Sellaband, an Interesting New Business Model

Earlier today I recorded an interview with Pim Betist, Creative Director of Sellaband, for my Internet radio show at myrealbroadcast.com.

Pim and I met last week at the Future of Music Conference in Denmark. (Click on # for my speech). I was very impressed with his presentation and with Sellaband.com. In short Sellaband offers Artists an opportunity to raise money to record an album.

Here’s how Sellaband works: The artist makes their own profile on Sellaband.com including pictures, a bio and a maximum of 3 demo-songs. There is no charge to the Artist. The profile is meant to appeal to potential “Believers” who are invited to give money in $10 increments (“Parts”) to pay for the production of a complete album. Anyone who wants to support the project can buy one or more Parts for $10. Once $50,000 is raised Sellaband will provide an experienced A&R person to guide the recording process. Of the $50,000, $30,000 is used for recording the CD. The A&R manager will book the producer, studio and mastering facility. The rest of the budget will be used for manufacturing, packaging and sending up to 5,000 CDs for the Artist’s Believers. At any time before the Artist reaches the goal of $50,000, the Artist can leave the service and shut down his profile page, and the Believers’ money will be returned to them.

The Artist and the Believers and Sellaband share revenues from the album as follows: Advertising revenue generated via the Sellaband website are shared equally between Artists, their Believers and Sellaband. Also, Sellaband will manufacture CDs of the album and the Artist can sell this product at shows, through the Artist’s website by mail order or download or via Sellaband’s online partners. The profits of these sales are equally divided between the Artist, Believers and Sellaband.

One of the best things in Sellaband’s model is that Sellaband will only control the rights in the album for 12 months after completion of recording. After one year, the Artist will own and control all rights in the album. In a normal record contract the Artist records the album as “a work for hire”, that is, the label owns the recording for the life of the copyright. Plus the label almost always acquires options for future albums. In the Sellaband model the artist is free to produce and sell future albums on his own and is free to pursue a label deal.

Sellaband does take a piece of the publishing but only for the songs the Artist records with Sellaband. In this agreement 60% of the publishing rights of these songs go to the Artist. This is better than a standard publishing deal, and Sellaband also seeks to maximize the songs by shopping them to movies and TV.

Sellaband is only 9 months old but already has half a dozen artists who have reached the $50,000 goal and are presently recording albums. They represent a wide diversity of musical styles including metal, rock, jazz, hip hop, electronic, Latin and pop. There are presently more than 4,000 artists on the site.

You can listen to my interview with Pim Betist at myrealbroadcast.com.