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How Much Does Bandcamp Pay Per Song

Bandcamp is considered one of the best places to make money among artists. He gives them a significant profit and, most importantly, fairly distributes the earned funds, at least according to the artists themselves.

When it launched in 2008, the founders of Bandcamp wanted their site to be for musicians what WordPress once was for writers: a way to showcase your creativity online.

 When, after the launch, the musicians began to upload their albums to Bandcamp, the company realized that they had created an infrastructure for a marketplace that could become an alternative to the iTunes Store that dominated at that time.

At the same time, they did not follow the lead of Apple Music, which set standard prices for all albums. Instead, the creators of Bandcamp were inspired by Radiohead’s strategy – in 2008, the band allowed listeners to decide how much to pay for the album. The startup took a cue from this group and gave the musicians complete freedom in pricing.

With the help of this model, an American company has been profitable since 2012 and brings stable profits to its few investors. According to estimates, the service’s net income for 2021 was $21 million. A group of researchers conducted a detailed analysis of Bandcamp sales for September-December (the platform publicly reports on each transaction in real time) and then extrapolated it for one year.

So, in four months, 6.7 million works for $61 million were sold through Bandcamp. On average, listeners paid $9.09 for works and preferred to overpay 1.24 times their original cost. For works with a price of 0, Bandcamp users most often paid $1.35. The largest surge in purchases occurred on Fridays.

Bandcamp’s largest revenue source was digital album sales, at $24.8 million. Only a little less was the income from sales of physical media – $ 22.2 million.

The most active users of Bandcamp were residents of the US (2.9 million purchases), the UK (1 million) and Germany (538,000).

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Bandcamp is a rare type of profitable IT company that provides people with an outdated-looking model that encourages them to shop and engage with music creators.

But what about Spotify? Most of the time, the company loses money. Streaming acquires the rights to popular podcasts a la Joe Rogan Experience and makes deals with major labels. In the meantime, most Spotify users still opt for the free version of the service.

Music market experts argue that Spotify’s business model ignores even the basic principle that 80% of purchases are made by 20% of buyers. Streaming also cuts off direct relationships between users and musicians. Moreover, if possible, the company will gladly give their work to algorithms – it constantly hires specialists in generative music.

So Bandcamp is profitable and Spotify is not. The first increases the value of music, the second – the hype around its own functions. Bandcamp has built a modern business model on what seems to be outdated, while Spotify has built an outdated business with modern technology. And, perhaps most importantly, the founders of Bandcamp respect the musicians. And for a creative person, a fair assessment of his work plays a crucial role.

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