SellABand changes hands... and business model

As I told you in the lastest blog post, SellABand went bankrupt.

Soon after, aquisition rumours started. Then, it was official. And a couple of minutes ago, the website was back online.

Business as usual, right? Wrong.

Users trying to log in SAB again are greeted with a notice of some new Terms of Service - which you agree or you have to cancel your account. The new Terms of Service have a funny clause, one that radically changes SAB business model. In 4.5, they state that a believer can't take back his money if it's on SAB for more than 15 days. OUCH!, this is more than a change, this is not acknowledging the real SAB problems, while failing because they take out the incentive to actually be a believer... What an huge #FAIL: this new SAB is, automatically, a lot worse than what it was.

When canceling (because I don't accept the new TOS) my accounts,  they said to me:

Dear Merankorii,

We would really like to hear the reason why you do not want to accept the new Terms and Conditions and stop participating on SellaBand.
Here's my reply:

The new 4.5 clause makes believers being forced to loose their money, even if the band they wanted to succeed abandons the project or otherwise doesn't reach its goal. With the new terms, believers stop having the ability to be "believers of some specific artist(s)", and are thus forced to be "believers on SAB". While that might work to some believers and bands, that radical change of concept doesn't work for me both as an artist and a believer. Thus, unless/until you change the TOS again, I want to withdraw my money on SAB and quit both my artist and believer accounts. I don't count on coming back to SAB as an artist until this 4.5 changes to something I feel more fair for me, as a band, to purpose to my fans, and I count to get back to being a believer *only*if* I find a band that I like so much that I'm willing to bet with my money in, taking into account that I might never see that money again -- which doesn't happen with any SAB artist at the moment.


SellABand goes bankrupt

I've written about SellABand in the past:


[...]SellABand, a German startup that tries to act like a record label for registered artists. I also intend to do a full review on this later, and to sign Merankorii there, but I have to confess that I don't believe it's business model will make this service survive. Anyway, the fact that startups like this are starting to appear just show that there's a need to do something into the new music market reality, and Web 2.0 might be a key tag on that future. I also think I'll talk more about that in my presentation on BarCamp Portugal.
When I talked about the actual music industry scenario with the technological advances we're seeing on BarCamp Portugal, I said that new stuff was needed, and that some webapps are walking towards the solutions needed (like Amie St. or SellABand) but we weren't there yet. Well, yesterday I knew about Treemo, the next step towards what we need.
While new features are surely going to appear, their model business will hardly change - but will, perheaps, evolve. Yet, and under the actual stance that, I don't see them as being a viable way for artists to earn money with their art, but it's a good step towards it.
SellABand - I promised a full review of it that I never did (shame on me). To give you an example... I have a musical project and I've used the internet to promote it - and even to get the label that released my last album. Of all those music services my music can be heard, SellABand is the one where I probably have less people listening to it - but in the other hand is the one that possibly granted me more fans. Also, Last.fm and SellABand were direct creators of revenue: I sold at least one CD thanks to each of them. What's SellABand? What makes it so different? No better than this page to explain it, but basicly bands, for free, create their profiles there, with (at their choice) free-to-listen music. "Believers" (the name for listeners) may "believe" in an artist by buying one "part" of the band ($10 per part). Then, "Together Believers have to raise $50,000 to get their Artist of choice in the studio. At any point before your Artist has reached the Goal of $50,000, you can withdraw your Parts and pick a different Artist. You can even get your money back. It's your music. It's your choice." If one band reaches $50,000 (in four months two already did), a CD is released, you get a copy, 50% of the profits go to the band, and the other 50% are distributed to their believers.
SellABand also keeps going on, and are, at least, a very successful case of an indie label - after all in less than an year they've managed to launch several bands albums and compilations, besides organizing events - for instance. Here listeners pay to give the bands a chance to release an album, and after they can make money out of it.
But the big question here remains: what's the really good way of doing this? How to create the "Record Label 2.0"? Every one of the three concepts for music have problems (SellABand, Launch A Label and the $100 label), and while ideas can and should be taken from stuff like Open Source or examples like Swarm of Angels, there's still no idea of how to create the "killer record label", that which is fair to everyone (from the artist to the public). I wrote my ideas of how to create the perfect record label [6] in the past, even if it was just a collection of loose thoughts in a way that seemed to make sense. There's no answer yet, but it's definitively something interesting enough to make me think.
In 2007/10 I actually interviewed SellABand. All of it is relevant, but let me highlight this part - more interesting when we think about it's state of bankrupcy:
When it comes to SellaBand I am very confident that it is a sustainable business model. The relationship of the artist with his or her fans is a unique one that is very difficult to break. Imagine seeing 50,000 dollars roll in on your account. Imagine realizing your dream because thousands of music fans believe in you. Imagine seeing an artist you supported on MTV. All of this magic is happening and will happen a lot more for a very long time.
In 2008/07 I interviewed Equal Dreams, a SAB competitor. This is what they had to said regarding SAB:
Compared to the other services Equal Share provides the artists with more flexibility in defining what he or she is actually selling to the audience and for what price; first of all, there are no pre-set target goals, but the artists can define their own funding needs; after all the quality of the produced music does not necessarily correlate with the amount of money spend in the project. Nowadays this is true more than ever as the prices of digital recording equipment have come down so drastically. Artist could also use Equal Share together with a record label/producer to gather a partial funding for the production. Secondly, the co-funding, which works with a pre-order concept, can be flexibly assigned to even just one song, and the pre-order price can be set as low as 0.50 EUR. We think this is more attractive from the customer’s point of view than being prescribed to invest tens of euros. Fans can be updated about the progress of the production project using the internal messaging system in the Service.
In 2008/11, I wrote:
They're changing for better, but they're still too far from where they should. Let's see how this goes...
In 2009/06, I questioned some bands decisions regarding their editions, based on SAB figures, and questions that should also apply to SAB themselves.


Today SellABand's website gives us this message:
On Friday February 19th, SellaBand AG requested provisional suspension of payments (moratorium). This was granted by the Court in Amsterdam on the same day. Yesterday, Monday February 22nd, this moratorium was changed into bankruptcy, with appointment of, Mr Paul Schaink, an amsterdam lawyer, as trustee. The trustee wishes to inform the 'Sellaband community' that, apart from a few technicalities, the completion of a transaction with a potential buyer of the business, is to be expected soon, in order to make a fresh start, safeguarding both the rights of Believers and Artists. More news will follow shortly.
I don't know what "shortly" is, but I'm sure I want to know about it. In the meanwhile...
There's one thing I know for sure - this bankrupcy is not SAB's business model fault, it is their management fault - just ask anyone from its community.