Direct-to-consumer platform PledgeMusic has admitted delays of payments to artists are “unacceptable” following numerous complaints.
The crowdfunding company had previously admitted problems with processing payments and called in finance specialists. But the situation appears to have got worse, as PledgeMusic announced it is working on a solution to resolve payments within three months.
“We accept responsibility for the fact that we have been late on payments over the past year,” said a statement. “PledgeMusic is working tirelessly on this issue, and we are asking our community for their continued support and patience.
“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.”
PledgeMusic said it “deeply regrets” not living up to its own standards. It described the platform as an “essential part of the evolving landscape of the music industry”.
The statement added: “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."
While the company has made progress, we still haven't reached our goals
With HMV currently in on-going administration, the problems at PledgeMusic could be another blow for the struggling physical music sector. The platform has partnered with both indies and majors on D2C campaigns, including limited edition releases and vinyl.
Artists who have run current and recent campaigns on PledgeMusic include U2 for an anniversary vinyl edition of No Line On The Horizon, Rod Stewart, The Dandy Warhols, Razorlight, The Wombats, Frank Turner, Mercury Rev, Yusuf and The Killers’ Dave Keuning.
Social media has been inundated by artists complaining about funding raised via the platform not being passed on. Fans who funded Pledge campaigns have also voiced their concern.
A Tweet from Jesus Jones’ account said: “We are owed money too. No-one answering emails, or phones.”
An earlier Tweet said: “Sad to say - but don't pledge for ANYTHING on Pledge as of now. Remove any funds you may have sent them."
The band Tokyo Taboo wrote: “Our fans have trusted you and we haven’t seen a single penny of what is owed to us.”
Sad to say - but don't pledge for ANYTHING on @PledgeMusic, as of now. Remove any funds you may have sent them. Please RT, so no-one else gets stiffed for their money.— Jesus Jones (@jesusjonesband) January 24, 2019
PledgeMusic announced a major management revamp in October, following the departure of CEO Dominic Pandiscia. London-based co-founder Malcolm Dunbar was upped to global president and COO, with a focus on integrating the company’s global business.
Last year Pandiscia admitted to delays in paying artists, which he put down to a rapid expansion in the number of campaigns on the site.
PledgeMusic partnered with Nashville-based music financing firm Lyric Financial to “help expand its working capital and improve payable processing”.
The company said more than 45,000 projects have been launched on PledgeMusic and $100 million in artist payments distributed since its launch in 2009.