Spotify versus Bandcamp

The answer was simple. Now I’m not so sure.

The last few months have brought us important news of changes from both providers.

Spotify, who already pay artists a pittance ($0.003 per stream on average) has announced a change in their policies so that songs with less than one thousand streams will not qualify for monetisation, a move sending a message that the work of emerging artists, is effectively without worth.

This is not dissimilar to YouTube’s criteria for monetisation – although YouTube has actually lowered the entry level in the past few months (from 1000 subscribers to 500, and from 4000 watch hours in a year to 3000).

So, while YouTube is encouraging new users, Spotify discourages them.

Bear in mind that despite making over $10 billion in annual revenue, until 2023, Spotify had never made a profit. As it branches out into podcasts and now audiobooks it seems like it’s scrabbling around for ways to improve its financial position. Businesses with overheads have to make money after all.

Bandcamp, the much beloved site that not only allows musicians to sell music and merch directly to their fans, but also ran an insightful editorial department covering niche genres, announced its sale to the games giant Epic Games (of Fortnight fame), who in turn have sold Bandcamp to the B2B music licensing company Songtradr in September 2023.

50% of Bandcamp staff have been made redundant – optimistically spun as ‘50% of Bandcamp employees have accepted offers to join Songtradr.’

The future of both companies seems in flux.

[Edit - Spotify just announced a huge series of layoffs, but also its first profit. It’s a rapidly changing situation.]

Where does that leave us? Corporate takeovers seem an inevitable part of being beholden to large companies. By relying on them, as the saying goes, we have built our houses on rented land. 

The big three labels (Universal, Sony, Warner) have deals with all the streaming sites (Apple Music, Amazon Music, YouTube Music etc) so all offer pretty much the same catalogue of music, with similar monthly prices.

But Spotify differs from the tech giants in that it has no other profitable digital products or hardware (like iPhones) to sell to make up the losses.

Barring some miraculous turnaround, I would not be surprised to see it go under in the next few years, or be bought out by a larger company.

Likewise, Bandcamp’s long-term profitability will be heavily scrutinised by Songtradr as they seek to protect their investment. What made it special seems potentially lost forever.

So, what’s the answer? I will continue to use both while the situation develops. I suggest you do the same. I think the landscape will look very different in a few years, but it’s impossible to predict right now. 

All streaming sites are now just a way of marketing your music and building an audience rather than earning income.

[Given income from streaming is low, getting your music online shouldn’t break the bank either. I use DistroKid to distribute my songs – use this affiliate link for 7% off your first year.]

I wish I had a neat solution for you.

Use streaming sites if you like but don’t count on them. Or boycott them entirely. It’s your call.

Whatever you do, place the highest importance on building your own systems, like a newsletter, or your own merch store.

Think about how to foster a direct connection with your audience and what you can offer them that has value for them, and a good margin for you. It might be a T-shirt, a USB stick, or a vinyl record.

The vinyl renaissance is proof audiences are seeking to reconnect with physical media again, especially when they learn the realities of streaming income for artists.

Lead by example. Buy direct from artists you love. Spend money on music again. And build your house on land you own.

Mary

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