A Tale Of Two Ecosystems: On Bandcamp, Spotify And The Wide-Open Future
Spotify and Bandcamp could not be more opposite. Where Spotify highlights playlists, most often of its own creation, Bandcamp sticks to the album (or any other format, as determined by the artist). Where Spotify pays royalties according to little-understood formulas that can only be analyzed by reverse calculation, Bandcamp lets artists and labels choose their own prices. Where Spotify requires working through a limited number of distributors to access their services, Bandcamp is open to anyone. Where Spotify has revenue streams dependent on ads and data, Bandcamp operates on a simple revenue share with artists and collects no information on its users.
Spotify is now worth an estimated $54 billion on the stock market, despite having never shown an annual profit. Bandcamp is privately owned, has been in the black since 2012, and continues to grow... slowly. You might be tempted to say that one is a 21st-century business, and the other belongs to an earlier age. But neither could exist at any other time.
Which poses the question: does our 21st-century business world really have to be so much like Spotify, and so little like Bandcamp? I spoke with Bandcamp CEO and co-founder Ethan Diamond to try and understand better how and why his company does business the way they do.
Given how differently Bandcamp has behaved from a typical startup, I asked Diamond a fundamental question: Is Bandcamp a digital business?
There was a long pause. "Yeah, I'm not sure," said Diamond. "I think of Bandcamp as a music company first, because I think of who we about it – about how Prince was working on his autobiography just before he died. And he had picked a co-writer and in one of their initial meetings together he said, 'Music is healing. Write that down first.' He said that he wanted it to be the guiding principle they used in the book. And if you start with this idea that music is healing, that is obviously a power that should be in the hands of everybody who has the talent to wield it. ... And so that's what Bandcamp is. That's what I feel like we're here to build – that system. And the way you do that is by ensuring that artists are compensated fairly and transparently for their work. And that is through the direct support of their fans."
