PledgeMusic, the direct-to-fan music company that has fallen behind in payments to artists in recent months, today announced management changes in the wake of Dominic Pandiscia stepping down as CEO. Two of the company’s cofounders will be joining the executive team.
Cofounder Malcolm Dunbar has been elevated to Global President and COO, co-founder Jayce Varden has returned to the company, and Scott Graves has re-joined as president of the North American territory. In a statement, the company officially confirmed Pandiscia’s departure and that of “key members of the finance team.” No details on a new CEO were available at press time and it seems in light of Dunbar’s promotion, the company may not name one.
The company’s new financial team is under the leadership of Richard Vinchesi, a partner at Sword, Rowe & Company, one of PledgeMusic’s larger investors. The statement says, “The incoming financial team is putting in place a more rigorous infrastructure to underpin the company’s growth initiatives, which include further development of the D-to-C platform, a Vinyl Store and new advertising functionality scheduled for early 2019.
The company also says it has obtained a commitment from Lyric Financial in an effort to “improve its financial resources and processes,” the statement continues, saying “The Nashville-based company is working with PledgeMusic to help expand its working capital and improve payable processing.”
It also says, “Artists should be on the lookout for a more user-friendly backend and additional tools to better manage their campaigns including an upgraded payment system, real time analysis of campaigns and greater transparency. The rollout begins in the upcoming weeks.”
The company, which is designed as a marketplace where serious music fans can help artists to fund their recordings and other projects — and in return receive everything from vinyl to personal visits — has faced challenges in paying artists in recent months, as revealed by Variety in June, falling behind in amounts “in the middle five figures.” While sources tell Variety that some of those artists have been paid — particularly the ones who spoke with the press or complained on social media — reports have emerged that others still haven’t been paid.
Lyric founder and CEO Eli Ball said in the statement, “I have been a fan of PledgeMusic since its inception. I am excited about the moves the company is making to reorganize in
order to better serve the artist and fan communities. Lyric Financial is proud to be a partner with PledgeMusic. We look forward to supporting them as they continue to grow their world-class platform.”
In June, Pandiscia acknowledged that the company had fallen behind in payments but stressed that the company was addressing the issue: “It’s understood that certain customers may have been unhappy over the last six months. The company has had some difficulty dealing with a larger volume of campaigns. The intention is to add value in every situation, and there is some work ahead to achieve that. With respect to payments, there have certainly been payment delays, but the company has always paid artists and should be completely caught up in the near future. The team has been strengthened and is addressing any concerns as the company grows.”
Pledge essentially aims to be a cross between a traditional crowdfunding site and a label-services company: Fans can contribute to recording costs (“crowdfunding”) as well as “pre-order” recorded product, merchandise (T-shirts, caps, etc.) and experiences (ranging from personalized phone calls to performances at fans’ homes), and are then updated on the artist’s progress via photos, videos, blog posts and ultimately the finished products, ideally building a community of superfan/small-business investor hybrids in the process. For this, Pledge takes a flat 15% fee of the money raised for crowdfunding campaigns (but only if the artist reaches their financial goal) and for pre-orders, and promises a fair revenue split and quick payment.
While the service has worked well for some artists — Melissa Etheridge, the Flaming Lips, Lindsey Stirling and Bring Me the Horizon are featured on its website — it has faced challenges in the past few months.