Social music service SellaBand has won EUR3.5 million in further backing from Prime Technology Ventures, also a Dutch company.
How SellaBand works is that fans of bands invest 10 dollars in the band they want to back. If the band gets to 5,000 ‘believers’ they get 50,000 dollars and then SellaBand steps in to record an album with a real studio. So far they’ve released albums from eighteen bands from eleven different countries, including the UK.
Last December SellaBand partnered with Amazon to offer a dedicated music store on Amazon as well as an affiliate sales deal and promotion to the 50 most active reviewers on The Vine retail website’s reviewers’ programme.
I once accused SellaBand of acting like a quasi bank rather than a record label, but apparently SellaBand can’t touch the $50k or refund a believer as the money brought in is held in an escrow account. If the artist never reaches $50k and leaves Sellaband then the funds are credited back to the ‘believer’ who can either buy parts in a different artist or withdraw the funds.