Bandcamp had cultivated a distinctive music business model: it was profitable and favorable for artists, all while maintaining a popular editorial section. However, due to an unexpected corporate shift, approximately half of the employees at the Bay Area company are now facing job losses.
In early 2022, the Oakland-based company was acquired by Epic Games, known for titles like Fortnite and Gears of War. However, a mere year and a half later, in September, Epic Games revealed its intention to sell Bandcamp to Songtradr, a Santa Monica-based firm specializing in music licensing. Unfortunately, only 50% of Bandcamp’s employees received offers as part of this acquisition, as confirmed by Songtradr spokesperson Lindsay Nahmiache to SFGATE on Monday.
Out of Bandcamp’s 118 employees, 58 did not receive offers, while the remaining 60 did, as reported by Nahmiache. A Bandcamp employee, who requested anonymity in line with Hearst’s ethics policy, confirmed this on Monday, stating that approximately 60 people are no longer part of the company’s Slack. Additionally, a screenshot viewed by SFGATE indicated that Bandcamp co-founder and former CEO Ethan Diamond’s Slack account has been deactivated.
In an email viewed by SFGATE and sent on Monday to the remaining Bandcamp employees, Songtradr CEO Paul Wiltshire addressed the issue, saying, “I know there are open questions around why we did not hire everyone, and that losing team members is never easy.” He went on to explain, “Transparently, the financial state of Bandcamp has not been healthy. While the revenue has been consistent, over the past few years the operating costs have significantly increased, making it impossible to continue running the business the way it has been.”
Indeed, Bandcamp stands in stark contrast to many tech firms characterized by high spending and losses. Established in Oakland in 2008, the company’s growth was deliberate and followed a model quite different from the soaring revenues (and corresponding losses) of platforms like Spotify. In contrast to Spotify, which compensates artists with a small and variable fee for each play (determined by “an artist’s share of overall streams across the platform”), Bandcamp operates with a more transparent approach. It encourages listeners to purchase the music of artists and then takes a modest percentage from each sale. In fact, Billboard reported in 2021 that Bandcamp had maintained profitability for nearly a decade.