Music Ally

Well, that didn’t take long. Fan-funding music firm SellaBand has been bought by a German company, which has already installed a new CEO: Michael Bogatzki.

“From today onwards, the name SellaBand will live on and the new owners intend to keep the spirit of SellaBand and its community alive,” says former CEO Johan Vosmeijer in a statement – words reiterated by Bogatzki, who says “We will continue to advance this fantastic platform while acting in the spirit of the SellaBand community and its founders”. The site will be back online today, claims the statement.

Former co-founder Pim Betist has been talking to Wired’s Epicenter blog about the site’s problems. “The problem is that the business model is not bringing profits. That’s why they’re suffering, and that’s why they went bankrupt, and now they need to let go of the concept.”

Fan-funded music firm SellaBand has issued an official statement, clarifying reports that it’s been declared bankrupt, and claiming that it’s found a buyer for the company who plans to make a ‘fresh start’.

The full statement from CEO Johan Vosmeijer runs as follows:

“On Friday February 19th, SellaBand AG requested provisional suspension of payments (moratorium). This was granted by the Court in Amsterdam on the same day. Yesterday, Monday February 22nd, this moratorium was changed into bankruptcy, with appointment of, Mr Paul Schaink, an amsterdam lawyer, as trustee. The trustee wishes to inform the ‘Sellaband community’ that, apart from a few technicalities, the completion of a transaction with a potential buyer of the business, is to be expected soon, in order to make a fresh start, safeguarding both the rights of Believers and Artists. More news will follow shortly.”

The site’s business model means that there is plenty of interest and concern around what happens next – particularly around money held in escrow that’s been pledged for artists but not yet paid to them.

What’s up with fan-funded firm SellaBand? The company’s website has been down for maintenance for a couple of days, but Hypebot reports that it may have deeper problems.

The company appears to have been declared bankrupt in a Dutch court, although the story is based on translated document titles – it could be more akin to declaring bankruptcy in an effort to restructure finances. A document filed today has the title ‘Uitspraak faillissement na beëindiging surseance op 22 februari 2010′ – or ‘Pronunciation bankruptcy after termination moratorium on February 22, 2010′ when translated.

Either way, it’s not good news for the company – and the impact remains to be seen on bands who’ve been raising money on its site, as well as fans who’ve stumped up cash. Most recently, SellaBand worked with Public Enemy, although recent days have seen media coverage of the band failing to reach its target – something Music Ally pointed out in December.

Click on the image below for the screencap of the court document.

Slicethepie, the “global music filter and fan financing engine” has announced a strategic partnership with UK radio station Kerrang aimed at gaining exposure for new artists. Best of all, Kerrang Radio listeners will get paid to review and rate the acts. “Not only will this benefit artists”, says Kerrang evening show presenter and head of specialist music Loz Guest, “but it’ll make the selection process more democratic, we’re sent literally hundreds of demos each week that all deserve thorough evaluation, and it’s cool that our listeners can now be a part of this!”

The new scheme will be powered by SoundOut which is Slicethepie’s “double blind” reviewing technology, meaning that there’s less chance for the system to be rigged compared to other public music vote contests.

Slicethepie is competing for air with a number of other ‘crowd-sourced’ music companies, including Sellaband - which has Public Enemy frontman Chuck D as ambassador; and Pledge Music which aims to make money not only for the artists, but also for charity.

In October, Public Enemy announced plans to fan-fund their next studio album, using SellaBand’s platform to raise $250,000 in individual donations of $25. It was big news for SellaBand at the time, and renewed proof of Chuck D’s eagerness to explore new music business models. So how’s it doing?

Er… not so well, to be honest. So far, Public Enemy have attracted 916 ‘believers’ on the site, donating a total of $71,625. They reached $50,000 from 700 fans on 21st October just a couple of weeks after the announcement, so the fundraising has slowed down considerably since then. With more than $178,000 to go, that new album may not be on the way anytime soon.

Proof that the fan-funded model doesn’t work? It’s a bit early to say that. Maybe the $25 minimum donation is too high, maybe the band’s fanbase has dwindled more than we thought since their heyday, or maybe people are looking at the huge amount still to be raised and deciding not to bother.

It’s to SellaBand’s credit that we can see this data openly, of course, and to Public Enemy’s credit that they’re trying this model. But it will be interesting to see how they try to reinvigorate demand from their fanbase to get the record made.

UK startup Pledge Music is throwing its hat into the fan-funded ring, with plans to take on Sellaband, Slicethepie and Bandstocks. The company has just appointed A&R guru Malcolm Dunbar as its managing director, working with CEO Benji Rogers on the soon-to-launch startup.

It will allow artists to set the target for an amount they wish to raise, and then ask for pledges from fans in return for incentives including downloads, CDs and gig tickets. The company takes no money from fans until the target is met, says artists retain all rights – recording, publishing, merchandising and live – and says it charges the lowest flat-rate commission out of all its rivals.

The news will increase competition in the fan-funded space, particularly in the light of Sellaband’s recent refocusing of its business model, including letting artists keep their publishing rates and choose the amount they wish to raise. At the same time, every month sees more established artists coming to the end of their label contracts (or, indeed, getting dropped), and thinking about whether to go down the fan-funded route. Interesting times…

Sellaband is a fan-funding website based in Holland. Since its launch in August 2006, SellaBand has coordinated recording sessions for 34 artists or acts who had their albums funded by their fans with over USD $3,000,000 invested so far. This week the company announced that it’ll be funding the next album from Public Enemy frontman Chuck D. We asked Sellaband’s UK head to talk us through how the Sellaband model has changed and what it means for artists and labels looking for a deal. (more…)

Hip-hop pioneers Public Enemy have announced plans for fans to fund their new album – but also take a share of the revenues. The band are working with SellaBand to raise $250,000 in individual donations of $25. Fans chipping in will get a numbered copy of the album, but also a share of the profits – although exactly how this will work hasn’t been announced at the time of writing.

“SellaBand’s financial engine model goes about restructuring the music business in reverse,” says Public Enemy’s Chuck D. “It starts with fans first, then the artists create from there. The music business is built on searching for fans and this is a brand new way for acts to coming to create a new album with fans first, already on board.”

Public Enemy are the first established act to benefit from SellaBand’s new business model, which now allows artists to hold onto their publishing rights, and raise money in different ways to the scheme originally proposed by the site when it was targeting just unsigned artists. The band are one of the more experienced when it comes to digital, having been one of the first to release music as MP3 files.

“Working with Public Enemy is an incredibly exciting way to take the European success we’ve built over the past three years and offer it to stateside bands,” says SellaBand CEO Johan Vosmeijer.

Don’t believe the hype! Oh, except when the hype is about a fan-funded music service, and Chuck D is the man saying it. The hip-hop star has been named as ambassador for SellaBand’s expansion into the US market, and he’s pretty excited:

“SellaBand’s business model takes music to a whole new level by linking fans directly to musicians and leveraging those relationships for the creation of new music,” says Chuck D. “It’s an ‘everyone wins’ solution and is the new, new frontier and will completely redefine the way the music business operates.”

Chuck’s appointment is part of a deal with New York firm BTN Eastlink, which will run SellaBand’s day-to-day activities and co-ordinate partnerships and sponsorships, including the upcoming ArenaFest tour, on which several of SellaBand’s artists are playing.

“SellaBand is at an exciting crossroads in its growth,” says Johan Vosmeijer, SellaBand’s CEO. “By working with BTN Eastlink and Chuck D we believe their insight will help take SellaBand to the ‘next level’ and prove invaluable. An integral part of expanding into the US market is building a world class team and together, this is what we are doing.”

SellaBand’s model revolves around fans investing in bands, who aim to build up enough funds to record an album.

SellaBand has announced a deal with US firm ArenaWorks Entertainment that will give SellaBand’s artists the chance to play at 90 gigs in the US next year, as part of the ArenaFest 2009 series.

ArenaFest isn’t just about music – its events will include sports, gaming, dating and competitions. But each event will now feature two of the artists on SellaBand, performing live. Bands from North America and Europe can sign up at a dedicated section on SellaBand’s website.

However, to get to the second round, bands have to either raise $10,000 in funding from SellaBand users, sign up 200 ‘Believers’ on the site, or achieve the most votes in each week. “ArenaFest is a groundbreaking concept and fits perfectly in the philosophy of SellaBand,” says CEO Johan Vosmeijer. “On SellaBand, fans can find funding, as well as, world wide distribution for their music. The only missing link of the concept was the live element. ArenaFest is the perfect answer to that.”