Peter Young Writes For You

This column was originally published in the Central Western Daily on Tuesday 16th March 2010.

Sellaband, the fan driven music website I wrote about in July last year, was declared bankrupt by a Dutch court on 22nd February. A couple of days later, a German company based in Munich bought the company and declared that they would honour all of the investments made by supporters. Launched in August 2006, Sellaband was a revolutionary concept for new musical artists. Bands and singers worldwide uploaded tracks onto the Sellaband website. Fans could listen to the songs for free and then invest in an album, usually the artist’s debut, by purchasing shares or parts at US$10 each. Once an artist had acquired enough shareholders, or “believers”, to raise US$50 000, then the finances would be released to the musicians to record, produce and market their album. In exchange for their investment, fans received a limited edition CD album of their artist. So what went wrong? Despite over forty artists reaching their goal and recording their albums, Sellaband was unable to turn a profit. Even the interest on the millions of dollars sitting in the bank on behalf of the artists who had yet to make their target was not enough to keep the company afloat. In this modern era of iTunes and mp3 files, the traditional album has become a dinosaur. Singles and standalone tracks now dominate the market, as consumers pick and choose the songs they like. Sellaband’s reliance on albums meant that artists had to produce a whole CD of quality tracks, something that even successful mainstream bands and singers often fail to achieve. Once an album was recorded, there wasn’t the opportunity for artists to release singles to promote their CD. Copies were sent out to the investors and little else happened. High quality of acts and artists was also a bugbear for Sellaband. With no-one screening the musicians, anyone could create a profile on the website and receive investments. With 3600 artists listed on the Sellaband website, there were simply too many acts for the general public to peruse and it became extremely difficult for an individual to attract enough attention and investment to reach their goal. Sellaband also encouraged acts to utilise high profile producers, which resulted in well recorded albums but also ate up most of the budget leaving little for promotion. In an attempt to address these problems, Sellaband altered their funding plan in October last year to allow complete flexibility for artists in terms of budget and goal (album, EP, single, music video, etc). They even attracted high profile rappers Public Enemy who aimed to raise US$250 000 with US$25 shares. Unfortunately, these changes were not enough to turn Sellaband fortunes around. The new owners of Sellaband are yet to announce what, if any, other changes they intend to make to the website. It is speculated that they may reduce the number of artists available for investment and steer the investing public towards the most viable and marketable acts. They have, however, released a new set of terms and conditions which doesn’t allow investors to sell their shares and cash out before an artist reaches a goal. For any music fans with an urge to invest in some of their favourite bands, I would suggest they remain cautious and not send any of their hard earned dollars to Germany until the future of Sellaband becomes clearer.