Crowdfunding Artists Accuse PledgeMusic of Withholding Payments
Word on the street is that PledgeMusic has fallen into turmoil, refusing to inform either crowdfunding artists or the general public about the state of their finances, and as a result failing to deliver money owed to the artists have broken.
A few days ago rumour broke that not all is well at PledgeMusic. PledgeMusic, for those unfamiliar, is a very popular crowdfunding platform used by many, many musicians the world over. Danny Vaughn, the vocalist of US-based rock band Ultimate Eagles, released a video detailing PledgeMusic’s business model, which includes taking all of the money pledged by fans and holding it until the artist reaches 100% of their goal, and if they do not reach this goal, they do not receive the pledged money. After the goals been hit, PledgeMusic is supposed to send 60% of the goal to the artist the money was pledged to, in two weeks.
Now Vaughn is claiming that not only has he received only a fraction of what he is owed, but that PledgeMusic has been issues of the economical degree for over a year. Take a look at the whole video below.
What makes this development especially noteworthy is that as early as last June, Variety noted that several artists had complained Pledge had fallen behind on their payments, some being owed as much as five-figure sums. CEO Dominic Pandiscia, who stepped down in the October of that year, stated that, “The company has had some difficulty dealing with a larger volume of campaigns. The intention is to add value in every situation, and there is some work ahead to achieve that. With respect to payments, there have certainly been payment delays, but the company has always paid artists and should be completely caught up in the near future. The team has been strengthened and is addressing any concerns as the company grows.” An anonymous Pledge executive pointed the finger on too-rapid growth and forced changes in the company’s payment processing, as PayPal ceased to work with some Crowdfunding companies.
During this time several artists also aired their displeasure in the company. Keith Hagan of the Squirrel Nut Zippers noted that, “The agreement clearly states that you will be paid in full within 30 days of your campaign wrap–After chasing them for about two months we finally got it, but that’s just because I was a squeaky wheel and said I would start talking about it publicly.” A member of a major band who chose to remain anonymous noted that, “Over the course of the campaign I can’t recall a single invoice that was paid to the band or any vendor associated with our campaign that did not require multiple submissions and constant badgering — so rather than putting my full attention to raising money for my band and being fully engaged in the actual campaign, I have spent the bulk of my time fighting to get existing funds out of Pledge.”
So all is, after all, well and Danny Vaughn’s campaign just was sitting very low on PledgeMusic prioritized list of artists that will be paid their due money, and Pledge has been rather slow handling the missing payments. Right?
It appears the situation’s only grown worse. More than twenty artists or their representatives responded to this post, in which Bob Lefsetz reported the service was behind in its payments to Fastball. Some of the posts could be characterized as common complaints, yet more than half of them spoke first-hand of late or inadequate payments and a lack of response from company executives. Meanwhile PledgeMusic has issued a statement of their own,
“We deeply regret that recently we have not lived up to the high standards to which PledgeMusic has always held itself. We acknowledge that many artists have and continue to experience payment delays. These delays to artists are unacceptable — not only to them, but to us.
Mid 2017, new investors came into PledgeMusic with the goal of strengthening the company and improving the value proposition for artists and fans. After substantial investments in the business over the past 18 months, we believe we have made good progress to that end, but it hasn’t been enough. That said, the company has cut its operating expenses nearly in half over the past year. We’ve overhauled key parts of our financial and operating systems, while adding talent to our roster and making enhancements to the platform like our Vinyl Store, D2C artist store-fronting and our data analytics. While the company has made progress, we still haven’t reached our goals. PledgeMusic has been in discussions with several strategic players in the industry who have interest in the PledgeMusic platform. We are evaluating a number of transactions with those potential partners, and we plan to announce details of this in the next 60 days. It is our expectation that payments will be brought current within the next 90 days. We accept responsibility for the fact that we have been late on payments over the past year. PledgeMusic is working tirelessly on this issue, and we are asking our community for their continued support and patience.”
But sources close to the situation have let slip of overspending by and high salaries for previous management, the company moving into a WeWork co-working space from its former expansive offices and staff cuts in recent months. Several artists, including Charlie Faye of Charlie Faye & The Fayettes, have decided against waiting and contacted their lawyers instead.
Whatever the case may truly be things do not great for PledgeMusic and it seems advisable to avoid starting any new crowdfunding campaigns in the meantime.