Sellaband – Update

Yesterday I received an email from Johann Vosmeijer, Sellaband's managing director. Props to Johann for a timely, thoughtful response to the concerns about his company that I, among many others, have been expressing. I'm posting his letter to me in its entirety below the jump, but here are a few of the most salient points:

1) First and foremost, Sellaband guarantees that the artist will receive the rights to his or her masters after the 12-month period expires. I had found Sellaband's language ambiguous on this point, and this greatly clarifies matters. Johan says his lawyers will "double-check" the specious phrasing. I'm happy to hear it. In fact, if I were a Sellaband artist, I'd insist on it.

2) Money invested by believers is put into an escrow account until the band reaches the $50,000 mark. In other words, Sellaband can't touch it.

3) Only the A&R person is assigned to the band. He or she will help the artists decide who they want to use as a producer, what studio they want to rent, who should mix the tracks, etc.

4) Johan justifies the 40 percent Sellaband takes of an artist's publishing income as a necessary expedient to keep Sellaband "free of charge for any artist to use," and points out this is an understandable trade off to make in exchange for artists and believers receiving two-thirds of the site's ad revenue. I'm still leery of this deal, frankly (it seems like a way to cheaply scoop up the publishing rights to a lot of compositions), but I'll take Johan at his word when he says that Sellaband will work as hard as any traditional publisher to exploit its catalogue. In that light, 40 percent doesn't seem so onerous. For those following the debate, I recommend reading Johan's letter, below:

Dear Jeff,

Thank you for comments on the concept of SellaBand. I noticed that you have a number of concerns and I wanted to address them personally, since I really value your opinion. My name is Johan Vosmeijer, I am the Managing Director of SellaBand GmbH. After many years as a record company executive I was approached by a young Dutch kid who had thought up the concept of SellaBand. The whole idea of consumers funding future recordings of young and upcoming artists just blew me away. Especially the aspect of a new relationship between bands and their fans, as well as a unique source for A&R appealed to me. Long story short, I quit my job at SONY/BMG and funded SellaBand.

Here's a few remarks on your concerns.
1. We want Sellaband.com to be as transparent as possible. Therefore the contracts (terms and conditions) are open and everybody can review them.

2. As you mentioned, we've only been in operation for less than  weeks. Already more than a thousand people have registerd themselves as 'Believer' In the coming weeks and months we will add new payment possibilities as well as extra features on the website such as SellaBand Radio and an Artist/Believers discussion forum.

3. We are not a record company and have no ambition to become one. In a recent interview I have compared our platform to a trampoline. We offer you the possibility to jump, but ultimately it is up to the artist and his skilss to see how high they can reach. Having said that, we will offer (free) incentives to artists on SellaBand, as well as career-advice and suggestions of how to improve their styling, profile, music, etc. Again, we will do this free of charge. There will be a free, weekly consult for artists with our A&R-staff. We call it 'Go See The Music Doctor' and they will answer all their questions.

4. If an artist never reaches the 50k and decides to opt out, all the money will be referred back to their Believers. The fans will have the opportunity to a/ support another band or b/ get their money back. The commitment artists and their fans make with each other (which is basically the whole purpose of SellaBand) is to fund a future recording. We regard your 10 bucks as a down payment. If a record never gets made, why would we reward the artist with this money? Instead, everything goes back to the people who bought the parts and not SellaBand. Mind you, all this money is kept on a so called escrew account, guarded by a notary at law and we are not able to touch it. When a band has reached the 50k, the notary will officially transfer it onto another account.

5. All of the 50k will be invested in the recording, manufacturing and distribution of the CD. 30k will be allocated to the A&R-person who will then discuss with the band where they want to record, with who, etc. The only mandatory person to work with is the A&R person. Bands can use our preferred studios and producers but are not obliged to. New Experts will be added on a continued basis. Only toady, Grammy Award winning producer James Poyser has joined our team of Experts. The remainder of the budget will be used for manufacturing (all 5,000 cd's will be numberd and packaged in a neatly designed digi-pack) and distribution. We guarantee that every Believer, no matter where he/she lives will have this personal copy sent to his/her home directly. We see this as the privilige of the Believer and over 10k of the budget is reserved for packaging, stamps and so on.

6. After 12 months the artist will get ownership of the master. I will have our lawyers double-check the exact phrasing in the Title Agreement and have it changed if necessary. Artists will own the master recording free of charge, we have no intention to hold any artist back. The only reason for keeping it in our posession for 12 months is to protect the rights of the Believers. For the recording of this CD, the Band & Believers are in business together, so bands can only start using the master for other purposes after this reasonable amount of time. Mind you, in the regular recording world you are very unlikely to ever get your master back and certainly not for free.

7. On an annual basis we will publicize our advertising income. Again, we want to be as transparent as possible. Newly developed software will allocate the exact sums of money to all parties involved. The basic principle is vety simple: the more your songs get downloaded (again, for free), the higher your share of advertising revenues.

8. Because SellaBand is and always will be free of charge for any artist to use, and because we provide a platform and free services, as well as having your album recorded, we ask 40% of the publishing of the songs - and I repeat, only these songs- you record with SellaBand. 1/4 of the 40% goes to the production team. SellaBand Publishing (currently negotiating deals with several established publsihing companies) will actively promote and exploit its catalogue. Because we give away music for free, will legally fulfill our collective rights obligations and give away 66,6% of our advertising revenues (imagine other music communities doing this), we find it pretty fair to ask for a perecentage of your publishing rights.

9. Again, we want to be as transparant as possible. At any point before reaching 50k both Bands and Believers can opt out at any time. After recording the CD any band is free to go wherever they like, we will not hold them back. The reason I quit my job and started SellaBand is that I was and am totally convinced that this concept can start a music revolution. This is not the solution for the downward spiral in the music industry, but a  possible solution. Nothing more, nothing less.

Comments

[Shazz]

Would be interesting if believers -- who have their band pull out before the 50K -- could decide to keep their pooled money and get behind another band right away, rather than go through the nickle/dime build-up all over again. Perhaps they could have other bands "pitch" them for a period of time? This gives the group an identity, like a true investors' pool.

[Johan Vosmeijer]

@ Shazz

When bands pull out, people can get directly behind another band and don't need to pay any extra transaction costs at all. Actually, you can decide to put your money elsewhere at any time before a band has reached 50K and as many times as you want!
By the way, we will have a Believer forum up there shortly, and a new tool that enables bands to communcate with their Believers directly.

Best,
Johan Vosmeijer
SellaBand

[chuck]

so, how likely is it that bands will ever stop tryign to raise the money? won't many peopel rather leave it there than let down their band? If you realyl cared about this, you woudl allow investors to submit money anonymously - so they could take it out anonymously. aren't you really just earning interest on the money the fans put into the account? Isn't it true that most bands will never reach this absurdly high total? Isn't it true that no matter how they try to get their "favourite producer" you will pressure / con them into taking yours?

It seems to me that the only real advantage of a "regular recording firm" is that they actually promote the bands that they think will do well. sellaband doesn't even bother doing that. why should they. they don't come across as the getting their hands dirty type. It's just a cheap way of getting their hands on cash for no effort.

I would look underneath the white hat they purport to wear, something tells me this is not really about supporting musicians, but lining pockets, using the money, dreams and hard work of young hopefuls. Jsut a new cynical way of doing it.

[Derek]

I have looked at this site and I don't believe that its a scam at all. Recently one of the bands, Nemesea, reached the $50,000 mark. I was unsure about the site, I put in $40 and bought 4 parts in the band. I'll just have to wait and see if sellaband delivers and how much it delivers.

I would like to note that another band on the site, Cubworld, is over the $12,000 mark and several others are over the $5,000 mark. The growth of the site looks better everyday however only time will tell if the sellaband concept is viable or not.

[Jeff Howe]

Wow, Nemesea hit their mark! Good for them. We might need to do a follow-up on Sellaband. Thanks for the tip, Derek. I should say, however, that my point wasn't that Sellaband wouldn't work. I'm more troubled by the notion that it will. I don't like the deal Sellaband offers its bands (specifically, the publishing), which isn't to say I distrust the company's motives; Johann, the managing director. He says Sellaband just wants to give unsigned bands a chance to record with professionals, and that it's a work in progress. I want to believe him. All the more reason to express skepticism now, to serve as a nudge in the right direction.

[Charlie]

The publishing is something i'm also sceptical about. Ok, if a writer does well they tend to sign a publishing deal anyway and in doing agree to split their publishing (over all their future works) with the company. This is on the premise that the company has a good deal of clout to push the songs and also collect on royalties owed. A well-connected company with good resources could do this - how well connected are sellaband's publishing team?

Also, how can anything be legally binding between sellaband and the artist(s) until anyone has formally signed a contract. Surely, it can't with or without the 50k goal being reached. right?!

I'm most concerned about where sellaband's commitment to the artist stops. Is it after the 5000 CDs have been manufactured? Are there any plans for a release schedule or is all this just for the purposes of recording? As many artists know this is only a fraction of the battle involved in breaking an unsigned act.

Think i'll check some more FAQs!

trailmusic@googlemail.com (in case anyone wants to share info)

[Charles]

Personnaly I think Sellaband is a brilliant idea, there's much more in it for bands than any other promotion site like MySpace. Question is though, what is going to happen to the 1000s of dollars that where "invested" in bands that will never make the 50K mark? You can bet that a whole lot of people who have invested in a band, will forget about it or lose interest if that band doesn't make. Some of these believers will "re-invest", but certainly a lot of money will just end up on the Sellaband escrow account, which will never reach the band or return to the investor. If it's true Sellaband can't touch it, what is going to happen to it? And if Sellaband can touch it anyway, they are probably counting on this factor, rather than have all bands reach the 50K mark. I so hope I'm wrong on this last point, as it will probably mean the end of the fairy tale if this comes out.

[sam]

I wish someone would give us money to promote, Id sell. lol
We use myspace to promote our band. whats cool is the automation software out there like http://www.myfriendbuilder.com/ it automates adding friends and emails. Probably not for what you are useing myspace for but it is great for bars and bands.

[Bob Slayer]

Japanese hard Rock & Roll band Electric Eel Shock signs up to Sellaband to finance their 3rd commercially available album (and 6th album in total) through Sellaband...

Sellaband have 21 artists that have reached the 50k and we aim for EES to join them very soon
EES are nearly half way to the $50k in a week
www.sellaband.com/eelshock

EES have previously released albums through labels large and small such as Roadrunner Records.
They have been performing an average of 150 gigs a year around the world since 2002 and toured in over 30 countries...

EES: "We have been watching Sellaband develop for two years and believe that compared to the traditional industry it is a much more artist friendly deal where EES will have control over their own recordings..."

Sellaband: "it is great to see that established bands are joining Sellaband - this concept is not just for new artist but is for any artist..."

This si not the first time Electric Eel Shock have financed their own recordings through fans - previously they set up the Samurai Club where 100 fans paid £100 in return for guestlist for life. the money was used to finance previous release beat Me which was then licensed to several labels including Roadrunner in Japan.

Sellaband raised $5million recently which will be spent on expanding the infrastructure of Sellaband in order to be able to more efficiently support artists internationally. A London office opens in june with New York planned for later in the year.

[shakti]

Anyone from Sellaband want to comment on why users have to pay prior to hitting 5,000 committments. Wouldn't it be easier to get people to committ if they did not have to pay until reaching 5,000 committments? The interest on the $10 committments will not outweigh the increase in the number of funded bands/ad dollars by changing the system to not require prepayment.

[Louis Vuitton Outlet]

Wow, Nemesea hit their mark! Good for them. We might need to do a follow-up on Sellaband. Thanks for the tip, Derek. I should say, however, that my point wasn't that Sellaband wouldn't work. I'm more troubled by the notion that it will. I don't like the deal Sellaband offers its bands (specifically, the publishing), which isn't to say I distrust the company's motives; Johann, the managing director. He says Sellaband just wants to give unsigned bands a chance to record with professionals, and that it's a work in progress. I want to believe him. All the more reason to express skepticism now, to serve as a nudge in the right direction.