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Business News Digital Management & Funding
PledgeMusic acquisition falls through, administration looms
By Andy Malt | Published on Thursday 9 May 2019
Efforts to keep PledgeMusic in operation have failed after a planned sale of the company fell through. The business will now go into administration, founder Benji Rogers confirmed yesterday.
“I am truly sorry”, wrote Rogers in an email to artists on the platform. “I promised to let you know as soon as I had news either way and I received final confirmation of this just now at the board meeting. The company will go into administration at some point this week or early next which means that any funds received for the assets of Pledge will be distributed to all of the creditors involved. This will include all of the artists who are owed money”.
Rogers returned to the company on a voluntary basis in January – having left his position as CEO in 2017 – to attempt to overcome the firm’s ongoing financial issues, which led to artists not receiving the money that they had raised via the platform. All artist payments were then suspended, pending a deal to save the company.
Last month, it was reported that a potential buyer was still in the process of due diligence – mainly contacting larger labels and management companies to see if they would return to PledgeMusic after an acquisition.
“There have been no good outcomes here and I cannot bear that something that I created to benefit artists and fans has caused so much pain to so many people”, Rogers writes in a blog post on Medium. “I was CEO of PledgeMusic twice, and even though I left for the last time in 2017, I still always felt connected to the company and to the mission. I wanted to be a part of the efforts to get things back on track but it is obvious now that too much damage had already been done”.
However, he added, he does not agree with journalists who have claimed that this shows that crowdfunding itself is untenable. In the early days of music-focused crowdfunding platforms a decade ago, various websites, such as Sellaband, Slicethepice and Bandstocks, all ultimately failed. However, in more recent years, Kickstarter and PledgeMusic have offered some stability for those wishing to raise money for projects independently.
“A failure in execution does not mean that the model is fundamentally flawed”, writes Rogers. “I still believe that there is a great future for fan-funded projects in this industry and I hope that someone builds a new version of, or resurrects what we started. I would gladly help in this effort”.
This will not be much comfort for the many artists now caught up in the collapse of PledgeMusic though. As the company goes into administration, they will all become creditors and be placed in a queue for whatever money can be raised by selling off its assets. With outstanding artist payments estimated at between one and three million dollars, it now seems likely that many will never see the money they are due.
