Bandcamp Songtradr Acquisition Leads to Layoffs and a Lawsuit

Bandcamp describes itself as an “online record store and music community,” offering fans the opportunity to directly purchase song downloads from the artist, with a remarkable 82% of all sales going straight to the artist.¹ This stands in contrast to the prevalent subscription streaming model, which has rapidly become the go-to method for music consumption. Leading subscription audio services compensate artists with rates ranging from approximately $0.01 (Apple Music) to $0.003 and $0.005 (Spotify) per stream, following their proportional payout models.^{2 3}

On Bandcamp, users gain unlimited streaming access only after making a purchase, and this privilege extends solely to the specific tracks they have acquired. This mirrors the traditional record industry landscape, where revenue from physical copies would directly fund artists, bypassing intermediaries like Spotify and Apple Music in the song release process. Bandcamp serves as a dedicated effort to preserve a market that has been nearly eclipsed by the rise of streaming.

The evolving strategies that Bandcamp employs to navigate the ever-changing music industry will undoubtedly set a precedent for the future of music commerce. This journey raises intriguing questions about the potential transformation of an industry moving towards complete streaming dominance and what it might entail forgoing a traditional retail model.

On October 29th, 2023, Bandcamp United, the union representing Bandcamp workers, initiated an Unfair Practice Violation Claim against Songtradr and Epic Games. This action follows Epic Games’ acquisition of Bandcamp in March 2022, which led to the dismissal of approximately half of Bandcamp’s workforce. Subsequently, Bandcamp was sold to Songtradr, a Business-to-Business (B2B) music licensing service.⁴ Reports indicate that the job cuts were distributed “fairly evenly” across all departments, except for customer support and editorial, which bore a more substantial impact.⁵

When Epic Games acquired Bandcamp, questions were raised about whether Epic cared about what they were purchasing, such as “what did a video-game company need with a music retailer like Bandcamp?”⁶ Less than two years later, these concerns were realized when Epic announced a layoff of 16% of all their employees. Out of 830 people laid off, 58 were Bandcamp employees, which was “roughly half of the staff.”⁷ This included “three of the six non-management staffers at its in-house publication, Bandcamp Daily — as well as eight elected members of the union’s collective bargaining committee and 40 of 67 members of its collective bargaining unit, per a press release announcing the claim.”⁸ Four days before the layoffs, Bandcamp United and Paul Wiltshire, CEO of Songtradr, met to “discuss the future of Bandcamp United at Songtradr.”⁹

An inherent misalignment between the two enterprises seems to have contributed to the layoffs. Bandcamp operates on a Business-to-Consumer (B2C) model, focusing on retail practices, while Songtradr adheres to a Business-to-Business (B2B) model that diverges not only in functionality but also in philosophical approach from Bandcamp.¹⁰ Since Songtradr specializes in licensing mood/atmospheric music to commercial clients such as advertisers and content creators, music is heavily commodified under their model. This is strongly antagonistic to Bandcamps vision that music is unique, unreplicable, and above all, human. The overwhelmingly commercial nature of music seems to be a symptom of the modern music industry at large, which provides seemingly infinite songs at the push of a button. Further, in the age of digital streaming, artists are paid less than they would for physical sales and radio play, encouraging quantity over quality.

As of 2022, downloads only make up 3.6% of total global recorded music revenue (IFPI), Bandcamp still turns out a significant profit in this percentage; as of November 16th, 2023.¹¹ Their website reported that, “Fans have paid artists and independent labels $1.2 billion using Bandcamp, and $15.8 million in the past 30 days alone.”¹² Total streaming makes up 67% (IFPI) of Global Recorded Music Revenue, and for major player Spotify, total revenue increased by 11% in the latest quarter, totalling $3.6 billion.¹³ The end of Bandcamp could signify a significant shift in the music industry, as their model is the antithesis to the modern streaming industry.

In response to the layoffs and Bandcamp being sold to Songtradr, Bandcamp United (Bandcamp’s union) filed an unfair labor practice violation claim with the National Labor Relations Board (NLRB) against Songtradr and Epic Games on October 29th, 2023.¹⁴ The suit claims that Songtrader and Epic Games “violated the National Labor Relations Act (NLRA) of 1935 by engaging in unfair labor practices. Songtradr finalized their acquisition of Bandcamp from Epic Games in September, triggering mass layoffs at the music distribution platform earlier this month.”¹⁵ The layoffs included all 8 members of Bandcamp United’s collective bargaining committee. Another crucial factor in the NLRB filing is that Songtradr did not offer new jobs to any of the fired committee members. In the document, the union argues that Songtradr discriminated against workers based on their employment responsibilities.¹⁶

The union’s demands include “employment offers for all workers; clear, consistent, and equitable voluntary severance offers; and recognition of their union at Songtradr with a speedy continuation to bargaining, while maintaining all the progress that has been made at the table.”¹⁷ Bandcamp Unitied’s revealed their intent to return to the table with Epic on November 9th, 2023, to continue negotiating the severance terms for those who have been laid off, but no resolution has been reached yet.

If the claim is to move forward, it first needs to be investigated by a NLRB agent prior to a ruling deciding if Bandcamp United’s claim is warranted and if Songtrader and Epic Games indeed violated the National Relations Act.¹⁸ If they are in violation, the board can enforce a rehiring process of employees who were laid off and potentially offer remedial pay. However, this process could all be avoided if Songtrader and Epic games meet the union’s demands.¹⁹

Since Songtradr’s acquisition of Bandcamp in September 2022, concerns have emerged regarding the feasibility of a Business-to-Business (B2B) company effectively managing and assimilating a Business-to-Consumer (B2C) company, especially one whose fundamental mission conflicts with its new ownership. This situation prompts the broader question of the future of music sales for artists, their communities, and the art itself, particularly if a download model that financially benefits artists proves unsustainable.

The meager income generated from streaming often compels artists to seek alternative revenue streams, predominantly through live performances and merchandise sales. Unlike top-tier artists, the majority find that Bandcamp’s fan-driven model provides a more lucrative avenue. Consequently, the potential downfall of the company could spell a decline for independent artists who rely on platforms like Bandcamp for substantial financial and artistic support.

Streaming platforms tend to favor signed artists backed by labels capable of propelling them into the mainstream, facilitating tours, and merchandise sales. For independent artists, platforms like Bandcamp play a crucial role in sustaining themselves financially and nurturing their artistic endeavors. The outcome of the Bandcamp lawsuit holds significant implications for the company’s future. Depending on the judgment, it could establish a precedent for whether the music industry is ready to transition away from fan-driven, retail-oriented music for independent artists altogether.

Endnotes
1. “About Bandcamp”, accessed November 19, 2023, https://bandcamp.com/about.
2. “Apple Music Insights: Royalties,” Apple Music for Artists, June 2, 2021, https://artists.apple.com/support/1124-apple-music-insights-royalty-rate.
3. Ennica Jacob, “How Much Does Spotify Pay per Stream? What You’ll Earn per Song, and How to Get Paid More for Your Music,” Business Insider, February 24, 2021, https://www.businessinsider.com/guides/streaming/how-much-does-spotify-pay-per-stream.
4. Philip Sherburne, “Is Bandcamp as We Know It Over?,” Pitchfork, October 17, 2023, https://pitchfork.com/thepitch/is-bandcamp-as-we-know-it-over/.
5. Ibid
6. Philip Sherburne, Pitchfork
7. Ibid
8. Ibid
9. Raphael Helfand, “Bandcamp United Files Unfair Labor Practice Violation Claim against Songtradr and Epic Games,” The FADER, October 31, 2023, https://www.thefader.com/2023/10/31/bandcamp-united-files-unfair-labor-practice-violation-claim-against-songtradr-and-epic-games.
10. Philip Sherburne, Pitchfork
11. IFPI. “Global Music Report 2023.” IFPI, 2023. https://www.ifpi.org/wp-content/uploads/2020/03/Global_Music_Report_2023_State_of_the_Industry.pdf.
12. Bandcamp, “Bandcamp Fair Trade Music Policy,” Bandcamp, 2023, https://bandcamp.com/fair_trade_music_policy.
13. Marshall, Elizabeth Dilts. “Spotify Turns Profit, Adds 6 Million Subscribers in Q3 Following Price Hikes and Cost Cuts.” Billboard, October 31, 2023. https://www.billboard.com/pro/spotify-profit-revenues-rise-subscriber-growth-q3-2023/.
14. Raphael Helfand, The FADER
15. Ibid
16. Elias Leight, “Bandcamp Union Accuses Songtradr of Unfair Labor Practices,” Billboard, October 31, 2023, https://www.billboard.com/pro/bandcamp-union-accuses-songtradr-unfair-labor-practices/.
17. Evan Minsker, “Bandcamp Union Seeks Recognition from Company’s New Owner Songtradr,” Pitchfork, October 5, 2023, https://pitchfork.com/news/bandcamp-union-seeks-recognition-from-companys-new-owner-songtradr/.
18. Raphael Helfand, The FADER
19. Ibid

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