The videogame company that is challenging some of the biggest tech companies in the world is buying the music company that wants to challenge the prevailing tech business model in that industry.
Epic Games Inc. announced Wednesday that it is buying Bandcamp, an online music shop that allows musicians to set up their own storefront and keep more of the proceeds from sales than streaming services such as Spotify Inc.
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It is an interesting fit, since Epic has challenged the prevailing business model in its industry by suing Apple Inc.
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and Alphabet Inc.’s
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Google, claiming that they are using monopoly power to illegally control the mobile-gaming industry.
“Fair and open platforms are critical to the future of the creator economy,” an unattributed Epic blog post reads. “Epic and Bandcamp share a mission of building the most artist friendly platform that enables creators to keep the majority of their hard-earned money.”
For more: Will videogames be the Achilles heel for Apple, Google in antitrust investigations?
Bandcamp, founded in 2008, allows artists to sell digital music as well as physical goods such as records and merchandise, and takes 15% of the total, with artists also on the hook for payment-processor fees. The Oakland, Calif., company says the result is that 82% of all money spent on its site goes directly to the artist, with that total nearing $1 billion for the life of the site, according to a Wednesday blog post from Chief Executive Ethan Diamond.
“While over the years we’ve heard from other companies who wanted us to join them, we’ve always felt that doing so would only be exciting if they strongly believed in our mission, were aligned with our values, and not only wanted to see Bandcamp continue, but also wanted to provide the resources to bring a lot more benefit to the artists, labels, and fans who use the site,” Diamond wrote. “Epic ticks all those boxes.”
Epic Games has remained private despite finding huge success with “Fortnite,” a videogame that focused on an online “Battle Royale” format that won fans and spawned imitators. The company has welcomed outside investment, however, including from Chinese tech giant Tencent Holdings Ltd.
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which has its own NYSE-listed music-streaming subsidiary, Tencent Music Entertainment Group
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as well as investments in Spotify and music labels including Warner Music Group Corp.
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Diamond said that Bandcamp will continue to operate independently and promised the core service will not change, specifically pointing to the control and revenue split artists receive as well as Bandcamp Fridays, when the service waives its revenue share on the first Friday of each month. He said that the Epic deal will help the company expand internationally, and shore up new efforts such as pressing vinyl for artists and its own app.
Bandcamp’s app could lead to another front in Epic’s war on the mobile duopoly of Apple and Google. Epic, which runs its own store for videogames, has objected to the makers of the two largest mobile operating systems, iOS and Android, taking up to 30% of all payments made on their platform, and have specifically pointed to the sale of videogames and in-game offerings in their lawsuits, which were spawned by the company blatantly breaking Apple and Google rules in “Fortnite.”
See also: Epic Games CEO Tim Sweeney says ‘Apple must be stopped’
Meanwhile, Bandcamp has avoided attempting to sell music through its mobile app so far, according to Ron Knox, a Bandcamp customer who has written articles for the music site and is a researcher and writer for the Institute for Local Self-Reliance, an organization that advocates against corporate concentration and for local control of businesses and power. Bandcamp’s mobile app allows users to access music purchased online, but does not allow in-app sales that would be subject to Apple’s fees, Knox noted, pointing to previous remarks by Epic CEO Tim Sweeney on Bandcamp’s approach.
“If anyone is familiar with this issue, it’s Epic,” Knox said. “If anyone understands the legal argument around Apple’s monopoly power over its app store, it’s Epic.”
While the path Epic might be considering for Bandcamp in regard to its fight against Apple and Google is not obvious, Knox said that Bandcamp’s current situation is.
“What I can almost guarantee is that Bandcamp knows if it could sell on iOS, it would make more money, and it would make more money not just for itself but the artists and labels that rely on Bandcamp for a piece of their revenue. There’s huge motivation for Bandcamp to do that.”
Lateef Daumont, an artist better known as Lateef the Truthspeaker in his work with the hip-hop label Quannum Projects, praised Bandcamp on Wednesday, saying “in my opinion, it is the best platform for artists, period.”
Daumont, born and raised in Oakland, like Bandcamp, has performed and recorded with Quannum since he met other members in college at the University of California, Davis, in the 1990s, including Lyrics Born, DJ Shadow and the members of Blackalicious. Perhaps best-known as part of Latyrx, a duo with Lyrics Born, Daumont has taken on responsibility for the label, allowing him to see the inside of the industry as both an artist and executive.
“All other platforms benefit tech workers, and pay artists an amount that I’m not even sure is technically legal. It’s definitely beneath minimum wage considering the hours of work required. And it is definitely exploitative,” he said.
See also: Music producer Swizz Beatz on why streaming services should pay musicians 50/50
Daumont said he was hopeful about the acquisition. “My understanding is that the merger makes it possible for them to build out all of the bells and whistles they want for the platform while still allowing the staff and [business] to run independently,” he said.
Other musicians were not as optimistic. Ryan Wisler, a producer and vocalist who performs as Kno, said his longtime rap group CunninLynguists “were one of the first artists to adopt the platform as a main hub for the distribution of our digital and physical sales,” but he does not believe the Epic acquisition will lead to a better experience for artists on Bandcamp.
“Hopefully someone at Epic saw how badly Spotify has been hammered the past few years over their approach with artist compensation and thought, ‘Hey, let’s find a way to do it right,’ but I’d probably be deluding myself if I thought that’s what this would lead to,” he said. “The truth is the platform will be injected with unhelpful algorithms and hurdles, the payout system will ‘expand’ only to then bottleneck us artists into whatever Epic truly wants, and it’ll be a shell of itself in a few years.”
