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Business News Digital
PledgeMusic issues new statement over ongoing late-payment issues
By Chris Cooke | Published on Monday 4 February 2019
PledgeMusic has issued another statement as it continues to deal with financial issues that have resulted in the late payment of monies to artists whose fans have pledged cash via the direct-to-fan and crowd-sourcing platform.
It follows an initial statement from the company last month, which was issued as an increasing number of artists went public about the late payment issues and the impact they are having on their own artist businesses.
The payment problems first came to light last year, but Pledge said in October that an executive rejig and new finance system should address the issues. However, that didn’t happen. The company is now looking for a strategic partner or buyer which could safeguard the future of the Pledge business while also assuring that all artists currently owed money would get paid in full.
Apologising again to all the artists affected by the payment problems, Pledge said in a new statement on Friday: “We are in discussions with several interested parties about a potential partnership with or acquisition of PledgeMusic. These conversations, if successful, would lead to a transaction which would allow us to meet all of our outstanding obligations. As a result, we are hopeful that, as long as the company is given some breathing space to operate, a solution to these current problems will be found”.
The statement added that details of these discussions cannot be made public at this time, due to “commercial sensitivities”, but that updates will be issued as soon as there are concrete developments. Many artists and managers with current Pledge campaigns are eager for news as soon as possible, so that they can decide whether or not to call off those campaigns and find an alternative way to take pre-orders and allow fan-funding.
Pledge’s statement also confirmed that co-founder Benji Rogers has returned to the company as a “volunteer strategic advisor”. Rogers hasn’t had a formal role at the firm since last February, but is still often linked to it because he was very much the frontman of Pledge in its early days. Rogers is advising the business alongside his current full time role at music data start-up DotBlockchain Media.
Finally, the statement also confirmed something that Rogers himself had mentioned in a recent blog post, which is that in the future a third-party would hold any monies pledged by fans to an artist’s campaign. Pledge itself would only take its fees out of that fund.
Such a move will be necessary to reassure artists and mangers that, if they set up new campaigns on the Pledge platform, said campaigns will not be affected by any further financial issues at the direct-to-fan company.
Similar measures were widely discussed in the very early days of fan-funding, when artists started using companies like Slicethepie, Bandstocks and Sellaband which – as unproven start-ups – needed to reassure artists and fans that any money collected would be protected if those companies hit the wall.
Pledge’s statement on Friday said that the company was now “in advanced discussions with an independent third-party company to manage all artist funds going forward”.
It then concluded: “The board and management team’s priority remains settling any and all back payments that are owed. We ask for patience. We know that for a lot of you this must be wearing very thin, but we can only reiterate that we are fully focused on making this situation right”.
