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News May 12, 2019

Music industry calls for PledgeMusic inquiry after costly collapse

Staff Writer
Music industry calls for PledgeMusic inquiry after costly collapse

The British music industry is calling for a government inquiry into the collapse of PledgeMusic.

As reported in TMN, the UK crowd-funding platform went belly-up after being unable to find a new owner.

Aside from the $1 million estimated to be lost by musicians, this money will be used to pay off PledgeMusic’s creditors.

Consumers who have paid for items will now have to deal direct with the artists.

The concern is that the growth of the global independent music sector has been due to musicians being able to fund projects via such companies, and the loss of confidence in them will curtail the growing clout of indies.

Michael Dugher, chief executive of umbrella organisation UK Music has written to small business and consumer minister Kelly Tolhurst, asking her to look into the collapse and the case to the UK’s Competition and Markets Authority (CMA) “to ensure that this matter is properly investigated.”

The letter pointed out, “As a consequence, creators who used PledgeMusic’s services are likely to lose money if it goes into administration without resolving its outstanding debts,” he wrote.

“Emerging musicians often rely on crowdfunding platforms to raise capital to support album recording costs, music video costs and other capital expenditures.

“Musicians should be able to trust crowdfunding platforms to fulfil their obligation of delivering money pledged by fans and supporters.”

The UK Musicians’ Union urged artists who are owed money to get in contact.


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