 5 May 2014

A Great Cities Initiative of the University of Illinois at Chicago University Library.

© First Monday, 1995-2020. ISSN 1396-0466.