Why SellaBand’s Demise is the Music Industry’s Loss

[Please note that this post first appeared on the Forrester Consumer Product Strategy blog.  Over the coming month or so I will be migrating all of my activity there.  I will soon be posting new information here for you to amend your feeds and subscriptions. Thanks]

Mark Mulligan[Posted by Mark Mulligan]

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Yesterday fan funded band site Sellaband was declared bankrupt by a Dutch court.  This may be ‘just another digital music start up that burnt through its investment money with no proven business model’ but its demise is disappointing.

Semi-pro sites and services are a crucial part of the digital music ecosystem and despite this setback they will grow in importance.  Services like Sellaband, MyMajorCompany, TuneCore, Sound Cloud and MySpace, each in their own way, lower the barriers in the artist-fan relationship. They enable artists to reach out directly to their audiences and develop engaged relationships that make the fans feel a part of things.  The shift from photocopied fanclub newsletters mailed in the post, to active online fan communities is little short of a quantum leap. The advent of social music tools are the music business equivalent of the transition from the stone age to the bronze age.

Of course if you follow my analogy on, there’s still a lot of distance to go before we reach the iron age and beyond. SellaBand wasn’t the first high profile victim (anyone remember Snocap?) and it won’t be the last.

Back in December I predicted strong progress for semi-pro sites and services. And though I qualified my prediction with stating 2010 wouldn’t

“be their year” I didn’t expect SellaBand’s demise either.  I remain convinced of the potential of thesesorts of services and it is crucial for artists and the music industry more broadly that these social music tools prosper. If they don’t then so much of the Internet’s potential remains untapped.

10 thoughts on “Why SellaBand’s Demise is the Music Industry’s Loss

  1. I want to believe this type of thing can work, but I have a hard time given the fact that the average fan is young and fickle. It’s hard enough to get them to put down their cash to buy your music let alone support you through long-term investments.

    I tend to think fund raising service are a better bet. If a band needs to raise money for a record or a tour, I could see fans doing the one-time support, particularly if it netted them something. I just don’t think the average fan, with rare exception, will stay interested long enough to want to be invested in a band in the long haul beyond listening to the music.

  2. Sellaband is a really cool concept but it doesn’t surprise me that the company is failing. Do artists really want to use Sellaband to raise money? It seems like a decent blog with PayPal and Google “Donate” buttons would do the trick for most bands.

    I just don’t see the need of creating an entire site (and company) based on this concept. It seems like in order for a company to succeed, it needs to fix a problem that already exists. What problem did Sellaband fix? Are there significant numbers of fans looking for a site where they can donate money to bands? I don’t know of anyone who is looking for a site like this…

  3. Hi Mark

    Thanks for the heads up for SellaBand where i worked for the last few months…
    There certainly is a need for crowdfunding companies like SellaBand, Slicethepie, Kickstarter.
    SellaBand will restart soon with a new German owner and move further.
    The new entertainment industry will move from a very “Push” driven model, where the old industry and mass media selected the artist to market towards a consumer, to a “pull” driven ecosystem where the direct relationship between Artist and Fan is crucial. The new media and the DIY services around that will facilitate the Artists to reach more Fans. A FanFunding platform like SellaBand takes care of the funding and needs to partner up with other specialist services to facilitate the Artist. So it’s a DIY together Ecosystem that will make it happen. There will be need for “push” marketing as well, and that’s where to my opinion the network and knowledge of the “old” industry is very valuable.

  4. I never “got” Sellaband.

    If you asked me if you could hold on to my customers money until I reached a level where you’d then decide how it was spent I would say . . . uhh, I’m good, thanks.

  5. So You Want To Be In The Music Business?
    Your tools to success depends on the ability to take the knowledge given and apply it! Every artist has the potential for greatness based on talent, but talent is only 10% of the formula. Your music biz will provide you with the tools for success in the business. You will stay informed on issues such as marketing, publishing, contracts, copyrights, downloads and more. Now is a great time to be in the business with the advances in technology and more independent selling outlets. The internet has leveled the playing field for artist globally. So expand your ability to learn the legal and practical aspects of getting your business of music paperwork in order.

  6. I’m looking at SellaBand, but I’m trying to see how it does anything other than make a profit through my work.

    If someone donates to me through SellaBand, I’ve got to play by their rules on how I invest the money, and I’ve got to get the ammount I’ve requested in a certain time, and SellaBand keep 15% of peoples “belief” in me.

    However, by sticking a “Donate” PayPal button on my website, which took me less than a minute to create, I can invest the money as I receive it, work with it how I want, and not have to pay anyone else anything.

    So if I needed, say, $5,000 investment and I used SellaBand, I’d only get $4,250, and that’s before the PayPal fees, however, if I use PayPal directly, I get to keep every penny of it, and only have to pay the PayPal fees….not exactly a tough choice, considering I give all the money raised from my gigs to charity anyhow….

    The irony here is if “SellaBand” truely believes in the people that they allow to promote themselves for funding on their site, then the site itself must fund them, otherwise the entire business model is pure hypocracy.

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  8. Sellaband enable artists to reach out directly to their audiences and develop engaged relationships that make the fans feel a part of things.Thanks for sharing this information with us.

  9. I know this topic has been stale for a while, however I do have some questions. Does anyone know of any bands that have used this service? If so did they find any hidden strings so to speak? I’ve read and reread their terms and conditions, privacy policy, etc and while it mostly seems on the up and up ive also done a bit of google searching and see some things that make me kind of Leary.

  10. The one thing I can say that really worked well for the music industry was the exclusivity of the artists they promote. You can’t just jump online upload a bunch of tracks and boom!! you are now a top selling artist in the industry. Most artists had to pay there dues to get where they are. Many fans don’t have the time or the patients to dig through thousands of aspiring music artists profiles. But when you start picking and selectively choosing who gets in for them, then I believe things will start to change for sites like sellaband.

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