Can Independent Artists Survive In a Streaming Industry?

If streaming is taking over the music industry, where do indies fit in?  Welcome to the alterna-streaming revolution at Bandcamp.

Last year, Bandcamp announced that they’ve paid out $150 million to indie artists in the past 8 years. This year, Bandcamp followed up with even better news for indie artists.

According to a post on the company’s blog, Bandcamp digital albums sales grew 20%, tracks 23%, and merchandise 34%.  This marks a striking contrast between the indie scene and the rest of the music industry.  In line with 2016 total sales industry-wide, vinyl led the way with a 48% growth over 2015 numbers. CDs also grew 14% as well as cassettes at 58%.

According to a Nielsen report, digital album sales fell 20%, tracks 25%, and physical albums 14% in the mainstream market. In addition, in regards to physical media, Midia warned,

“At some stage, perhaps in 2017, we will see streaming in many markets hit the glass ceiling of demand that exists for the 9.99 price point.  Additionally the streaming-driven download collapse and the impending CD collapses in Germany and Japan all mean that it would be unwise to expect recorded music revenues to register uninterrupted growth over the next 3 to 5 years.”

The collapse in physical and digital music formats come from an industry-wide push towards subscription music rental offerings. While the music industry celebrates over 100 million paid music subscriptions, the news poses a serious problem for fans, labels, and indie artists. Bandcamp explained why,

“As more people subscribe to music rental services, the already paltry rates paid to artists are going down (and no, artists don’t necessarily make it up in volume).  But it’s not only artists who are struggling.  The companies built solely around subscription music rental continue to struggle as well.  Some say the model is simply broken.  The success of Netflix is often used as a counterargument, but the music business is not the movie business.”

However, the company cited the push towards a subscription model as harmful for music as an art form.

“Longer term, if subscription music rental can’t work as a standalone business, then it will only exist as a service offered by corporate behemoths to draw customers into the parts of their businesses where they do make money, like selling phones, service plans, or merchandise.  And when the distribution of an entire art form is controlled by just two or three nation-state-sized companies, artists and labels will have even less leverage than they do now to set fair rates, the music promoted to fans will be controlled by a small handful of gatekeepers, and more and more artists will be hit with the one-two punch of lower rates and less exposure.  The net effect for music as a whole is worrisome.”

Yet, Bandcamp keeps growing steadily with its business model. Over 2,000 independent labels came on board, with hundreds of thousands of artists joining the company just last year. 2017 looks solid for the privately held company as well as independent artists who have teamed with them. The company finished the blog post offering artists an alternative to mainstream labels.

“Bandcamp provides an alternative to all of this because we feel strongly that an alternative needs to exist. The fact that we continue to grow, and that that growth is accelerating, tells us that many of you agree.  We’ll therefore continue to build on a model that compensates artists fairly and puts them in control of their data… Impending thermonuclear apocalypse notwithstanding, we are incredibly enthusiastic about 2017.  At least two of the half dozen things we’ll launch this year will astound you, and one may even cause you to make an unexpected vacation detour.  We can’t wait. Thank you for being a part of it!”

5 Responses

  1. Danwriter

    “…when the distribution of an entire art form is controlled by just two or three nation-state-sized companies, artists and labels will have even less leverage than they do now to set fair rates, the music promoted to fans will be controlled by a small handful of gatekeepers, and more and more artists will be hit with the one-two punch of lower rates and less exposure.”

    That’s not the future — that’s the present.

    And…
    “Bandcamp provides an alternative to all of this because we feel strongly that an alternative needs to exist.”
    Sophistry at its finest.

    • Antinet

      So you’re calling Bandcamp deceitful but not saying why? Isn’t that sophistry as well?

  2. The Hit Machine

    Hits Hits Hits – that’s what we need.. whether it’s originals or covers the big hits will
    make money for the artist, producer, songwriter, publisher, label.

    This is the greatest time there’s ever been to be in the recorded music business..

    Distribution is now open to anyone (no longer a closed gated community)

    Recording studios can be your MacBook Pro and a pair of headphones
    (no need to spend half a million on an SSL large surface console)

    Quality of productions – with so much being done In The Box there’s no earth loops,
    hiss or buzz..

    iTunes paid downloads aren’t dead yet.. you can still make a million from a hit

    Streaming revenue can be very lucrative if it’s a huge global hit

    • Faza (TCM)

      Yes, streaming can be very lucrative – if you’re running a streaming service or a rights aggregator.

      For an individual artist, global streaming revenue doesn’t mean very much, because their share of that global revenue is going to be small and eventually get even smaller. Streaming revenue simply doesn’t scale with consumption, which leads to the disheartening realization (known to anyone receiving revenue statements from streaming) that numbers played and per-play revenue are inversely correlated.

      All of the foregoing is before we consider Midia’s prediction (which I personally consider reliable) that the $10 price point is nearing its limit. When that happens, expect price cuts across the board: a service pricing itself at $10 simply cannot compete with one that offers exactly the same thing at $5, say. Overall revenue may increase with additional uptake, but individual artist revenue will go down. Each artist only has so many fans amongst the users, and the average revenue per user (of which an artist will only receive a portion) will be half of what it is now.

  3. Paul T.

    Sounds like a BandCamp Ad to me. The bottom line is that music is losing its value as just “one thing” & becoming more of an “expected substitute” for the vast array of marketing conglomerates out there.

    Let’s take for example Pandora: Listeners enjoy the music, but I guarantee if you ask them “what artist sang this?” they wouldn’t be able to tell you. And yes, while there are many listeners who still support the art form, the Artists who are winning are working their tales off. Creators need time off & a good paycheck to keep their personal and professional lives sound and in the new “Digital Age” they have customers/fans with serious ADD. That’s not an easy fan to sell to.