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Business News Deals Digital Retail Top Stories
Epic Games buys Bandcamp
By Chris Cooke | Published on Thursday 3 March 2022
Fortnite maker Epic Games has made a bigger move into the music domain – following last year’s acquisition of music gaming firm Harmonix – by buying itself direct-to-fan platform Bandcamp.
It’s a very interesting purchase on Epic’s part, though for Bandcamp – in the short term – the main priority is reassuring the artist community that it’s business-as-usual despite being acquired by a big gaming company with big metaverse ambitions that is 40% owned by Chinese web giant Tencent.
Bandcamp founder Ethan Diamond announced the deal in a blog post yesterday, stating: “I’m excited to announce that Bandcamp is joining Epic Games, who you may know as the makers of Fortnite and Unreal Engine, and champions for a fair and open internet”.
“Bandcamp will keep operating as a standalone marketplace and music community, and I will continue to lead our team”, he added, getting in some business-as-usual reassurance quickly. “The products and services you depend on aren’t going anywhere, [and] we’ll continue to build Bandcamp around our artists-first revenue model – where artists net an average of 82% of every sale”.
How artists interact with the Bandcamp platform won’t change either, plus artist-friendly initiatives like the commission-free Bandcamp Friday and the company’s editorial operations that champion new artists and new music will all also continue. “You’ll still have the same control over how you offer your music, Bandcamp Fridays will continue as planned, and the Daily will keep highlighting the diverse, amazing music on the site”, Diamond added.
So, what will change with Epic’s money and infrastructure now available to the Bandcamp business? Well, Diamond went on, “behind the scenes we’re working with Epic to expand internationally and push development forward across Bandcamp, from basics like our album pages, mobile apps, merch tools, payment system, and search and discovery features, to newer initiatives like our vinyl pressing and live streaming services”.
Bandcamp has often been seen as the super artist-friendly digital platform, especially for independent and grass roots talent who don’t necessarily achieve the level of streams necessary for streaming services like Spotify to be decent revenue generators. With Bandcamp’s direct-to-fan model, more niche artists with smaller but very loyal fanbases can make decent money selling merchandise, physical releases, digital content and memberships directly to fans.
By championing new music through its editorial – and as a company that never seemed to be pursuing a ‘global domination at all costs’ strategy – Bandcamp enjoys lots of vocal supporters within the artist community, especially with those artists who are vocal critics of Spotify in particular or subscription streaming in general.
Although, in many ways, a lot of that popularity is as much down to the Bandcamp model as the Bandcamp brand. And while some people position Bandcamp as a more artist-friendly rival to Spotify, they aren’t really rivals at all. After all, most super fans spending money directly with artists on Bandcamp are also likely spending money each month on a premium subscription with a streaming service. They are, therefore, complementary revenue streams.
But, while the subscription streaming business model was responsible for the record industry’s revival and is still powering most of the sector’s continued growth, it does feel like the direct-to-fan side of digital music is set to surge in the years ahead. And a lot of that is because direct-to-fan is becoming increasingly digital.
Obviously, D2F was always digital in that the direct-to-fan transactions occurred over digital platforms, though often what the fan was buying was a physical product or a ticket. During the download boom some artists sold MP3s direct-to-fan – and some still do – though that never really took off in a major way. And while some artists have enjoyed success selling digital memberships – so online fan clubs – that has never really taken off in any big way across the industry.
However, there is an increasing appetite among the core fanbases of some artists to spend money on digital content and experiences, whether that’s through memberships, donations, digital gifting, tickets to livestreams, or digital collectibles within gaming platforms and metaverses, or as NFTs on the blockchain.
And that’s a big opportunity for savvy artists with loyal fanbases, for platforms that can facilitate direct-to-fan transactions, and – oh look – for companies in control of major gaming platforms and with ever greater metaverse ambitions. Which is why the Epic/Bandcamp alliance is so interesting.
Of course, one challenge for everyone pursuing those opportunities is that – where fans are buying that digital content and those digital experiences via their smartphones, which most are – there’s the problem of the commissions charged by Apple and Google on all in-app transactions.
Epic has been prolific in trying to get around those commissions by seeking to force Apple and Google – through the courts – to allow app-makers to use their own transaction platforms. And that’s what Diamond means when he dubs Epic as a company that “champions for a fair and open internet”.
Epic’s efforts in fighting the Apple and Google commissions – if successful – were always going to help the direct-to-fan side of the music industry too, but Epic itself now has a vested interest in all that.
So, that’s all super exciting. Though, for those Bandcamp fans still a bit concerned that the platform is now in the hands of the much more corporate looking Epic Games – and therefore basically part-owned by the Chinese web giant that also has stakes in Universal Music, Warner Music and Spotify – Diamond’s blog post evangelised a little further about how this big deal can only deliver super good things for his company’s community of independent artists and labels, and the music fans that buy their stuff.
“Since our founding in 2008, we’ve been motivated by the pursuit of our mission, which is to help spread the healing power of music by building a community where artists thrive through the direct support of their fans. That simple idea has worked well, with payments to artists and labels closing in on $1 billion”, he went on.
“And while over the years we’ve heard from other companies who wanted us to join them, we’ve always felt that doing so would only be exciting if they strongly believed in our mission, were aligned with our values, and not only wanted to see Bandcamp continue, but also wanted to provide the resources to bring a lot more benefit to the artists, labels, and fans who use the site”.
“Epic ticks all those boxes”, he then insisted. “We share a vision of building the most open, artist-friendly ecosystem in the world, and together we’ll be able to create even more opportunities for artists to be compensated fairly for their work”.
