Bandcamp Updates

From our view here at Bandcamp HQ, yesterday’s launch of Amanda Palmer Performs the Popular Hits of Radiohead on Her Magical Ukulele less resembled a record release than a coordinated strike of ravenous piranha. In one three minute period, her fanbase snapped up $15,000 in music and merch. It didn’t let up much from there: 4,000 digital EPs were sold, the vinyl sold out, most of the high end packages disappeared in minutes, and at the time of this writing, it looks like every other package will be gone in a matter of days. Late last night I caught up with Amanda’s Man-Who-Make-Internet-Go, Sean Francis, just before he passed out (he’d slept five hours in the last 48).

Congratulations on the release! Is it true that you guys did it entirely independently?
Thanks, and that’s correct – no label, and no manager for the most part. This project has been handled by four people: Amanda, myself, Beth [Hommel], and Hayley [Rosenblum] – interfacing with various artists and professionals (like the producer) when and where necessary.

Tell me a little bit more about your approach. What were some of the key things you did that led to the success you’re now seeing?
Each one of us – no matter what our individual role – cares a lot about what and how the fans consume…what they like, what they don’t buy, what they want to purchase, and how they want to purchase it. From [Amanda’s former band] The Dresden Dolls’ first record right up to this one, we’ve been fine tuning the process. That’s one of the reasons, for example, that we skipped CDs for this release. Time and time again, we heard fans say “I don’t even use CDs, but I bought this to support you.” So we listened to that, and started talking with the fans about it not being a dirty thing to pay for digital music. There’s no shame in putting money into an artist’s pocket and not getting some sort of physical good for it.

That said, you also put together a number of unique physical packages for this release, including a limited edition cherry red LP. Were you getting lots of requests for vinyl?
For years, people asked for The Dresden Dolls’ albums on vinyl. When Amanda announced her solo record, the first question we saw was would it be available on vinyl. Evelyn Evelyn was the first release wherein we actually had some form of control, and by going with our gut and making something that we felt WE would want as fans, it became clear that other fans wanted it that way as well.

The packages here cover a pretty broad price spectrum. This multi-tier approach has gotten a lot of buzz lately — do you think it’s the model for artists going forward?
We tried to avoid being too presumptuous going into today – but from what fans had been suggesting they wanted and what we saw with Evelyn Evelyn, we felt that this was going to be the most sensible business model for this release. We’re all happy that this seems to be becoming a more accepted form of distribution, but we want to keep evolving (and I wouldn’t be surprised if the next thing we do isn’t AS multi-tiered).

Are you happy with the way the release has gone thus far?
We couldn’t be happier. We hoped for far less than what’s happened, braced for the worst, and were floored by how wonderful it’s turned out. We’ve said that this is an experiment from day one, but to see such positive response from the fans, and to have so many people tell us that we’re doing things right? It’s hard for gross earnings to trump knowing we made the fans happy, but being able to see both of those elements walking happily hand-in-hand is GREAT.

You chose to include a download of the record with every one of your packages. Why?
We wish we could have been doing that all along. It’s such an obvious necessity. We WANT people to have the music, why would we deny the fan – or (arguably equally important) potential fan – the ability to listen as soon as possible? It’s just…obvious. We started a thread on our message board chronicling pictures of fans listening to the record, and saw a lot of people tweeting photos and stories of their first “experience”…had we made everyone wait, I know that excitement and buzz would’ve been different.

Is the record available on iTunes yet?
Absolutely not. We have nothing against iTunes, it’ll end up there eventually I’m sure, but it was important for us to do this in as close to a DIY manner as possible. If we were just using iTunes, we couldn’t be doing tie-ins with physical product, monitoring our stats (live), and helping people in real-time when they have a question regarding the service. Being able to do all of those things and having such a transparent format in which to do it has been a dream come true. We all buy stuff on the iTunes store – or AmazonMP3 or whatever – but it’s not THE way artists should be connecting to fans, and it’s certainly not the way someone is going to capture the most revenue on a new release.

So you think you’ll do better by selling this release directly to your fans first, as opposed to selling through iTunes or Amazon from the very start?
It’s nice to see a check roll in from those places, but in-between shuffling off a (large) percentage of revenue just for being on there, and the fact it would’ve been weeks (if not months) ’til we would’ve seen a dime…I don’t think we’ll make more money this way, I know we will, and I know we did. In six hours.

Even with our recently announced revenue share plan?
The revenue share is both something we’ve been aware of and looking forward to. Seeing it materialize was exciting for us not only because it was something which will hopefully sustain the site for some time to come, but also because it was good — best deal on the block, we think. Why the hell wouldn’t we want to support something which has so directly allowed us to find fuel to grow?

People are going to think we’re dating. Could you please tone it down?
Heh.

Every track on the EP is available for streaming. Do you think that hurt your sales? Do you think you’d make more money if the tracks were only 30-second snippets? Or if all but one or two were hidden?
We’re not pretending that people can’t get the record “illegally” (see our blog post announcing the release) – but I’ve yet to hear anyone say that because they can stream the record (or because they were able to hear it in advance), that they didn’t get it. To break it down in a more literal sense: we enabled a stream (and lossless-quality-sale) of the record more than a day in advance of the physical product being launched. If in some way that hurt our sales, I’m not aware…we sold out of numerous packages in under a few minutes. What I did see when we launched that stream, the feedback was overwhelmingly positive, and fans were saying in droves that they couldn’t wait to buy it.

You decided to let your fans name their price on the digital EP, with the minimum set to 84 cents (representing the amount owed to Radiohead for playing their music, plus payment processing fees). How’d that work out? Are fans paying more than the minimum?
Part of the reasoning behind doing the release that way was that we wanted to lend some transparency to the system by which an artist (in this case Radiohead) receives a royalty check. We were urged by numerous parties to set our minimum donation to a higher price point – and I don’t think anyone would’ve been turned off had we set it to $3 or $5 – but we saw that people were more than happy to not only pay for the music, but pay extra for it: downloads are averaging around $5, and one generous comedian even paid $100.84.

Nice. What would you most like to see Bandcamp do next?
Optimize the stores for mobile devices and add a shopping cart.

Amen to that. What’s next for Amanda?
What’s literally next for Amanda is preparation for Cabaret – she won’t be doing any real touring on this EP, but will be performing with some longtime collaborators (virtuoso pianist Lance Horne, her high school drama teacher Steven Bogart, and Danger Ensemble impresario Steven Mitchell Wright) at the A.R.T. through September and October in Cambridge, Mass. After that? Well, we’ve told the fans to keep Halloween clear. Amanda may or may not have some obligations somewhere on the east coast to conjure up some friendly ghosts from the past and do a really special show. Maybe.

Awesome. Thanks so much for your time Sean. Pleasant dreams!
Ha. Thank you!

In the past six months, you guys have used Bandcamp to sell over $1 million USD in music and merch directly to your fans. The pace of those sales is increasing rapidly, and last week we even saw an artist make it to the Billboard charts on the strength of her Bandcamp sales alone. It’s been awesome to witness, and we’re amped to carry right on, full steam ahead, building out new features, honing existing ones, strengthening our infrastructure, and generally making things better and better. Perhaps most importantly though, we want to do so in a way that’s sustainable long-term, and ensures that we’re here supporting musicians far into the future.

So, as long promised over in our FAQ, we’ll soon begin doing a revenue share on Bandcamp sales. Here’s how it will work:

Bandcamp’s share will be 15% of each transaction, dropping to 10% as soon as your all-time sales exceed $5,000 USD.

The revenue share won’t go into effect until early August. Until then, Bandcamp’s share remains zero. We’ve based the percentages on what works for the business and what many of you have already told us feels fair, but there’s still plenty of time for more feedback, so bring it (preferably in the comments below).

The revenue share rate for existing accounts will be based on all your sales to date. That is, we’ll look at your all-time sales and base your rate on that total. This means many of you will start at the 10% rate from day one. Note that we’ve just launched all-time stats, so you can easily see where you stand.

Your rate will be based on sales to your PayPal email address, not your Bandcamp account. In other words, if you’re a label and have five artists all using the same PayPal account, your rate will be calculated by looking at the combined sales of all five of those artists.

The basic service will remain free. Bandcamp only makes money when you make money. We considered building the business around advertising, but…well, OK, we never really considered that. We did consider building it around subscriptions, but under the subscription model, given the option of either developing a feature to increase your sales by 20%, or dinking around with service tiers to try to boost our subscriptions by 20%, we’d have to choose the latter. By building the business on a revenue share, our interests are perfectly aligned with yours: we only succeed when you succeed.

Questions, Answers

How will the revenue share work? We’re still hashing out the exact mechanism, but the money will continue to flow directly from your fans to you. Loads of you have told us how much you like that aspect of the service, so we’re planning to leave it that way. We’ll of course provide an interface for easily viewing all your transactions and the associated share split, and we’ll provide details of how the share will work by the time it goes into effect.

Do these rates include PayPal transaction fees? No, processing fees are separate. Those rates are here, including details of what you can do to minimize them.

How do your rates compare to the alternatives? We aim to give you a clear financial incentive to direct your fans to your Bandcamp-powered site first, so we’ve made our rates far lower than iTunes’, and very competitive with other music distribution sites. We won’t subject you to one of those competitive matrices that’s out of date the moment it’s published, but we certainly encourage you to do some research and compare (but pack your magnifying glass, fine print abounds in the music biz).

I am angry. What should I do? Leave a comment, we’d be happy to consider your feedback. If you are angrier than that, head over to your profile page and click the link that says “permanently delete this account.”

I am happy. What should I do? We’d love to hear from you as well, so please leave your thoughts below.

I desire an inspirational conclusion. What should I do? Read on, because we want to thank you all again for using Bandcamp. We’re honored to have been entrusted with such an important aspect of your career, and we couldn’t be more excited to keep cranking away on Bandcamp for a long time to come!

Update July 21st, 2010

Lots of great feedback in the comments, thanks everybody! A few thoughts, tweaks and clarifications in response:

Several of you suggested that new accounts should get their first $x in sales rev-share-free. We’re looking at the business impact of doing so, but also mulling over the fact that the cost of trying out the system is already $0 (no setup or listing fees, no charges for streaming or storage, every account comes with free download codes, etc.).

Some felt that the lower rev-share for high volume sellers was unfair to the little guy. We see your point, and may offer a Pro service option to high volume sellers instead. If you think you might fall into that category, please get in touch — we’d love your help defining what that option could look like.

For physical items, the revenue share will apply to the base price of the item only. It will not apply to shipping or tax.

While we’re still in the rev share’s early days, the rate on physical items will be discounted to 10%. It will eventually be the same 15% share as digital, but we want to get a few more of our e-commerce features done first. A few people wondered why there would be a revenue share on physical at all. The short answer is that Bandcamp is a music retailer. We believe that listening to music is critical to selling music, and the infrastructure to support that (web servers, bandwidth, actual customer care, etc.) is factored into our costs. Furthermore, we’ve already invested in a boatload of features to help you sell your music, features like download formats, sharing tools, stats, chart reporting, mobile goodness, download and discount codes, pricing flexibility, merch management…the list goes on. We of course plan to keep on developing the product in response to your feedback, and the cost of all that development doesn’t vary between physical and digital. If you don’t care about any of those features, if all you’re looking for is a place to host an image and a link to PayPal, there are definitely other services out there that would be a better fit. For the rest of you, keep telling us how you’d like to see the service improve, and we’ll keep improving it.

One or two people wondered whether they’d still be able to use the site to give away music for free. Yep, absolutely. Preliminary details on that are here.

There were also some questions about replacing PayPal. We intend to expand our payment options in the future, but we’re still a small (now seven person) company and that feature is getting prioritized along with every other mega-important to-do. In the meantime, our payment success rate (the percentage of people who enter the payment flow and then complete their purchase) already hovers near 70% (and hit 75% yesterday), which is excellent for any e-commerce site.

We’ll undoubtedly be fine-tuning the business model more as we go, so please take it all in the iterative spirit in which it’s presented. Thanks again!

A few months ago, we launched BCWax, an unlabel dedicated to the production of high-quality physical artifacts of some of the best independent music hosted on Bandcamp. You can read more about our motivations, but primary among them was to promote the creation of the kind of merch we ourselves would like to buy, and refine the system for selling it. So we detailed every resource used to produce our first release, and developed a slew of new features to help deliver it. Not that we’re more than .01% responsible, but here it is a relatively short time later, and the quantity, quality and variety of physical goods sold through Bandcamp is truly staggering. Sweet!

Today, we’re excited to announce our second release, Get It Together, from New Zealand funksters Sola Rosa. You can pick it up right here (enter discount code “wax” during checkout to knock 15% off). We hope you’ll have a listen because above all, it’s great music from hard-working, independent musicians like yourself. But we also hope you’ll take a look because it’s a gorgeous limited edition package (once again designed by Dan Stiles), and it’s exactly the sort of thing we’d like to purchase from every one of our favorite artists. It includes a beautiful LP (this time on translucent ice blue vinyl):

…stunning 12″x12″ silkscreen print of the cover (signed and numbered and using a metallic gold ink not present on the jacket):

…and of course an immediate download to keep you entertained while you wait for the mailperson.

If you already picked up our first release from Sophie Madeleine, thanks so much. We think this one will make a fine addition to your collection!

Click here to listen to and buy BCWax02, Sola Rosa’s Get It Together. Enter discount code “wax” during checkout for 15% off.

Our aspiration here at Bandcamp has always been to power the site that you consider yours. As such, we limit our branding to the small logo you see in the footer, and happily enable you to banish the “bandcamp” from your URL in favor of your own custom domain. But we do still frequently hear from people looking for buttons/badges/what-have-you to help spread the Bandcamp word (thanks!), so we finally put some together (click for code/affirmation):