Bandcamp CEO Explains Payment Policy Changes

While several artists have cried foul, the shift actually makes it easier for consumers to buy more music.

On October 15, New York-based electronic composer Rafael Anton Irisarri rattled off a series of frustrated tweets about a little-reported change in how Bandcamp pays artists for digital sales. “Bandcamp doing digital sales math just like Beatport does,” he wrote. “So much for listeners’ money reaching the artists directly! #ShameonThem.”

Irisarri’s were only the most heated in a string of recent tweets by DIY artists asking about Bandcamp’s shift to having payments for digital sales flow through the service, rather than directly to the artists. The online music platform’s co-founder/CEO, Ethan Diamond, confirmed the move to Billboard, noting that Bandcamp’s revenue share, which starts at 15 percent for digital downloads and 10 percent for physical product, remains the same.

Diamond says Bandcamp made the switch, which it announced to artists on July 16 and finished implementing on September 17, so it could make several updates, “all of which are about increasing artists’ sales.” The transition will allow Bandcamp to support credit cards (currently it supports only PayPal); fans will be able to pay all at once for a shopping cart containing items from multiple artists (currently they must check out separately for each artist); it will also be able to offer gift cards. While payments for physical sales still flow directly from fans to artists, Diamond says the longer-term goal is to have those revenues flow through Bandcamp, as well, for the same reasons.

“Bandcamp’s revenue share model means that we only make money when our artists make a lot more money,” Diamond says. “That approach keeps our interests aligned with those of the artists we serve. This change will streamline the way fans pay artists on Bandcamp, and will give fans more ways to pay artists on Bandcamp. Getting paid instantly was great, but getting paid more money, at a ‘cost’ of only a 24-48 hour delay in payment (when the industry standard is 30 days), is better.”

Bandcamp says it has paid out $126 million to artists and independent labels since it began in 2008, including $3.6 million in the last 30 days.

And even though Irisarri tells Billboard that he continues to have questions about his pay statements, “even with all its inherent flaws, I still use Bandcamp as a main platform for generating income.”