New ideas needed to cope with the global economic downturn? How about investing in talent? Sellaband and Slicethepie are financial platforms that provide fans with the option to invest in a new artist or band. These platforms enable music fans to take on an A&R role, spotting new talent and, potentially, to earn money by reviewing music tracks and providing start-up financing for their favourite tunes.On the Dutch SellaBand site fans can support artists with as little as $10 and with this qualify as a 'Believer' in the artist. An artist has to raise $50,000 in order to record a professional album. Believers are entitled to a share in the revenues made with the album they helped to create - 50% of net revenues generated from the music recorded with SellaBand are split among the Believers of this artist, for a period of five years. Apparently already 29 artists from 12 countries have raised the full $50,000 on SellaBand and over $2,200,000 has been invested in unsigned artists.
Slicethepie, registered in London, allows artists who get the best online reviews from fans to enter into an online showcase. They have to raise a minimum of £15,000 in order to get professional album of their performances recorded. Fans can invest as little as £1 in an artist to receive free tracks and exclusive artist access. An investment of £5 or more entitles to a free digital copy of the album and the fan's name secured on the album sleeve. In addition, the fan gets the exclusive right to purchase a number of 'contracts' (a tradeable bet on the number of albums and tracks sold over a two year period from release) in respect of the artist, with one contract for every £1 invested entitling them to a return of 10 pence for every 1,000 albums/10,000 singles sold (contracts are redeemable after 2 years). These contracts can be also traded on Slicethepie's trading exchange (see here for further details)
This blog has previously reported on the collaboration of Groove Armada with Bacardi. See also The Times news report "Musicians and performers invite fans to invest in their success".
