Crowdfunding platform PledgeMusic is on the verge of bankruptcy after several attempts to save the platform failed. The founder Benji Rogers, had returned to the company on a voluntary basis after PledgeMusic admitted that it didn’t have the resources to pay musicians the money it had collected on their behalf from fans.
This news effects around 45,000 artists, and even a few heavyweights have been caught up in the horrendous situation including Queensryche and Ozzy Osbourne’s guitarist Bernie Torme who sadly passed away recently. Fans all over the world had paid (pledged) for products but the money hadn’t been passed on to the artists in return.
Rogers wrote in an open letter. “I went back into PledgeMusic just over three months ago as a volunteer to try and help the board and team turn around and sell the company, but I am sad to report that this effort has not met with success and that PledgeMusic will shortly be heading into [bankruptcy],” adding: “I cannot begin to appreciate how all of you affected artists are feeling about this and I am deeply sorry for what you have been through.”
He also pointed out that fans shouldn’t blame the musicians but instead: “understand the awful and near impossible situation” they were left in. “I ask you to bear with them as they do their best to make any obligations to you right,” adding: “There have been no good outcomes here and I cannot bear that something that I created to benefit artists and fans has caused so much pain to so many people. … I wanted to be a part of the efforts to get things back on track but it is obvious now that too much damage had already been done.”
Still, Rogers argued that the business model of crowdfunding was “unfair.” “A failure in execution does not mean that the model is fundamentally flawed,” he explained. “I still believe that there is a great future for fan-funded projects in this industry and I hope that someone builds a new version of or resurrects what we started. I would gladly help in this effort.”
It is now understood that the administration process will include those who have lost money registering as creditors, and the company’s assets will be sold at whatever price can be secured, and the total will be then split according to the administrator’s list of prioritized parties. The reality is that in these situations, more often than not, the creditors won’t receive the total of what they’re owed.