Crowdfunding music site PledgeMusic takes responsibility for paying musicians late

PledgeMusic, a crowdfunding music site that connects musicians directly to their fans, has taken responsibility for paying its musicians late, owing some artists payments for as long as five months.

The service, which markets itself as a "safe place for supporters’ funds to be held while the project was being produced", acts as an escrow service for musicians and their supporters. It allows fans to fork out money to support albums and merchandise that their favourite musicians produce.

Billboard quoted an anonymous source who said the root of these problems is improper money management where PledgeMusic does not hold money belonging to the artists in a separate bank account and instead invested it back into the company.

“We accept responsibility for the fact that we have been late on payments over the past year,” the company said in a statement to Billboard on 24 January". It expects payments "to be brought current" within the next 90 days.

In the meantime, a long queue of artists is lining up to get paid.

Electro-industrial band ohGr completed their album in early 2018 and sent their digital files to PledgeMusic, but the company became unresponsive about payments. This included money to the band for operating costs, but also to manufacturers for the CDs, vinyl, lyric books, T-shirts and other products fans had pre-ordered. They are expecting US$100,000 on a campaign with payments delayed for eight months, which caused them to delay indefinitely a physical release of their album and not bring any copies on tour.

'90s rock band Fastball are waiting for more than US$21,000. Canadian rapper illvibe earned US$500 on a campaign with all funds going to the nonprofit Charity: Water, but payment took more than five months and he is still waiting on $50 that was missing from the total.

According to Variety, a source close to the situation spoke of the previous management overspending and giving themselves high salaries, and says the company has in recent months fired staff and moved into WeWork, a co-working space, from bigger rented offices.

Unlike other crowdfunding platforms which usually take about 4%-5% commission, PledgeMusic takes a hefty 15% commission but does not disclose the monetary target for the campaign. It also provides a staff member, called a "campaign manager", who has the experience in crowdfunding and the music industry, to advise the musician from conception to end of the campaign.

It has received positive reviews from musicians thanks to this dedicated campaign manager model. Which is a pity because payments are such an important part of the relationship and we are not sure if PledgeMusic can recover from this revelation and breaking of trust of its customers.