Plugged In: How Bandcamp Fits into Epic Games’ Long-Term Strategy
This week: Epic Games acquires Bandcamp -- and confounds the music industry.
Welcome to Plugged In, a Billboard column that features the unfiltered thoughts of the CEOs, decision makers and power players at the intersection of music and technology. I’m Micah Singleton, Billboard’s director of technology coverage, leading our reporting on streaming music and the startups that bridge the gap between two of America’s most important exports.
Epic Games, Bandcamp, and the Long Play
Epic Games, the parent company of Fortnite, shocked the music industry yesterday when it announced it would acquire the music marketplace Bandcamp for an undisclosed amount. Bandcamp says it will continue to operate as a standalone platform under co-founder and CEO Ethan Diamond, with plans to expand internationally.
“Behind the scenes we’re working with Epic to expand internationally and push development forward across Bandcamp, from basics like our album pages, mobile apps, merch tools, payment system, and search and discovery features, to newer initiatives like our vinyl pressing and live streaming services,” Diamond said in his statement.
More interestingly, in its release on the deal, Epic Games called out Bandcamp’s “important role” in its overall future.
“Bandcamp will play an important role in Epic’s vision to build out a creator marketplace ecosystem for content, technology, games, art, music and more,” the company noted in its statement.
Apart from the word “creators,” that vision sounds remarkably similar to the app-based ecosystems that exist within Apple and Google, both of which are currently being sued by Epic Games over alleged antitrust violations. (Epic lost its trial against Apple but both sides have appealed. Epic and Google have agreed to go to trial in January 2023.) Epic now owns a games store that boasts nearly 200 million users on PCs and pulled in $840 million in revenue in 2021 – plus now a music store thanks to Bandcamp.
I’ve spoken to several music executives since the deal was announced, and many pointed toward getting synch licenses as a major reason Epic Games would make this move — but others see a broader strategy in play.
“This is the first of many acquisitions, they are not stopping here,” one CEO says about Epic Games. The CEO compared the moves to BMG, which relaunched as a rights management firm in 2008 and after a series of acquisitions reframed itself as a record label. “If you look at how BMG started, it initially looked like it was just cobbling together pieces. But what they were really doing was buying infrastructure, catalog, revenue streams, but it was also people. It was a little bit of acquihires as well, and it took time to pull all those pieces together,” they said. “There is some puzzle they are putting together, and we’re just seeing one piece of it right now.”
When we consider how tech companies relate to artists, Epic’s acquisition makes even more sense. Many tech companies — including all the DSPs, streamers like Twitch and gaming companies like Epic and Activision — have all prioritized improving their relationships with artists, as music becomes an even bigger part of their strategies. Acquiring Bandcamp — a service beloved by artists across the world thanks to a revenue model that the company says nets artists an average of 82% of every sale — immediately makes Epic Games the first name out of a manager’s mouth when an artist says they want to get involved in gaming. Following through on its commitment to be a good steward of the Bandcamp brand will help keep it there.
One of the biggest hurdles for tech companies trying to ingratiate themselves with musicians is proving that they truly care about the art, outside of their contractually obligated duty to host a show or livestream a concert and impact their bottom line. But when a $30 billion company acquires something as essential to independent music as Bandcamp with plans to expand the artist-friendly work it has been doing for years, a signal is sent to artists — whether it’s true or not — that the company isn’t solely doing it to increase its profit margins.