The stock market for songwriters
Websites are giving bands the chance to record albums - by selling shares in the result. Dan Ilett reports
Danny Bemrose was suspicious when he learned his band had won £15,000 to record an album: "We all thought it was a bit of a joke. Our managers told us to just forget about it and get on with it."
Without his knowledge, his band - Scars on 45 - had a group of internet fans who clubbed together and funded them. Weeks earlier, the keyboard player, Nova, had posted the band's music on a website called Slicethepie (slicethepie.com), which gives artists the chance to make a professional album by asking fans to buy shares in their music.
"Even when we found out we could make an album, we thought it was too good to be true," adds Danny. "If we'd have known it was a genuine offer, we'd have done a lot more campaigning. We've just started recording now."
The music industry is trying to find new ways to make money. Slumps in high-street sales and a rise in internet piracy have caused music labels to rethink their approach at a time when more artists are struggling to get exposure. This has made it harder for companies to take artists to market, but the internet has given bands more control of their public exposure. And not only bands - fans can now get in on the act by buying shares in artists' work.
Sport has just seen a similar move. In November football fans teamed up to buy (in principle, at least) the Blue Square Premier club Ebbsfleet United. They raised £700,000 through the website MyFootballClub.co.uk. In the music industry, Slicethepie and Sellaband (sellaband.com) provide a platform for bands to sell shares in their music.
"It's a really interesting period for artists," says Stephen Budd, head of music production firm Stephen Budd Management. "The power has never been more in their own hands. Now there are more facilities for them to generate their own activities.
"I've been approached by bands from both Slicethepie and Sellaband. It's a very delicate one, though - you can verge on the uncool by doing this as an indie band. The offering has to look right."
Artists who use Sellaband, which has opened a music store on Amazon, search for $50,000 (£25,000) to finance their first album. They upload tracks and, fans, or "believers", decide who gets that money by buying shares at $10 (£5) each.
Johan Vosmeijer, a Sony BMG veteran and director of Sellaband, says: "The bulk of around $35,000 (£17,500) is available for recording. We find the right people to make your music to the right level.
"Once your album has been recorded, fans get a copy and you're in business together. All the profit made is shared equally between the artists, fans and Sellaband."
But with Slicethepie, a UK-based community, the process is different. Artists create a profile on the site, upload their tracks and join an arena. When that arena contains 1,000 artists, reviewers - or "scouts", as they are called - earn between 5p and 25p for rating the songs.
"People are making money for reviewing bands on this," says Ben Allen of Shortwave Fade, a band about to cut its first album after winning £15,000 on Slicethepie. "Some are doing it as a day job, and are taking a few hundred quid a week home.
"The songs are voted for anonymously. The scouts don't know who they are voting for so it's based on the music, not the bands."
Bands who are liked go forward to the next stage. Music fans can then buy shares, or "backstage passes", which give them access to the artist and the recording process. If the artist hits the £15,000 goal, they release an album and Slicethepie takes £2 for every sale.
"We're a financing engine for the music industry," says David Courtier-Dutton, Slicethepie's chief executive officer. "We're turning the industry financing into a stock market so people can share the success of it."
Selling shares in music is catching on. So could we ever see a day when all music is pre-financed? "That would be an extreme situation and I highly doubt it would ever happen," says Courtier-Dutton. "But the current industry model is based on an economic level that is broken. There's less money to be made now. Whether this is the right economic model, only time will tell."
That broken model has given the record giant EMI reason to change. It has announced staff cuts and promised to invest more in scouting for new talent. If such a trend catches on, could that mean bands won't have to work as hard to finance themselves?
"The proof is in the pudding with this," says Budd. "It really remains to be seen what effects this will have."
But fan-funded music is here to stay, says Slicethepies's Courtier-Dutton. "There is a lot of scepticism whether that is a good thing to do. A&R is hugely inefficient. I suspect [EMI] knows what it's doing, but it might not.
"You have EMI trying to change the industry at one end, and the likes of us at the other. By the time it's all over, we might all be in bed together."
Fan-funded albums are an old idea. Marillion has sold albums to fans, who paid in advance of the recording. There are websites that give bands more power to sell their music - Amiestreet.com, for example, allows unsigned music-makers to sell their tracks online. But share-based schemes seem to be growing as Sellaband is now signing one artist a month.
Yet some musicians have criticised the share-selling model, arguing if an artist can attract enough fans by themselves, do they really need to sell shares in their music?
"It's true, but most people can't get hold of $50,000," adds Sellaband's Vosmeijer. "There's a development in that now we're getting emails from established artists.
"One old UK band wanted to sign up for its 30th anniversary. And there's a US singer who's made five albums with Warner. She's getting her lawyers to do one last check of the contract with us."
Music is the new venture capital, it seems.
Dan Ilett, Daily Telegraph 26.01.08
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