First Diary here on Booman – didn’t do much on European Tribune but this UK initiative may be of interest to those interested in the future of the music industry…
Well, I hardly think EMI are shivering in their boots just yet, but
appears to me to be the next step in the “Napsterisation” of the music market.
Some interesting features to this site which aims to let fans decide which bands they think are going to be big, finance them directly, and have a punt on them as well.
The deal is that bands submit tracks and pay a small fee to have them listed in an “Arena” where they get anonymously reviewed.
Then the best-reviewed go on to a “Showcase” and the chance that fans might want to buy “Backstage Passes”, which are essentially a forward purchase of the album (which the band has 6 months to produce) plus an option to have a punt on how many albums the band will sell – called a “Contract”.
Too much to tell – and very interesting to a saddo ex-regulator like me how they have got around financial services regulation – but clearly a lot of work has gone into the site.
A few of the FAQ’s follow
What can it do for me?
Artists – cash, exposure, fans, fame and fortune. Fans – earn money, form a close relationship with your artists, and share in their financial success. Investors – trade in and out of artist Contracts like a record label – making money based on your skill at predicting future album sales.
What do artists get out of the site?
They have the opportunity to secure a minimum of £15,000 of finance to record an album and further their career directly from their fans (as well as from new fans they find on Slicethepie).
How much money will the artist receive from the sale of an album financed through Slicethepie?
Assuming a £7.90 retail price, approximately £3, this is around 6 times as much as the artist would receive under a record deal. This is after deducting the retailer’s (eg iTunes) margin (£3) and the Slicethepie royalty (£2). Digital distribution costs (through Tunecore) are minimal.
What is the catch?
Record labels lose money on 90% of artists who they sign to a traditional record deal. This means 90% of money poured into the industry is wasted. How many other businesses lose money on 90% of the products they sell? It’s a broken model. With Slicethepie 100% of albums are pre-financed by fans. So there is no waste.
There is no catch; Slicethepie is simply a far more efficient model and all the benefits of this flow directly to the artists and the fans.
Just a consideration of who gets what under the old model, and in this model say enough.
At the end of the day, it’s the fans who make the bands, so a slice of the pie makes sense.
Now if I were doing it, I would use a slightly different approach, but what the hell.
Good luck guys!
