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Resnikoff's Parting Shot: The Bandcamp Riddle...

Sunday, August 29, 2010
by  presnikoff

Most bands are broke, and nowhere close to being able to support themselves through their art.  That might change in the future, but in the present, success ratios look depressingly similar to the label-dominated, analog world of old.

Across both physical and digital formats, the average CD Baby artist makes $174 a year, and a sizable percentage make nothing.  And, out of nearly 133,000 album releases counted by Soundscan in 2009, just 1,300 sold more than 10,000 units.  And, nearly zero DIYers crossed that same threshold. There's just not that much money getting generated - and subsequently reinvested - by developing artists.

Unsurprisingly, the do-it-yourself space is also financially challenged as a result. Players like TuneCore or CD Baby may be able to make a business out of digitally distributing artists for $10 a pop, but the broader space is likely to shrink or consolidate over the mid- to long-terms.

Enter Bandcamp, a company that doesn't have to spend a lot of time pitching Digital Music News.  The bands do it for them.  But the same brains that created an incredible service are smart enough not to erect a paywall at the gate.  Instead, Bandcamp now charges a percentage of revenues, and then lowers the percentage for higher-earning success.  This shift started this month.

Most artists embraced the decision, if for no other reason than it will keep Bandcamp alive.  At some point, every company has to pay for servers, staff, laptops, and customer support.  But Bandcamp is playing with the same success ratios that every other DIY competitor is, and therefore gambling on a much greater level of DIY success in the future.

Which may happen, especially as direct-to-fan best practices continue to emerge.  Perhaps the notion of a middle-class artist is bullish today, but will start to materialize over time.  It's too early to tell.   And, there are certainly some incredibly smart people betting on this vision - including Ian Rogers of Topspin.

But Rogers is still playing to the top, choosing to work with marketing teams and bands already generating certain revenue thresholds.  Topspin may be "hard to use," but so is a jet aircraft in the hands of a truck driver.  Put an Air Force pilot in the cockpit, and the controls make perfect sense.

And that presents a major problem to Bandcamp and others similarly situated.  Labels and publishers typically negotiate long-term control over creative output, a legacy model that continues to pay dividends today.  Bandcamp, on the other hand, could never get away with this.

The reason is that bands enjoy far more power and flexibility than ever before, and free agency is the norm for early-stage artists.  So, just like a fast-growing artist can upsell to a major or big-name manager, the same game applies in the direct-to-fan space.  A successful artist will not only attract a marketing team, but that team will reassess the entire strategy - including the choice of digital marketing platform.  Or, maybe a major jumps in, and shifts the band to their distribution and marketing partners of choice.

You get the idea. So, even the best DIY service can lose out - even if it helped to facilitate the success story in the first place.  And, even if the artist was raving about the experience the entire time.  It's all part of the incredibly tricky game of DIY monetization - one fraught with pitfalls for the artist and service alike.

Paul Resnikoff, Publisher. 



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