And now some genuinely great news in an otherwise unremarkable week: every aspect of Bandcamp’s business was up in 2016. Digital album sales grew 20%, tracks 23%, and merch 34%. Growth in physical sales was led by vinyl, which was up 48%, and further boosted by CDs (up 14%) and cassettes (up 58%). Every single one of these numbers represents an acceleration over last year’s growth. Hundreds of thousands of artists joined Bandcamp in 2016, more than 2,000 independent labels came on board (like Dischord, Merge, and Dualtone), and the rate of fan signups tripled. Fans have now paid artists nearly $200 million using Bandcamp, and they buy a record every three seconds, 24 hours a day, 365 days a year.
The record business overall did not fare as well. According to Nielsen, it grew 3% in the U.S. in 2016, while sales of digital albums fell 20%, tracks were down 25%, and physical albums dropped 14%. These declines are not at all surprising given the industry-wide push toward subscription music rental offerings, and indeed as the year came to a close, those services reached a combined 100 million paying subscribers. This milestone is being celebrated by some, but it is not good news for the vast majority of artists, and poses some serious problems for fans, labels, and music as an art form.
As more people subscribe to music rental services, the already paltry rates paid to artists are going down (and no, artists don’t necessarily make it up in volume). But it’s not only artists who are struggling. The companies built solely around subscription music rental continue to struggle as well. Some say the model is simply broken. The success of Netflix is often used as a counterargument, but the music business is not the movie business.
Longer term, if subscription music rental can’t work as a standalone business, then it will only exist as a service offered by corporate behemoths to draw customers into the parts of their businesses where they do make money, like selling phones, service plans, or merchandise. And when the distribution of an entire art form is controlled by just two or three nation-state-sized companies, artists and labels will have even less leverage than they do now to set fair rates, the music promoted to fans will be controlled by a small handful of gatekeepers, and more and more artists will be hit with the one-two punch of lower rates and less exposure. The net effect for music as a whole is worrisome.
Bandcamp provides an alternative to all of this because we feel strongly that an alternative needs to exist. The fact that we continue to grow, and that that growth is accelerating, tells us that many of you agree. We’ll therefore continue to build on a model that compensates artists fairly and puts them in control of their data, gives fans all the convenience of streaming plus the benefits of ownership and still allows them to directly support the artists they love, and works as a standalone business that’s 100% focused on music (we just had our 17th straight profitable quarter, while also increasing our staff by 43% last year). Impending thermonuclear apocalypse notwithstanding, we are incredibly enthusiastic about 2017. At least two of the half dozen things we’ll launch this year will astound you, and one may even cause you to make an unexpected vacation detour. We can’t wait. Thank you for being a part of it!
P.S. Don’t miss Bandcamp Daily’s Best of 2016.