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jason on 09/13/2010 at 09:00AM

Who Pays For Free? Bandcamp Imposes a Business Model

On September 16th, Bandcamp will start charging users who use the music-hosting platform to offer free downloads. The announcement may have broader implications concerning the current climate for free music online.

Some are decrying the move as a withdrawal of support for the netaudio community, but while Bandcamp launched completely free, it was only a matter of time before the business model came into play. In a post titled "It's a Business Model!", Bandcamp's co-founder Ethan Diamond announced that they would start taking a 15% revenue share of sales made through the site. Though it's a far cry from major label practices of old, some users feel Bandcamp has gone "from a revolutionary service, one that had the power to change to rules of the game (and did!) [to] more like an old fashioned record label," wrote commenter guyha in response to Bandcamp's announcement.

These shifts are a reminder that what appears to us as "free" online actually has its costs. While digital distribution often feels free, bandwidth and server space are not. Everyone who used Bandcamp for free music -- either because they believed in the values of free culture and/or as part of a larger business model -- essentially added up to dead weight as far as Bandcamp's business model was concerned. Now we understand that Bandcamp intends to rely on artists to bring money to the site, whether it's through sales or an out-of-pocket investment.

For artists, digital tools don't change the fact that good music takes a serious investment of time and resources to create. And this move further aligns Bandcamp's interests with the site's most economically successful artists (Sufjan Stevens, Desden Doll Amanda Palmer). Artists who sell over $5,000 share 1/3 less of their profits, and every $500 in sales earns another 1,000 free downloads. Meanwhile, those who don't sell will need to pay bandcamp for the privilege to offer over 200 free downloads, thus financing the aforementioned incentives for more artists who pass the threshold. It's an ironic twist for the site which was once considered a key player in the netaudio community.

Bandcamp has placed a concrete value on exactly how much they think free music is worth, and while it was done from Bandcamp's perspective as a hosting platform, this perception will inevitably trickle down to the artists who use the platform (and impact many who don't). As one user pointed out, this is "going to cause artists to be more stringent on what they offer for free." As a musician myself, I was drawn to Bandcamp specifically as a place to host free music that I didn't feel comfortable putting on the FMA (I don't want to 'curate' too much of my own stuff on the FMA, which I view more as a place to offer good 1st impressions, like radio singles for the internet era, than entire discographies). I also liked Bandcamp's ability to trade free downloads for email addresses, and am working my way towards a sizable mailing list. I'm not sure what I'll do once I use up the rest of my freebies, and I hesitate to start charging for downloads just because Bandcamp wants me to pay my way... I'm curious to hear what other Bandcamp users are thinking.

The question of "who pays for free music" kept coming up last week at PopKomm/all2gethernow, where I took part in panels concerning "The Economy of Open Content and its Archives" and "Music's Social and Economic Value". We all seemed to agree that free music is valuable, that it has become a crucial tool for artists to reach audiences, and these ideas were reiterated by everyone from label-owner/artist Jason Forrest to Scott Cohen who's in the business of selling digital music (he founded The Orchard) and manages The Raveonettes. So there's no question that free music is valuable not just to free culture and the netaudio scene but often as part of a larger marketing plan for professional artists. Most importantly, free music is a way for struggling artists to undercut last century's distribution bottlenecks, and Bandcamp's imposition of a business model that privileges certain artists over others has some interesting parallels between a system we all thought the web had conquered.



tmray on 09/13/10 at 03:07PM
I personally didn't like the way it was handled. On the blog post he was passing the blame on to the smaller artists saying they were screwing it up for everyone else. Like this statement below.

"It’s obviously unfair to burden every Bandcamp artist with the costs of a few outliers giving away hundreds of thousands of free downloads, so we’re making some changes to button that up."

Blaming us for using what they offered. I just thought that was unfair.
SECTION 27 on 09/13/10 at 03:21PM
They bused to be a great resource for netlabels to host higher quality downloads and I even used it with my own music, but i want to keep our music free, asking to pay would defeat the spirit of being a netlabel.
icastico on 09/13/10 at 04:31PM
I don't have a problem with how bandcamp handled everything. If people are looking to give music away from free, the FMA or Internet Archive are quick, reliable, and easy (as are a lot of other options). For me the thing bandcamp has going for them is support for the "name your price" paradigm. Like public radio or PBS, or FMA that rely on donations, name your price models suffer from free-riders, but if the information about costs are clearly communicated to the listeners, enough will provide support to keep the project afloat.

tmray, I am not sure if someone who is giving away 100,000 downloads counts as a smaller artist. If they did it "name your price" and got an equivalent return rate to what I see, they would be making $27,000 off of those 100,000 downloads. Very, very few of the smaller artists on bandcamp will ever reach their free download limit.

My own guess is that music consumers will be moving more and more to music services like Rhapsody. How bandcamp and other services adjust to that model will be interesting to watch.
happypuppyrecords on 09/13/10 at 09:23PM
I'm also not surprised that BC did this. I would also wonder, if you're that popular and your fans want to download for free that MUCH, you don't belong at Bandcamp!

I think it was mostly to curb those from using the site for the free downloading bandwidth (when they obviously have the money to pay for such a thing) or stop those for using it strictly as a promotional tool.

However, it isn't that tough to deal with.. if you want to post free music for free, there is FMA (Jason I understand your uncomfortability and respect you for it) but there's also!
jason on 09/13/10 at 09:49PM
very interesting to hear people's feedback, online and on twitter. The biz model makes total sense and i like how it's structured to offer a certain amount of free before they start charging, but it's a definite shift away from netaudio, as well as a reminder that what appears to be free online often has hidden costs. Like the FMA itself... but don't worry, we're never gonna sell out!
jason on 09/16/10 at 05:14AM
Bandcamp responded by updating their model so that the 200 free downloads refresh once every month, rather than 1-time only, heres the announcement --

-- seems much more reasonable and addresses some of the above concerns. For example, we wouldn't have to worry about stumbling across an obscure, abandoned bandcamp profile in 2 years, and not being able to download any of the tracks because the artist's freebies ran out, even though the artist wanted them to be shared freely. But who's to say the business model won't change again in the coming years? Anyway i hope this model's sustainable
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