Crowdfunding as a concept took a serious hit last week when German/Dutch music startup Sellaband had a near deadpool experience. The company filed for bankrupty and was saved by the bell by German entrepreneur Michael Bogatzki.
The incident hasn’t shaken Swedish online music startup TuneRights‘ faith in crowdfunding as a future business model for the music industry. Raymond Monner, CEO and founder of Tunerights, told me to be pleased that Sellaband is to continue with a new owner. It has succeeded in testing new ground, thus showing that the general public are willing to contribute to an artist’s career.
TuneRights describes itself as a stock exchange for songs – creators register their works and allow people to buy shares of the future revenue that a work generates. The company with a team of ten, consisting of both musicians, designers and music industry professionals, is still in closed beta, aiming to launch to the public before the summer. The service will initially be available in Europe, due to financial markets regulator issues.
The major difference to its competitors such as Sellaband and Brooklyn startup Kickstarter (not only music projects), is that there’s no minimum funding target, nor any requirements a project to be fully funded before any money changes hands. This would make it easier for musicians to continue with their work in some scale as soon as the transactions start coming in.
I got an early demo of the service at the recently held Music Hack Day Stockholm, where it was one of the startups offering its API to hack on. At the time I got to see a clean interface and test search for artists with their tracks automatically pulled in from various music sources, e.g. Myspace, SoundCloud, iTunes, Spotify, or LastFm. The artists and fans have their own pages where all the transactions and current earnings are displayed. The idea of the service is explained in the super simple tutorial below:
Crowdfunding, or fan funding, as a concept is also being tested in various nonprofit projects such as Spot.us, community funded journalism, and crowdfunding of an Irish startup KildareStreet. Obviously, there seem to be attractive opportunities in crowdfunding music, since more players keep entering the field. Italian BuskerLabel opened up only yesterday its crowdfunding platform for releasing music albums under Creative Commons license. Crowdfunding, music as well as other industries, will also be the topic of several panels at the upcoming SXSW conference next week.
TuneRights was one of the music startups pitching at the Music 4.5 conference held today in London, where the music industry was gathered to discuss innovation, revenue and business model opportunities. Check out Stuart Dredge’s, Music Ally, live blog coverage of all the music startup pitches.
Whether TuneRights is to show the way to the end of the rainbow for tunemakers, is yet to be seen, but in the meantime, while blaiming Bono, for everything, I think this clip catches the overall feeling of the music industry.
Find out more About Me and fellow Top 100 Women in Tech in Europe. Connect with me on Twitter, LinkedIn, Facebook, or just drop me a line! Subscribe to my Feed, Startup Advice, and Swedish Startups Twitter list. And remember, “You never learn anything when you speak, only when you listen” – Roelof Botha / Douglas Leone, Sequoia Capital
Don’t miss the future of DATA in Berlin – Register now for Next11!