Far From Epic Things — Pledge Music Woes Continue
It has now been a couple of weeks since writing this article. Benji Rogers has now posted an update on his personal medium page.v Unfortunately the inevitable has happened. Pledge Music will shortly be placed into administration. This would suggest that artists owed money are unlikely to recoup their losses.
Today marks the 2 month anniversary since the last Pledge Music status update regarding the current debacle (This post was scheduled to go public at the exact time, to the minute).
A bit of background
Pledge Music is a direct artist to fan marketplace. Its promise? To bring artists closer to their fans. Artists would gain the freedom to fund and have complete control over the creative process. for helping fund the project fans would receive a digital copy of the work in question as well as regular updates throughout the recording process (or creation process). Not only this but fans would also have the opportunity to purchase unique versions of the records, or maybe even one off memorabilia or experiences unavailable elsewhere.
For many, this fast became a fan favorite and all looked well.
Over time, Pledge Music would start to adapt their business model. Instead of having a minimal number of campaigns running with said unique experiences and memorabilia, Pledge Music started to run more and more pre-order style campaigns to the point this fast became the norm.
In mid 2018 artists and the media started to report potential issues within the Pledge Music Eco-system. Artists began to report that funds were not being released on the dates promised (funds are meant to be released in set mile stones throughout a campaign). Although campaign managers were initially responsive, the company as a whole were being evasive and failing to meet the pre-agreed deadlines.
On January the 24th Pledge Music released a statement suggesting that payment issues were merely delays in the system and were being addressed. A week later a further update was released. This time Pledge Music made reference to the fact that talks were in place to either partner or be acquired by 3rd parties as well as “advanced discussion” with a third party in relation to independently manage artist funds. 3 months later neither of which have currently materialized
The last update on the 15th of February simply stated that any communications would only be carried out using their internal ticketing system.
Beyond these updates, Pledge Music have refused to communicate over the issues. Neither responding to Tweets, Facebook posts or (reported by some) internal ticket requests. The only communication that has materialized from within is from Benji Rogers who was the previous Director of the company and who has returned as a consultant during the crisis.
What Has Happened Since
Despite the lack of communication from Pledge Music, some information has surfaced.
Pledge Music is currently almost 6 months late in providing their accounts submission to Companies House. This is a legal requirement for any company within the UK and can result (at the very least) in fines dependent upon how late the accounts are and the reason for how late they are.
Reviewing the filing history it would appear that accounts were also filed late in 2016 and 2017 albeit only 2 months late.
Perhaps these late submissions are indicative of the issues that Pledge Music were facing.
On the 18th of February, Pledge Music filed a charge with Companies House. Within the UK there is a legal requirement to inform Companies House when a registered organization takes out a loan. These are equivalent to mortgages and are backed by assets the company owns. Although we can see that a loan agreement was filed on the 12th of February (and Companies House informed on the 18th), what we cannot see is how much this is for, or the purpose of the loan.
Some have conjectured that this may have been to pay severance payments to staff. This brings us onto:
There have been numerous reports from artists, that staff have left Pledge Music. Due to the lack of communication from Pledge Music, it is hard to gauge if anyone still officially works for the company. LinkedIn indicates that 37people (when I first looked into writing this article 2 weeks prior there were 40 showing) who are LinkedIn users, work for Pledge Music, however, upon reviewing these, some are actually listed as investors while others have numerous current employers (needless to say some may not have updated their profile) or are even artists who have used the platform in the past.
Regardless of how many still work for the company, the employees that artists would be aware of leaving are likely to be the campaign managers who were their liaisons within the company. If these employees have left there is little wonder tickets are not being actioned and answered.
In mid-March Music Week posted an article entitled “‘It’s wreaked havoc’: Artists speak out amid uncertainty about PledgeMusic”. The article touches on many facets of the ongoing saga however 1 particular element caught my eye. Music Week referenced the following tweet:
Whether intended or not the implication being that if Pledge Music face too much criticism, the company will not be sold and artists will not receive their funds.
Joshua Sason, a member of the board and one of Pledge Music’s largest shareholders has been charged with fraud in the U.S. Joshua Sason has been a director of Pledge Music since September 2015. Although this fraud charge is unrelated to Pledge Music, it will do little to quash any jitters artists and fans have over the fate of the platform.
The Future For Pledge Music
As things stand it is hard to imagine a future for Pledge Music. If rumors are true and putting the pieces together, an organization that has little staff, dwindled goodwill, loans stacked up against assets and a large amount of money owed to their clients has little value. Hyperbot has suggested that artises are owed in the region of $1–2 Million suggested but I suggest this is a conservative estimate, especially when coupled with reports from bands such as Queensryche ($70,000) and ohGR ($100,000).
The ongoing saga has soured the taste of many which will make artists and fans alike reluctant to trust the service in future (regardless of management) which may not be possible to recover from. Some of the frustration can be seen on sites such as Trustpilot.
Pledge Music state that they are “dedicated to bringing innovative artists and passionate fans closer together than anywhere else”, however, their actions over the last 12 months have potentially harmed the industry and reduced trust in such platforms.
Both artists and fans are now in a difficult position. Many fans are too late to receive refunds from credit card providers and many artists feel obliged to fulfill the pledges out of their own pocket with little assurance that funds will be made available in the future. Artists that do not fulfill pledges face creating animosity and losing the fans they were trying to engage with.
If there is any way out of the current situation Pledge Music needs to start keeping fans and artists informed of the progress and start offering complete transparency to start building trust again. Unfortunately, it may be too late.