Epic Games Makes 'Unusual' Bandcamp Acquisition, Sparking Fear Among Artists

The music and gaming worlds got a shock Wednesday with the news that Epic Games, the video game developer behind free-to-play hits such as Fortnite and Rocket League, planned to acquire Bandcamp, a modestly-sized music platform with a reputation for putting artists first.

While there has been no shortage of acquisition in the rapidly-consolidating video game industry, this particular combination of companies caught some industry-watchers by surprise.  "It's definitely not the usual acquisition," said Michael Metzger, a partner at Drake Star, an investment banking firm with a focus on media, gaming, and financial technology 

Independent artists were also caught off-guard and the deal quickly sparked fears that it could ruin what many saw as their last best hope of getting paid online for their work. 

"A lot of fans and artists saw Bandcamp as a really appealing alternative to Spotify," said Michael Sugarman, director of the Initiative for Digital Public Infrastructure at the University of Massachusetts, Amherst, "Spotify is a bad model for musicians, and I think that people are deeply aware of the fact that there is a risk that Bandcamp could change for the worse."

Bandcamp takes just a 15 percent cut of song purchases, while Spotify uses a complicated royalty rate based on streaming listens that is rarely lucrative for lesser-known artists. 

In many ways, the differences between the companies' payment systems reflect two very different visions for the internet: a top-down, algorithmic-led platform with deep pockets and connections across the music industry versus a more decentralized, user-based experience. That, at least, is how many independent musicians see it, and while Epic Games is no Spotify, it's still a large gaming company with billions in venture capital backing it up. 

"I legit don't know what to make of the Epic buying Bandcamp deal, but any corporation getting involved in an independent market is never a good sign," tweeted Lena Raine, a composer and game creator who uses Bandcamp to sell her music. "I'll stay cautious and hope that bandcamp remains the only good marketplace out there with artists' best intentions in mind."

Sugarman pointed out that fears of the deal probably weren't helped by the fact that Epic Games is partly owned by Chinese gaming conglomerate Tencent, which also invests in Spotify. 

Both Epic and Bandcamp seemed to anticipate these concerns and said in their respective announcements that they have no intention of changing the platform's model. 

"Bandcamp will keep operating as a standalone marketplace and music community, and I will continue to lead our team," said Bandcamp CEO Ethan Diamond. "The products and services you depend on aren't going anywhere." 

He added that Bandcamp will keep its "artists-first revenue model," where artists net an average of 82 percent of every sale and that users will continue to have control over how they offer their music. 

Epic Games, meanwhile, said in a press release that: "Fair and open platforms are critical to the future of the creator economy. Epic and Bandcamp share a mission of building the most artist friendly platform that enables creators to keep the majority of their hard-earned money."

Metzger of Drake Star said the fear of changes was overblown, based on Epic's track record. 

"What I know about [Epic CEO Tim Sweeny], I just can't imagine that he would screw around with that model and the artists at all," he said. "I've dealt with Epic a lot over the years, and I think they'll keep it as is, and if anything enhance the tools for artists to promote their music."

Indeed, back in 2016, Sweeny told PC Gamer that the future of gaming was "user driven." 

"If we think about what gaming might be in 10 years, we're not just going to be playing a bunch of prebuilt single-player games that companies had thousands of people construct on a billion dollar budget," he said. "It's going to be user driven. Users are going to build stuff, they're going to build seamless environments for social interaction, for gameplay."

But a more user-driven model doesn't necessarily mean users always get the profits. Fortnite, for instance, allows players to create all kinds of user-generated content, while at the same time making a good chunk of its revenue off of players who make in-game purchases. 

Sugarman said that big companies will likely get more interested in more organic, user-based communities out of a desire to tap into new sources of content and customers. 

"There is clearly a lot of value where artists can basically communicate directly with fans, and fans can pay artists for their music," he said. "I think what it comes down to is Bandcamp offers a model that decenters the platform in a lot of ways."

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Epic Games Makes 'Unusual' Bandcamp Acquisition, Sparking Fear Among Artists

Independent artists were caught off-guard and the Epic acquisition of Bandcamp quickly sparked fears it could ruin what many saw as their last best hope of getting paid online for their work.

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