SellaBand: Real Time WOM experiment
There's a new site called SellaBand. The concept is defiinitely interesting. Visitors to the site can browse through a number of musicians who have posted up their music (for free). If you like a particular artist, you can invest in them: $10 a pop. For that, I think you get a few small items.
The idea is that, when a band hits $50000, the operators of the site bring them into a recording studio and out to record labels. Your $10 then pays back out, based on their success.
This is an amazing experiment. I'd love to get a hold of the data on this. This is a marketplace of art where 'voting with your dollar' has the potential for real payout. A few things may happen: bands that are inherently marketable (attractive members, catchy tunes) may attract a lot of investment; coalitions may form around bands that are known by small groups of people who evagelize them.
But what i think will most likely happen is that bands will tend to accelerate in the marketplace, as their investments go up. That is, a band that looks like it will actually make it to $50,000 is going to be far more likely to get an incremental $10 than a band that looks like a long shot. If you look through the listings with $10 burning a hole in your hard drive, you may see one band that has raised $35,000 and another that's raised $350. Most likely, you'll be attracted to the $35k band, if for no other reason than it seems like they will actually cross the threshold. Either way, the site (if it catches on at all) stands to do pretty well for itself. A handful of bands will make it to $50k, but they get a cut of every investment made.
This, though, WOM thrust right into the marketplace. The buzz around each artist is going to determine its ability to crack whatever secret threshold there is between one that looks like it will make it and one that looks to fail.
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SellaBand is a great concept but I'm sure the hardest part for any band will be in getting the first $25,000 since once they get to the 1/2 point then momentum will begin to takeover. This concept more than ever is going to require good word of mouth buzz to get the first $25,000. Great concept as it will really require a band starting out to create a strong core of fans.
I agree about the momentum investing. But more importantly, it's about investing in an artist whose music you like.... enough to get it recorded properly with a top Producer in a top studio. In my case, I and others are investing in Mandyleigh as we believe she has the talent to take it all the way. From little acorns huge Oaks grow. In her case, she's also giving exclusive access to content (mp3's, video, etc) to her investors.
50k is only 5000 people investing 1 part each. It's extremely do-able, with word of mouth.
With Sellaband, any investment can be moved around artists or even refunded before the $50k is reached. One band reached the $50k in 3 months (Nemesea).
As Sellaband was created by top ex-Sony Music executives, it has good pedigree and contacts too. I think it is a real winner, where I and many others can choose what artists make it onto the world stage next.