Interesting new music industry business model

[Guest Low Roller]

So I was reading one on those in-flight magazines on a recent trip from Poland, and an article caught my eye.

It talks about a website called Sellaband.com which is introducing a revolutionary new way of getting your music published and distributed in a manner not unlike selling shares of your company.

The basic idea is that you upload your music to the website, and regular visitors ("Believers") have the opportunity to invest in "shares" of your band. Each share is $10. Once $50,000 has been raised in shares, the band then gets studio time to record an album which is then given to everyone who invested in your band in the first place.

Three songs from the album are then posted for free on Sellaband, and random visitors who like what they hear can then purchase the remaining tracks a la ITunes.

The profit from website advertising and download sales is then split between the site, the artist, and the "Believers" so in essence, not only are you likely to recoup your money if you "invest" wisely, you may actually make a profit, and obviously the more you invested to begin with, the more money you will make.

I don't know if I explained it right or not, but the idea is pretty sound in theory. Check out Sellaband.com if you want to see for yourself.

[c-towns]

I wonder who owns the site (or is backing it) and if they would "own" the sites content, in turn, owning the artist(s).

[larry_llama]

this is a great idea

c-towns, from their "how it works" page:

At all times during the SellaBand program, you are free to leave. But why would you? If you want to you can sign with any label of your choice. You are free to go, also after you've recorded the CD. The big difference is that you now have a professional product and a whole army of fans behind you. We wish you good luck with your career and perhaps we'll meet again.

Edited October 18, 2007 by Guest

[bouche]

I bet it is owned by the MySpace Murdoch guy.

[ollie]

I don't see this business lasting, or having an impact on the industry. People don't want to pay for something they can download NOW. Why would they pay for something they can't download for a few months?

[Guest Low Roller]

It's called "investing", a gloriously capitalist thing to do.

[Northern Wish]

"Capitalists do it ruthlessly!"

Best shirt at Bluesfest.

[ollie]

It's called "investing", a gloriously capitalist thing to do.

I'll believe you believe it if you actually invest some money.

[larry_llama]

Why would they pay for something they can't download for a few months?

from their "how it works" page:

For the first time fans and Artists can be in business together. Therefore each Artist issues 5,000 so called Parts. Parts cost $10 (plus transaction costs) each. Together Believers have to raise $50,000 to get their Artist of choice in the studio. At any point before your Artist has reached the Goal of $50,000, you can withdraw your Parts and pick a different Artist. You can even get your money back. It's your music. It's your choice.

[ollie]

The "how it works" still indicates to me that a believer (*vomits*) has to wait to get the product he or she has paid for. The fact that they can pull out there money is irrelevant to the wait factor.

[larry_llama]

I think you are missing the point of their model. You are thinking in terms of "Buying a CD" which is not what this is about.

Your $10 is an "investment" in a new band. Same as your money at a show is, or buying an EP from a struggling band even though you can rip it from a friend.

Getting a copy of the "limited edition CD" is a bonus, as is any revenue from future sales.

It is a completely different model that is completely disconnectee from the old idea of make-a-cd-in-order-to-sell-CDs...