Following the news that PledgeMusic had declared bankruptcy, Michael Dugher, ceo of umbrella organization UK Music, demanded a government investigation into the troubled UK-based crowdfunding platform.
On Thursday (May 9), Dugher wrote a letter to small business and consumer minister Kelly Tolhurst, imploring her to look into PledgeMusic’s “speculated collapse” as the company heads into administration, and refer the case to the UK’s Competition and Markets Authority (CMA). “As a consequence, creators who used PledgeMusic’s services are likely to lose money if it goes into administration without resolving its outstanding debts,” he writes.
“Emerging musicians often rely on crowdfunding platforms to raise capital to support album recording costs, music video costs and other capital expenditures,” he adds. “Musicians should be able to trust crowdfunding platforms to fulfill their obligation of delivering money pledged by fans and supporters.”
In a blog post on Wednesday (May 8), PledgeMusic co-founder Benji Rogers announced that artist funds raised on the platform would go towards paying off the company’s creditors after a three-month search for a new buyer yielded zero interest. As a result, many music-makers who used the platform were unable to deliver merchandise to their fans who had already purchased it, and thus will also forfeit the revenue from those items. Fortunately, music-finance firm Sound Royalties announced in February that it would commit $3 million in advances to help fund affected artists’ creative projects.
UK Music is an advocacy group that campaigns for the collective interests of artists, musicians, songwriters/composers, record labels, publishers, producers, managers and licensing companies.