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Crowdsourcing Concerts — the Future of Live Music?

Posted by Soulskill on from the crowd.-source.-everything. dept.

New submitter roryed writes "Performer Jonathan Coulton, famous among some geeks for 'Code Monkey' and writing Portal's 'Still Alive' wrote on his blog, 'Salt Lake City, the last ticket link for the Nov/Dec tour, has finally gone up. The reason for the delay was that we were working on the details of this experimental ticketing thing called Bring the Gig.' Bring the Gig is a new form of crowdsourcing, much like a Kickstarter for concerts. The idea is to have fans put up the money to bring bands to their city by buying premium tickets. If the goal is met and the band is booked, general box office tickets are sold. If the show sells enough at the box office, or sells out, the original premium ticket holders get a full refund and keep their ticket, effectively seeing the show they helped bring for free. Coulton also writes, 'Could be a disaster! Exciting! Honestly I have no idea if this is going to work, but as you know, I am a scientist. I like to watch what happens.'"

3 of 58 comments (clear)

  1. It's been going on... by erickmartins · · Score: 5, Informative

    For a couple of years in Brazil. It seems to be working. http://www.queremos.com.br/

  2. You can't make a profit, so it's probably OK. by Animats · · Score: 4, Informative

    Because the biggest return you can get is a refund on your ticket purchase, it's not an "investment". If you could get back more if the event was a big success, it would be a public offering of a security. There are some short form public offering arrangements available under SEC rules, but you still have to file a basic offering statement and financial statements.

    "Crowdfunding" schemes have to be careful of this. If the pitch is that you can make money, it's a securities offering. If the pitch is that you get a product if some funding threshold is reached, the Mail Order Rule applies and there has to be a refund, without your asking for it, if the product isn't delivered by the stated date, or 30 days if not stated. If the pitch is that you're donating as a charity, the laws about charity frauds apply.

    In the early days of the Internet, many small companies were fined under the Mail Order Rule because they had online ordering that didn't stop taking orders even though the manufacturing and delivery end of the business couldn't keep up. (Now, everybody with a clue has the shopping cart system hooked to inventory control, so the order isn't accepted unless it can be filled.) Companies don't get to hold onto the money until they get around to filling the order. They can beg the customer for more time, but must, by default, refund if they don't hear from the customer.

    1. Re:You can't make a profit, so it's probably OK. by Animats · · Score: 3, Informative

      I thought it essentially made it legal for a Kickstarter type site, to now offer not only 'prizes' etc...but could legally offer $$ returns on investments by individuals that plunk down some money, and not have to worry about all the SEC filings, etc....

      That's not quite how it works. First, the JOBS act allows "funding portals" like Kickstarter, and they have to register with the SEC. Issuers then work through the "funding portal". Issuers still have to file and publicize certain statements, including financial statements. Issuers up to $100K only have to provide signed financial statements certified as true by the officers of the company. Up to $500K, "reviewed" financials. Above $500K, audited financials. There are also tight restrictions on how such investments can be marketed. Ads have to go through the "funding portal"; you can't pay some third party to promote your investment. (Remember all those old stock spams like "XLPI is headed straight up!" You don't see those much any more, since the SEC cracked down on that type of pump and dump. If you see one, send it to "enforcement@sec.gov". They do take action.)

      "An investor can sue an issuer, as well as its directors, partners and officers, for making an untrue statement of a material fact or omitting to state a material fact". And no, that can't be waived via an EULA.

      In other words, Kickstarter is going to be able to fund investments, but it's not open season on small investors.