Crowdfunding in the Culture Sector: Adoption, Effects and Implications

The culture sector is experiencing several challenges such as cuts in public funding and increased competition for donors and sponsors. Crowdfunding - obtaining funding from large audiences, where each backer provides a relatively small amount - has therefore become a promising new business model for realizing cultural productions. Despite its growing popularity, research dedicated to crowdfunding in the culture sector remains limited. To address this gap, the current project seeks to explore three important themes largely absent from the existing literature. First, we explore what influences the artists’ adoption of crowdfunding as a channel for fundraising. Second, we study how successful crowdfunding experiences influence artists’ long-term economy, reputation and aesthetic practices. Finally, we look on the implications of crowdfunding at a sector level, in particular how crowdfunding influences traditional funding mechanisms and artists’ aesthetic practices in general. To unpack these themes, the project carried out several rounds of data collection, including quantitative and qualitative studies. Among other things, it collected data from 177 Norwegian performing artists through an online survey to assess their attitudes and intentions to use crowdfunding. In addition, a similar survey was conducted in the UK (278 respondents) and Brazil (202 respondents), so that crowdfunding trends could be compared across different contexts. CROWDCUL also analyzed all crowdfunding campaigns initiated by Norwegian artists on two main platforms Kickstarter and Bidra in the period 2016-2021 (545 campaigns in total). Several rounds of in-depth interviews were conducted with Norwegian and international artists to explore how crowdfunding has influenced their artistic practice and career development. CROWDCUL's findings demonstrate that crowdfunding can play many roles in the culture sector. In addition to being an alternative source of financing for artistic projects, it has several non-monetary benefits such as the opportunity to establish closer ties with the audience, increased exposure, and reputation building. Several artists use crowdfunding as a business model for their commercial activities, and it can serve as a good starting point for establishing artists to develop their careers. However, there is still skepticism about the crowdfunding concept in the culture sector, and there is a need for more understanding of the long-term non-monetary effects of crowdfunding, especially related to co-creation and social networks. It is important to mention that artists' intention to start a crowdfunding campaign is influenced by their expectations of what they will achieve through it. It is also dependent on their previous experience with crowdfunding and encouragement from close social circles. There should therefore be more focus on improving communication towards artists about the benefits of crowdfunding, preferably through profiling successful campaigns. This can help to create positive attitudes towards crowdfunding through examples and at the same time strengthen the legitimacy of the practice in the culture sector. Finally, the cultural policy instrument apparatus can contribute to the increased use of crowdfunding by offering training, such as practical courses for artists. Another option that can be considered is measures such as ‘match funding’ (gift reinforcement schemes) which can, among other things, signal social acceptance of crowdfunding. Disseminating crowdfunding knowledge in the culture sector was one of the goals of CROWDCUL. Several seminars and conferences were organized for artists and other stakeholders from the culture sector. The project held a launch event in May 2021 at a digital conference “Crowdfunding for the cultural and creative industries in Norway” with several participants from the culture sector. A closing conference “Sustainable Financing for the Cultural and Creative Sector” was organized in December 2024 in Kristiansand (together with CreaTeME – Centre for Excellence in Creative Use of Technologies in Music Education at the University of Agder) where artists were invited. In addition, we held several international seminars for artists, including one in Brazil (Belo Horizonte) in 2022 and two in Bangladesh (Chittagong and Dhaka) in 2023. The knowledge generated by the project is valuable for not only the academic community, but also other actors such as artists, crowdfunding platforms, public authorities, and public and private agencies providing financial support for artists. Moreover, the increased use of crowdfunding has broader societal effects as it leads to higher cultural diversity and democratization of the culture sector. Citizens get the opportunity to express their cultural preferences and help to realize cultural projects that otherwise would not be possible due to the lack of financial resources. Crowdfunding also allows artists to engage more closely with audiences.

The CROWDCUL project contributes to the limited research on the role of crowdfunding in the culture sector by addressing three previously under-investigated themes. First, it analyses the determinants of crowdfunding adoption by artists. Second, the project investigates the short- and long-term effects of crowdfunding on artists’ economy, reputation, and aesthetic practices. Finally, CROWDCUL addresses the implications of crowdfunding at a sector level. In particular, the following outcomes are accomplished: • New insights into artists’ motivations and barriers to using crowdfunding for financing their projects. The project identifies that artists' intention to start a crowdfunding campaign is influenced by their expectations of the campaign’s outcomes, their previous experience with crowdfunding, and encouragement from close social circles. This knowledge is highly useful for developing relevant measures to boost crowdfunding intentions among artists. • The increased knowledge of how crowdfunding may influence artists’ economy, reputation, and aesthetic practices. CROWDCUL demonstrates that artists may use crowdfunding as a business model for their commercial activities, and it can serve as a good starting point for establishing artists to develop their careers. • The knowledge created in this project also contributes to understanding the role of new digital economic frameworks such as crowdfunding in the culture sector. Specifically, the project shows that crowdfunding is not only a monetary tool. Its potential lies in co-creation possibilities and social networks, which may lead to non-monetary benefits such as establishing closer ties with the audience, increased exposure, and reputation building. • Recommendations to the stakeholders in the culture sector (e.g., policymakers) on how they can further support the use of crowdfunding. The proposed measures include improving communication towards artists about the benefits of crowdfunding, practical courses for artists, and ‘match funding’ (gift reinforcement schemes). • Greater knowledge about crowdfunding among the artists and other stakeholders in the culture sector both in Norway and abroad. The CROWDCUL project contributed to disseminating crowdfunding knowledge through seminars and conferences for artists and other stakeholders in the culture sector, including several international seminars (Brazil, Bangladesh). In addition, the long-term societal impact of the CROWDCUL project would be the democratization of the financial market in the culture sector. This democratization process will further facilitate cultural diversity and freedom of expression which are highly important for society.

The culture sector experiences a number of challenges such as cuts in public funding and increased competition for donors and sponsors. At the same time, increasing digitalisation and emergence of alternative pathways circumventing traditional intermediaries brings new opportunities for self-production and self-release of artistic content. Crowdfunding - obtaining funding from large audiences, in which each backer provides a relatively small amount, instead of raising large sums from a small number of large investors and backers - represents a promising development in this regard by suggesting a new model for realizing a broad spectre of cultural productions. Despite its growing popularity, research dedicated to the role and impact of crowdfunding on stakeholders in the culture sector remains limited. This is surprising as crowdfunding may have critical influence on the balance between the commercial and non-commercial, the popular and the alternative artistic expression, aesthetic practices both online and offline, as well as the very structure of cultural funding. To address this gap, the current project seeks to explore three important themes currently either completely or largely absent from the existing literature. Instead of focusing on the success factors of crowdfunding campaigns mainly addressed in the previous literature, we shift the attention to fundamental questions about processes before and after crowdfunding practice. To do so, we focus on the following: identification of the factors influencing adoption of crowdfunding by artists (pre-campaign), the short- and long-term impacts of successful crowdfunding experience (post-campaign), and their implications at a sector level for aesthetic practices and traditional funders of cultural productions. This novel research agenda will be studied in Norway and can serve as a basis for replication studies in other national contexts with different traditions and institutional environments in the culture sector.