Bandcamp in Songtradr’s Hands Now: My Worries + Warnings

A lot of people are still scratching their heads about Epic Games selling Bandcamp to the (less sexy) Songtradr.

The potential for the BandCamp x Epic Games acquisition had the music and gaming worlds buzzing. Could this duo unlock a more equitable model for musicians by monetizing young superfans?

But now, after only 18 months, it looks like it can be deemed a relative failure (although Epic will remain an investor in Songtradr).

Bandcamp has always been a beacon of hope for superfan monetization — especially in the past month since Goldman sachs released their report calling Superfans a $4.2bn industry.

Bandcamp has uniquely allowed for artists to directly connect with their superfans, selling vinyl, merch, cd’s etc — initiating over $1.2b in revenue for these artists since the company’s inception. Bandcamp has been innovative and artist centric in their approach to this, and they should be highly commended for this.

So, why wouldn’t a company like Spotify acquire Bandcamp? Surely they would be able to outbid Songtradr — a B2B music licensing company valued at just $250m vs. Spotify’s $31b.

While the press since the acquisition still revolves around ‘monetizing superfans’ — I believe the Songtradr acquisition shows that the number of artists on Bandcamp still outweighs the number of paying fans.

And companies like Spotify have no shortage of artists on their platform. There is an estimated 11 million artists on Spotify — and 80% of them have less than 50 monthly listeners. The long tail of artists is lonnnng.

Spotify is not on the hunt for more artists.

They are on the hunt for paying fans.

Songtradr on the other hand — looks at a large userbase of highly involved artists and licks their chops.

Songtradr offers a subscription service (Songtradr Lite — $19 yr and Songtradr Pro-$49 yr) to handle full distribution of music for artists.

When Songtradr valued this acquisition — they likely viewed how the access to this long tail of artists could nicely fit into their roadmap (i.e. 2% of Bandcamp artists will pay for Songtradr Pro). They then likely view Bandcamp’s e-commerce superfan business as a nice additional revenue source on top of this immediate artist conversion benefit.

This is scary because — it assumes that Bandcamp’s unique ‘superfan business’ growth will carry on into perpetuity. While nobody at Songtradr would ever admit this — we know from history that this is a dangerous assumption. Bandcamp’s innovative superfan + artist community should not be taken for granted. Their recent growth has been the result of a team that is passionate about solving a problem by listening to artists. As resources start to inevitably be pulled away from the core business — beware for Bandcamp.

We’ve seen something similar with Last.FM’s head-scratching acquisition in 2007.

People were speculating that Last.FM could be acquired by one of multiple ‘sexier’ acquirers who would integrate Last.FM into their social or music product. Instead — CBS acquired them. Huh?

Within three years — CBS had gutted Last.FM’s online radio business and the founders had left the company. Since then, Last.FM has been a largely neglected child in the CBS family, lacking serious innovation in a decade.

Overall — I hope I am wrong.

I hope that Songtradr provides the capital and resources that Bandcamp needs to take the next step in bringing a viable business model to musicians.

I hope that we will look back on this as a positive step in getting more artists an equitable payout on their music.

But I fear that it is instead the contrary: a cheap acquisition justified by an assumption of converting a portion of Bandcamp artists into premium Songtradr subscribers. And in the process — pushing our best headstart on a viable ‘superfan’ business out of focus.