Survival of the Fittest in the New Music Industry

Bands are cutting costs, touring more and getting creative to make up for falling album sales.

The new rules of the shrunken music business begin in the studio, where recording budgets, especially for new and indie acts, have been slashed. To get around diminished budgets – or labels altogether – some bands have begun turning to Kickstarter, the "crowd-funding" service that lets musicians pay for recording costs by way of contributions from fans. (The site also helps fund movies, video games and other creative endeavors.) On the site's music category, fans have contributed an average of $25, according to a source at the company, and bands have been able to raise in the area of $20,000. In return for their investment, fans receive autographed records, concert tickets and other memorabilia. Record sales were never a major income generator for musicians, thanks to high recording and promotion costs that were charged against the artists' accounts. In the current climate, they're even less of a factor.