Record labels helped kill the band Failure. After delivering their third album, 1996’s Fantastic Planet, to Slash Records, the alt-rockers found themselves stuck in an 18-month purgatory of label changes, unsure when or if the album would be released. So when Failure returned to playing shows in 2014, they wanted to avoid a traditional label arrangement. They turned instead to PledgeMusic, the 10-year-old UK company that served as a combination fundraising and retail portal for musicians at all stages of their careers. A campaign for Failure’s comeback, 2015’s The Heart Is a Monster, netted the band $200,000—the first time that its members had actually seen profits from album sales. Thus began a profitable relationship with the platform, which now owes Failure about $70,000 from their third campaign, according to frontman Ken Andrews.
“[Labels] control your fate on a level that is just draconian,” he said. “We thought we were done with that and it literally feels like they tracked us down. And when I say ‘us’ I don’t mean just my band, I mean all these bands who were on majors or had some form of a career within the normal music industry, who then extricated themselves and were doing this direct-to-fan, homegrown thing.”
When PledgeMusic founder Benji Rogers announced in a May 8th Medium post that the company would be entering bankruptcy, it was an unwelcome but not unexpected announcement. Slow payments had been an issue for a year, top executives departed, and Rogers returned to PledgeMusic on a volunteer basis to help seek a buyer. Former employees allege that PledgeMusic used funds collected on artist campaigns to cover operating expenses and have questioned whether that was done at the direction of its board, whose members include Joshua Sason, recently charged with fraud by the Securities and Exchange Commission, and former Columbia Records president Don Ienner, who was implicated in payola inquiries in the mid-2000s. (Rogers told Pitchfork that he can’t comment on behalf of PledgeMusic, while reps for the company did not respond to requests.)
The outstanding amount owed to artists is estimated at being anywhere from $1 to $3 million at the low end, with some owed hundreds of thousands of dollars. Artists who have made statements about their losses include Jesus Jones (between $5-10,000), Fastball ($11,000), the Dandy Warhols ($50,000), and L7 (“at least” $75,000). What these veteran artists have in common is that, like Failure, they turned to PledgeMusic as a way to forgo the traditional middlemen of the industry—and the perils of exploitative contracts, bankrupt distributors, and retail upheaval. Ultimately, their fates were still subject to corporate mismanagement.
PledgeMusic was great for the kinds of bands Andrews calls “blue collar”: able to make enough from album and merch sales plus touring to make it worthwhile, as long as they carefully accounted for every dollar. Their core fanbase might number in the four figures, but diehards would put up $275 for handwritten lyrics, $400 for an online drum lesson or $3,800 for a tour of a band's hometown. Semisonic, the Presidents of the United States of America, and Lit—all one- or two-hit wonders from the ’90s, at least in the eyes of general audiences—blew past their fundraising goals for reissues and recent recordings alike. On PledgeMusic, bands that were decades removed from their best sellers could revel in the passion of their biggest fans and gauge how much new music was worth to them. Just as crucially, the musicians could keep track of the money themselves—or so they thought.
“I've had all kinds of trials and tribulations with business managers and people stealing from me constantly,” said Filter frontman Richard Patrick, who was in the midst of his second PledgeMusic campaign, following a successful fundraiser in 2016. “And now finally, I find this great little site that puts me in touch directly with people who want to hang out online, and lo and behold, someone’s gonna fuck that up too.”
Initially reluctant to try it, Patrick was soon won over by the fun of interacting with his fans (“You knew these fans really cared, so it made for this incredible bond with them,” he said). When PledgeMusic announced its closure last month, the industrial rock band had nearly 1,200 outstanding pledges for their new album, which reunites Patrick with original Filter member Brian Liesegang. Patrick says he is owed “tens of thousands” of dollars, but he intends to move forward with the release. “If it's the last thing I ever do, I’m going to make sure that I fulfill everything that was requested of me by the fans,” he added.
Dan Stuart, the founder of Tucson’s pioneering pre-Americana group Green on Red, launched a PledgeMusic campaign at the urging of his label, Cadiz Music, to help sell a solo album and a novel. While Cadiz paid for the manufacturing costs and fulfilled all the orders, Stuart had an agreement in place with the recording studio and the graphic designers who worked on his projects: they’d get paid when he got his cut of the PledgeMusic sales. Now he’s got to figure out how to pay them out of pocket.
Stuart compares PledgeMusic with Jem Records, the distributor whose 1988 bankruptcy was disastrous for independent labels and artists. “Jem used to pay just the big clients, so if something was really selling they would pay the bill because they’d want more to keep selling. If it wasn’t such a big client they’d ignore you or not pay you.”
Cadiz Music owner Richard England had used PledgeMusic for years; it was a good retail option because it could reach a large audience. Aside from Stuart’s album, England is owed money on campaigns for documentaries about the Slits and Madness singer Suggs, for a total of around £30,000 ($37,955). “At the beginning of last year, I would have forecast turning over maybe £100,000 ($126,517) worth of business with them,” England said. “I was certainly not expecting them to steal our money and go into administration [bankruptcy in the UK].”
For England, the PledgeMusic bankruptcy is just the most recent time a larger company collected money from the sale of products he paid to make, spent that money, then went out of business, effectively leaving him with the bill. The bankruptcy of Cadiz’s main distributor, Pinnacle Entertainment, in 2008 was a similarly unexpected and catastrophic experience, England says, as was last year’s collapse of music retailer HMV. England has taken out a £40,000 ($50,607) personal loan in order to meet his obligations. “I thought we’d be more insulated or protected against these things in this day and age, but we don’t seem to be,” he said. “It just seems to be the same, really.”
Ken Andrews says that without the money Failure is owed by PledgeMusic, the band can’t fulfill the orders for their fifth album, due to the hefty shipping costs of heavy vinyl packages. (The group also has no way of knowing which buyers were able to get refunds from their credit card companies or PayPal.) Andrews is somewhat consoled by the fact that everyone who pre-ordered the record at least got a digital download. Failure also intends to give these fans a USB drive full of previously unreleased material and rarities. But the larger feeling of being cheated lingers on.
“You know when you’re signing a record deal that you’re making a deal with the devil, in a sense, but the tradeoff is that they know they have to build you up in order to sell records,” he said. But 95 percent of Failure’s traffic to PledgeMusic came directly from the band’s social media, he claims, making the platform more or less a payment processor. “Basically artists were cutting Pledge in on their income stream. So what were they thinking when they started spending artists’ money? Just from an ethical standpoint, what were they thinking?”