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Why was Bandcamp Sold to Epic Games?

Why did Bandcamp allow one of the biggest gaming companies in the world to acquire it? We think it’s rather obvious.

Epic Games Acquires Bandcamp

The announcement last week came as a big shock to many; Bandcamp was sold to Epic Games. Many had believed that with Ethan Diamond at the helm, Bandcamp would likely remain independent forever. So why didn’t it? Neither company expounded on the reasons for the purchase which hasn’t helped silence the rumor mill, but we can take a guess based on some of the history.

Diamond has turned down some substantial offers in the past so we have to suspect the offer from Epic was likely to have been so ridiculously large that it forced Diamond to take notice. But noticing an offer isn’t likely enough to have gotten him to jump ship.  He’s passed on quick money situations before when he didn’t think it was the best thing for the artists, so I have to think Epic came with more than just money in hand.    

Bandcamp has enjoyed a huge surge during the pandemic as artists who lost tour revenue looked to sites like Bandcamp for immediate ways to generate income. Most artists don’t earn enough from streaming to make a living so it’s essential for them to sell a lot of merchandise or physical media like records and cassettes.

If websites don’t have the backend infrastructure in place to deal with significant upticks in traffic, there can be real issues when the world shuts down for a pandemic and millions of consumers suddenly arrive. The ability to properly scale up doesn’t happen overnight and it requires a plan and capital.

That is where Bandcamp finds itself. It has weathered the pandemic explosion and arguably done quite well but now it has all those Band-Aid solutions staring back at them and with no signs of the site slowing down they may know that the clock is ticking.

This technical deficit is something all companies deal with. Computer systems don’t age well and code is not elastic so regardless of how much headroom is designed into a system; it will eventually reach its limit. When those limits are reached, a complete rethinking of how the site works is often needed.   

Enter Epic Games.

Epic knows something about building massive online communities. Fortnite has an in-game economy with full e-commerce capabilities in addition to messaging services that allow members to directly interact. So while their products may be different, a lot of the tech that drives both companies is similar. Add to that the fact that Epic has been integrating concerts into Fortnite for some time now with Marshmello, Travis Scott, Ariana Grande, and J. Balvin and has experimented with other ways to integrate music and artists into their games.    

Epic has been one of the innovators in this and it wouldn’t be a surprise if they see a larger market for music in their products and the cross-marketing of music to gamers.

The most interesting aspect of this to watch will be the percentage of artist revenue; will it increase or decrease? Diamond has a rather good track record so far; 82% of revenue on Bandcamp has gone directly to artists and it would be a rather drastic change to suddenly do something that is detrimental to artists on the platform.

If Epic is successful at growing Bandcamp, artists might be willing to take a little less if the number of transactions grows and it will be fascinating to see if any really big names decide to make their music more accessible on the platform.

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