Business Matters: Are Kickstarter Pledges Taxable Income?
Business Matters: Are Kickstarter Pledges Taxable Income?

Kickstarter Pledges Grow 259% To $99 Million In 2011
-- Of all the numbers shared Monday by fan-centric fundraising site Kickstarter, one stands out: $99,344,382. That's the dollar amount pledged to projects through the Kickstarter platform in 2011. Dollars pledged were up a whopping 259 percent from $27,638,318 in 2010.

Other metrics saw similar growth last year. The number of successful Kickstarter projects (not all projects reach funding goals and are carried out) increased 203 percent to 11,836 in 2011 from 3,910 in 2010. The number of visitors to jumped 269 percent to 30,590,342 in 2011 from 8,294,183 in 2010.

Music was the second highest-grossing category with $19.8 million pledged for both successful and unsuccessful projects. There were 260,178 backers for 3,653 successful projects.

Kickstarter didn't break out how much money was pledged to successful projects and therefore collected by artists, but in the comments co-founder Yancey Strickler revealed that 84 percent of all pledges are eventually collected. Applying the overall collection rate to the $19.8 million pledged to music projects comes out to $16.6 million collected by artists for music projects. At 3,653 projects, that's an average of $4,553 per project.

Now, $16.6 million is a speck in the overall recorded music market. That's not to play down the positive impact these funds play for independent musicians. Each dollar pledged to a successful project means the artist is on the hook for one less dollar. But in a few years, however, after more artists use the platform, Kickstarter's contribution to music could start looking pretty amazing.

All sorts of artists -- and many well-known names -- have used Kickstarter to raise money for projects. Bruce Robison and Kelly Willis are currently raising $35,000 for an album (they've raised $20,367 with 16 days left). The Dirty Guv'nahs raised $35,351 (on a goal of $20,000) from 443 backers to record their third full-length album (that's an average pledge of $79.80). Neil Gaiman and Amanda Palmer raised $133,341 (on a goal of $20,000) for a five-concert tour. The project's 3,873 backers got first chance at tickets for the concerts, and everybody received a recording of the shows (both download and limited-edition CD), a print and a number of other rewards.

Film was the largest category at Kickstarter in 2011 with $32 million pledged. Design was the third-biggest category with $9.1 million pledged for 319 successful projects (an average of $28,779 per project).
(Kickstarter blog)

Rdio Launches In Australia
-- Subscription service Rdio is now available in Australia. After a free, seven-day trial the service costs $8.90 per month (US $9.21) for web-only and $12.90 per month (US $13.34) for web and mobile access.

Subscription services are quickly expanding to new markets. Spotify's debut in the U.S. was its eighth market. It has since launched in Austria, Belgium and Switzerland as well. Rdio branched out to Brazil in November. Not long after launching in U.K., French subscription service Deezer announced in November its plan to expand to 130 countries across Europe, Asia and South America.

Downloaders Pay For Music Apps

-- Tablet and smartphone users who download free apps greatly outnumber users who download paid apps. But music, along with games, appears to be a category people will pay for. Forty-five percent of people surveyed had downloaded a music app in the previous 30 days.

Of that group, 21 percent had downloaded both free and paid apps, while 6 percent downloaded just paid apps. Those may seem like puny numbers, but they compare well to other categories. With 8 percent, games were the only app category that ranked higher in the "paid apps only" category. Most categories, such as news and sports, fell in the range of 2-3 percent.

To no surprise, free apps were far more popular than paid apps. More than half (51 percent) of consumers surveyed by Nielsen said they don't mind advertising in mobile apps as long as the content is free.