The music industry has been in disarray ever since the rise of the illegal download began cutting into profits.

But artists such as Amanda Palmer are pioneering new ways of making music and reaching fans. She raised more than $1.2 million with a Kickstarter campaign to fund second solo album Theatre Is Evil, which was released last September.

Following a much-viewed TED talk about crowd-sourcing and the future of music, she has become something of a poster girl for the brave new world, both showing the way and causing controversy with some of her ideas.

“I have always been a medium adopter of technology,” she says backstage in Luxembourg, where she is showing the keyboard player of her band how to set up a Twitter account.

“My band [The Dresden Dolls] and the internet sort of grew up together. Originally we were just a DIY band in Boston, designing flyers, taking them to the copy shop and posting them all over town.

“In 2000 not everyone had email, but a lot of our fans were students and starting to get their own accounts.”

Palmer made sure she got as many email addresses as possible and started a mailing list, which grew with every concert the band played.

“It created the groundwork for the internet to come,” she says. “The internet has been a one-two punch – not only can you communicate directly with the audience but you have the tools to get the music out there.

“It does mean there’s a signal-to-noise problem – which is the same problem we had putting flyers up. When there are 15 shows happening around town, it’s about getting people to care about your band.

“It’s more involved and deeper than pushing your signal in somebody’s face – someone has to have heard someone at a party talking about you, then have seen the flyer on the wall. It’s the same principle but a different set of tools.”

Palmer’s music has created a strong cult following – from the “Brechtian punk cabaret” of her original band to her more personal solo work.

Lyrical subjects have covered a plastic playmate in Coin-Operated Boy, self-harm in Bad Habit, and the breakdown of a relationship using a shared bed as a metaphor in The Bed Song.

“People come to me and say, ‘When I heard The Bed Song I finally decided to get a divorce,’” says Palmer “When you ask them to pitch in ten bucks to make the next record, their reaction is, ‘You’re an artist who changed my life – of course!’”

Finding a balance

She admits every artist has to find their own solution to getting the vital funding and support for their music.

“When the major labels were in charge, it was an era built on a few truths that no longer hold,” she says. “No one is walking into stores and spending $18 on a record any more to make that system possible.

“Labels are incredibly useful – it’s fantastic to have an office of people working on promoting your music, but it comes with a handful of downsides in that they take your money and don’t necessarily do it the way you want.

“It’s your choice whether you want to deal with that whole negotiation, finding partners who love and understand your music, or whether it is easier to do it yourself.

“Not every artist wants to make phone calls to packaging and distribution companies. Radiohead and Nine Inch Nails tried to do large-scale DIY and they learned there is no single solution.”

Indeed Palmer has teamed up with record labels in Europe and Australia to officially release her Kickstarter-funded album in those territories.

“You can do a lot of it yourself but you can’t do it all,” she says.

There have been recent occasions where she has stoked up controversy through her blogs and interactions.

Dealing with criticism

There was a much-criticised blogged poem about 19-year-old fugitive Boston bomber Dzhokar Tsarnev as police closed in on his hiding place.

And there was the offer to her fans to play with her on tour in exchange for free beer, merchandise and “to hug/high-five you up and down (pick your poison)”.

Among those who lined up against her asking fans to play for free were the Seattle Musicians Union and legendary producer Steve Albini.

“We are only at the beginning of understanding what the internet can do for us,” she says.

“When I get criticised, I look at myself as part of this ongoing communion in which the tools of communication are ever evolving and incredibly messy. I would much rather experiment and get certain things wrong than wait for somebody else to do it for me.”

Earlier this year Palmer was nominated for an MTVU Woodie Award for “using her talents in unexpected and innovative ways, creating stronger relationships with [her] fan base using modern technology, social media, and other creative connections”.

“I’ve always been more than just a musician,” she says. “I do work in the theatre every chance I have. I’ve done three major theatrical productions in the cracks between album releases over the past seven years.

“I have always been an avid blogger – although people now see that as a subset of being a musician. I never wanted to just tour, to live on the road for ever. As I get older, living in a tour bus gets less appealing.

“My prime motivators never change – I love to create art, move people and connect with the people I have moved. It gets back to the Amanda Palmer at 12 years old wanting to put on a play on the back porch.”

Palmer is now working on a book, which she describes as an extension of her TED talk.

“It will be part memoir, part exploration of art and commerce, examining the emotions behind the collision of the two,” she says.

“It’s a dark and scary time for a lot of artists right now and I’m hoping this book will, if not answer some questions, at least pose the questions which will take us into new conversations.”

Palmer’s fans will form part of the process once more.

“I want them to share their stories which I will reprint in the book,” she says. “I’m more like a community organiser than a poet who wants to be locked up in a garret.”

Support from The Simple Pleasure and Jherek Bischoff.