Crowdfunding firm PledgeMusic’s imminent administration looks set to get messy, with the inevitable scrutiny of how the company got into a financial hole – and crucially, what happened to the money raised by artists using the platform, who are still owed payouts. UK Music boss Michael Dugher wants the relevant watchdogs to get involved in that scrutiny, too.
Dugher wrote to UK minister Kelly Tolhurst, who has the power to take action in these kinds of situations. “I am writing on behalf of UK Music to ask you to investigate the speculated collapse of PledgeMusic and concerns that it may enter administration and to refer the case to the Competition & Markets Authority (CMA),” he wrote.
“Many musicians across the UK. relied on crowdfunding website PledgeMusic to deliver payments from patrons, to pay for album recordings and other costs. These artists were already enduring long delays in receiving payments. As a consequence, creators who used PledgeMusic’s services are likely to lose money if it goes into administration without resolving its outstanding debts… Musicians should be able to trust crowdfunding platforms to fulfil their obligation of delivering money pledged by fans and supporters.”
This is a key point, and one which may well be taken up by industry bodies and regulators beyond the UK. Uncovering how and why PledgeMusic’s artists have ended up in this position is going to be very important: it’s hard to see a way back for this particular brand even under new ownership, given what’s happened, but the lessons will need to be learned by other crowdfunding platforms, and the wider industry.