Is rock’n’roll the new venture capital? For bands slogging round pubs and
clubs, “financing” used to mean a mate moving through the crowd with a hat.
But now two web-sites – think MySpace with moolah – are inviting fans to put
their money where their mouths are. You’re raving about a new artist – why
not invest in helping them to make an album?
Sellaband.com and Slicethepie.com
are online talent shows, both with a Blue Peter totaliser approach to
fundraising. To grasp their differences, consider this horse-racing analogy:
if Sellaband is the syndicate that owns an animal, Slicethepie is
spread-betting on the Derby. In each case, seeing whether your tip proves a
thoroughbred or an old nag is half the fun. The advantage for bands is that,
theoretically, the cash comes with fewer strings than a conventional
record-company advance.
Sellaband, founded by Pim Betist, an Amsterdam businessman, and two former
Sony BMG executives, celebrates its first birthday next week. About 5,000
acts have signed up, and almost $1m has been raised, from about 13,000
investors, or “believers”, as Sellaband calls them. The aim is to provide
bands with $50,000 to fund a professionally produced album. So far, seven
artists have reached that target, ranging in styles and geography from Dutch
goth (Nemesea) to Kiwi rap (Maitreya) and Hawaiian pop (Cubworld).
Musicians upload three demos, and issue 5,000 shares, or “parts”, costing $10
each. Browsing fans can listen for free, then buy as many “parts” in as many
acts as they wish.
Believers may switch bands or withdraw their money before $50,000 has been
raised. After that, however, they must commit.
About 60% is spent on recording with Sellaband’s roster of producers, the rest
on CD manufacturing and distribution.
Believers earn returns in several ways, but mainly from a $1 commission on CDs
sold via their personal Sellaband “shop” and by splitting one-third of the
advertising revenue gained during the 12 months a funded act is on the site.
Sellaband will look like a friendly society, however, when Slicethepie’s
“trading exchange” goes live later this month. The UK-based site, which
began in June, will issue 15,000 “contracts” – tradeable bets on how many
albums will be sold in a two-year period – in each artist it supports.
People who have already invested can buy them for 50p each; speculators, who
only participate in the exchange, for £1.50 each.
“The music industry is driven by rumour and expectation, which is likely to
move the price of a contract,” says David Courtier-Dutton, Slicethepie’s
chief executive. “What you make will depend on how much you play with. If
you’ve invested £1,000 in an artist who sells a million albums, you’re
talking big money; but £15 might make you a couple of quid a day, and that’s
fun as pin money.”
In creating an alternative investment market, Slicethepie is hothousing its
assets. Artists post three tracks online that are “scouted” by fans, who are
paid up to 25p per review, depending on how perceptive they are. The 20
best-rated acts proceed to “the showcase”, where they have two weeks to
raise £15,000 in fans’ pledges (the minimum being £15). All are paid £50 for
getting that far, which is handy, as bands must soon pay £20 to join. If
they fail to gather enough pledges, they can start again, armed with
detailed feedback.
When Slicethepie is fully operational, it will accommodate 1,000 bands in “the
scout room”, so the wheat will certainly be separated from the chaff.
Currently, it has 600 acts in its “launch arena”, but the plan is to
organise the site by genre. For example, 700 artists are ready to enter an
urban/R&B arena, Courtier-Dutton says. Also, if veterans who have fallen
out of favour with record labels want to make a comeback, Slicethepie offers
a means for fans to cough up – T’Pau and Jesus Jones, take note.
Artists who secure the £15,000 must deliver an album within six months, but
Slicethepie gives them discretion over their spending – it probably
shouldn’t let the self-medicating Happy Mondays get involved, then. So, if
an act already have tracks they’re pleased with, they could finish the album
and use the surplus money for promotion. Though Slicethepie has contacts
with producers and is able to offer advice, it isn’t in the business of
management, unlike the far more hands-on Sellaband.
“We work on the self-regulating assumption that if your most fervent fans fund
your dream album, you’d be incredibly stupid to throw that money away and
disappoint them,” Courtier-Dutton says. Rikki-Lee, vocalist of the Reading
rock screamers the Skies, the third band to be financed by Slicethepie,
agrees: “As much as we’d like to go to Bermuda, to shit on your fan base is
the worst thing you could do.”
That these sites harness “the wisdom of the crowd” to pick winners is modishly
“web 2.0”, but leveraging from fans’ wallets isn’t so novel. The 1980s
hang-overs Marillion have already asked their followers to subscribe to
albums in advance, and some analysts say such “crowdsourcing” is just
preordering with bells on. Well, it depends what rings your bell. Both sites
promise “interactivity” with bands, and having a flutter could appeal to
many fans, though racegoers will know that the bookies do best of all.
Sellaband takes $2 of every $10 CD it sells, plus a third of advertising
revenue. It also retains 30% of the publishing royalties on Sellaband-funded
albums “for the life of the copyright” – a tidy little earner. Slicethepie,
with fewer overheads, given its download-only distribution, should do even
better, taking £2 of each album sale (based on the iTunes price of £7.90)
and earning a 2%-3% commission on every “contract trade”.
But Rikki-Lee believes that bands are getting a good deal. “An advance from a
label is a glorified bank loan that you’ve got to repay one day,” he says.
“We’re still unsigned, but we own all copyright, and the money is ours. I’d
be lying if I said I didn’t want to be signed, but the appeal of a major is
all about the name and the marketing budget.”
It’s too soon, then, to say these sites are nailing anyone’s coffin. In fact,
they could even give larger labels a new lease of life. In a declining
market, the majors are increasingly risk-averse, and finding new talent is a
costly gamble. If Sellaband and Slicethepie can unearth credible acts with
such committed fans, the big bucks – and all their media buying power – may
come calling. Equally, doit-yourself fundraising might turn niche bands into
serial entrepreneurs, as long as they can stand out from the other
crowdsourcers.
Debut albums constitute the majority of this year’s Mercury prize shortlist.
The law of averages suggests some Sellaband and Slicethepie artists will
have hits with their first records. Chances are, though, your pet sounds
won’t make you a fat cat of the music world. If an act you supported in
their early years do become the next Coldplay, however, you should have more
purchase than most on that password of after-show parties everywhere: “I’m a
friend of the band.”
Sellaband’s first-birthday gig is streamed live from the Paradiso, Amsterdam,
on Aug 16 via www.fabchannel.com
It rests its head on your shoulders and whispers in your ear
this is abserd!
the new artist cattle treated as stocks for people to invest
let the two sites work against each other for long enough and we'll see the bands and fans that have invested both time and money into these scheme make a loss
Matt, Staines, UK
@cartel
You don't have to use sellaband's producers if you don't want to. And i believe that you can put your songs on both sides, until one of them pays of i guess.
Sisko, randstad, holland
Yes, I defintiely think it's a good thing for the artists that these sites have launched.
THough as an hip hop producer who is bent on creating his own sound, I have no use for Sellaband's producers and have choosen to put my group, Full Fam, up on SliceThePie
Cartel, Long Pond, , USA/PA
Well i think it the best thing to happen to the music industry.It gives a creative opening to new bands and will help to bring more interesting talented musicians and music who otherwise would be struggling to finance a album .Well done.
jackeehughes, malaga , spain