In this blog I will identify some of the strengths and weaknesses of Bandcamp, Spotify and Apple music’s ‘financial model’ and then evaluate the weaknesses and strengths these models have on established-touring artists versus new, upcoming artists.
Bandcamp
“Unlike Soundcloud and Bandcamp, where you can manage your music uploads yourself, digital aggregators assist by submitting your tunes across many online streaming and digital distribution channels.“ (Records 2018)
Bandcamp is a digital platform, which began in 2007 and doesn’t use aggregators. It allows artists to sell merchandise as well as copies of their music, both digitally and physically (e.g., vinyl).
This means that with no aggregators to promote the music, it also gives the artist more control over their product. Unfortunately, the platform doesn’t have the same subscriber base as Spotify or Apple Music and the platform is set aside, so aggregated music won’t show up on Bandcamp, leaving the artist to promote it themselves.
“The company takes between 10-15% commission depending on the type of sale.” (Hesse 2022)
They receive payment for goods or services within a day or two, which is substantially different to Apple and Spotify’s financial model.
Spotify reach approximately 500 million streamers (Novakovic 2023) and Apple Music about 88 million worldwide (Curry 2023) and return profits mostly to Record Companies who re-distribute these, paying royalties every three or four months to artists.
Evidence from the graph, source NMPA via Stassen 2023 shows the dominance they have in the US market, with more than two thirds of the entire streaming-subscriber base between them!
Aggregated Music Platforms
Spotify founded in 2006, in Sweden by Daniel Ek and Martin Lorentzon, launched its streaming platform in 2008, money from paid membership was used initially and after 100-million-dollar investment to access the US market, it now,
“12 years later, Spotify is available in 180 different countries.” (Sandefur 2023)
Apple Music on the other hand, launched in 2015 by parent company and tech-aficionados Apple. It was set up with a focus to become a
“worldwide live radio station from Apple.” (Curry 2023).
This is slightly different from Spotify, which focused solely on music streaming. By 2020, Apple’s streaming platform was available in 167 countries and by 2022:
(Curry 2023)
Pros and Cons for Artists
This advantage is highlighted when Bandcamp artists can receive payments within a couple of days whereas Spotify and Apple artists must wait months at a time for an extremely small dividend which may or may not accrue. The amount Spotify pay per stream is even less than Apple at .003 cent (compared to 0.0076) and take 70/30 split too, double what Bandcamp take and the 70% doesn’t go directly to the artist, it is usually paid in bulk to record labels.
This often means that the small increment is again divided up between whoever holds the rights to the music/song through distributors and record labels, giving them the power to control/divide the artist income.
This doesn’t bode well for artists as Shira Ovide outlines in The New York Times article 'Streaming saved music. Artists hate it' or as Joseph Sandefur describes:
“Multiple complex algorithms are employed to create recommendations for users and these recommendations take the form of playlists.” (Sandefur 2023)
The dangers of aggregators to the artist are communicated by Will Simpson of The Music Union when he expresses:
“We hope it will allow members to decide which aggregator works for them based on getting a better understanding of what you get for your money.” (Simpson 2021)
For upcoming artists, the slow progress away from streaming platforms like Apple or Spotify is financially rewarding but very difficult especially with the enormity of artistic content they have and give the listener access to. In terms of music library, both platforms seem to be about equal, as both have reported 100 million songs although:
“Spotify has grown to include more than just music. It now has five million podcasts as well as a selection of over 300,000 audiobooks.” (Novakovic 2023).
Wakeup Call
The accessibility of other services like podcasts and audiobooks will hopefully be a wakeup call for musicians and artists to begin to move away from services that don’t wholly serve their own or their fan’s needs. The direct accessibility artists have at Bandcamp with their fans, is further testament to their commitment they have to the artist as well as the fan, and although Apple do have a platform within their service to communicate with artists, they along with Spotify would seem to priorities investments in not just algorithmic computations but also in the visual stylishness, accessibility to lyrics and elevated experience from audio format upgrading (e.g. spatial and lossless audio) that a listener gets from their service, rather than re-invest it in artists and their music.
Forecast
(See Bar Chart Image - Synch Tank July 2022)
The Global music industry annual forecast above highlights the total income streaming services provides within the music industry, and it is set to rise.
Evidence
It is evident from the enormity of content and the subscriber base that both Spotify and Apple have, that they will continue to grow.
This should be a concern to both new and old artists alike, as it is recognisable that even some well-established artists have also kept away from Spotify or alternatively have refused to use the platform to stream their music like Neil Young and Cosby Nash Stills, and to clarify Grammy nominated song ‘Happy’ by Pharrell Williams made him $2,700 from 43 million streams. More recently, Adele requested Spotify remove their ‘shuffle’ feature, she argued:
“Our art tells a story, and our stories should be listened to as we intended”. (Meierhans 2021)
Conclusion
It would seem the use of features on both Apple Music and Spotify, let alone aggregators have removed the artist ability to control their own product and with already-written-into-the-platform agreements, which the artist must adhere to, and which also don’t leave room for negotiation, it’s no wonder they are becoming less trusted by artists. On the other hand, with boasts from such a smaller subscriber base that Bandcamp has:
“…
• Fans have paid artists and their labels $873 million using Bandcamp.
• In the last year they spent $210 million on
• 15.1 million digital albums,
• 7.0 million tracks
• 2.1 million vinyl records
• 950,000 CD ….” (Houghton 2022)
it’s not difficult to see that in the future, the smart artists (both new and established) will have their money coming from platforms such as Bandcamp and not streaming services like Apple or Spotify.
References:
Revolutionary Drones Records January 2018 https://revolutionarydronesrecords.com.au/digital-aggregators/#:~:text=Unlike%20Soundcloud%20and%20Bandcamp%2C%20where,streaming%20and%20digital%20distribution%20channels.
Murray Stassen July 2023 https://www.musicbusinessworldwide.com/spotify-had-44-4m-us-subscribers-in-february-apple-music-had-32-6m/
David Curry August 2023 https://www.businessofapps.com/data/apple-music-statistics/#:~:text=Apple%20Music%20had%2088%20million,million%20on%20the%20previous%20year.
Joseph Sandefur February 2023 https://scadconnector.com/2023/02/22/battle-of-the-brands-apple-music-vs-spotify/
Bruce Houghton January 2022 https://www.hypebot.com/hypebot/2022/01/bandcamp-shares-rare-stats-including-how-much-better-it-is-for-new-music-than-spotify-apple-music-amazon-music.html
Synch Tank July 2022 https://www.synchtank.com/blog/music-publishing-in-the-age-of-the-songwriter-report-part-4/
Song Trust 2022 https://help.songtrust.com/knowledge/what-is-an-aggregator
Milan Novakovic September 2023 https://www.business2community.com/statistics/spotify
Shira Ovid March 2021 https://www.nytimes.com/2021/03/22/technology/streaming-music-economics.html
Jennifer Meierhans November 2021 https://www.bbc.co.uk/news/entertainment-arts-59365019
Will Simpson March 2021 https://musiciansunion.org.uk/news/assessing-aggregators-for-digital-music-distribution
Brendan Hesse February 2022 https://lifehacker.com/which-music-streaming-service-is-the-most-ethical-1848508243#:~:text=Bandcamp%20isn't%20great%20for,define%20your%20ethics%2C%20obviously).