Estimated reading time: 7 minutes
A lot happened in the music industry in 2023 that impacted everybody — independent musicians and major labels, streaming and physical LPs, and everything in between.
I’ve got five music industry stories that I’ve identified as things to watch. A lot of it is good for you, the intrepid indie artist. I think the future looks bright for music this year.
In March of 2022, in what was a bit of a head-scratcher deal for me at the time, Bandcamp announced it was purchased by game maker Epic Games — creator of Fortnite and Battle Royale, among others. What was the fit? I couldn’t figure it out, and I guess neither could Epic Games.
In March of 2023, much of the Bandcamp staff unionized to, in their words, “ensure they were treated with the same values as Bandcamp treats its artist.” That was also a strange one for me. Bandcamp’s employees are designers, software engineers and developers, customer service, and creative staff working for a music tech company. Hardly the kind of folks that you usually see unionized.
Then, this past September, we heard Bandcamp was being sold by Epic Games to SongTradr, an online music licensing platform. Clearly, Epic did not know what to do with Bandcamp and wanted to unload it. But here’s the kicker: as part of the sale, it was announced that about half the Bandcamp staff would be laid off, including all the union organizers and many of the unionized positions.
What does this mean for Bandcamp going forward? Well, it appears the company was not making money and the layoffs were necessary to get it to profitability. I feel for the laid-off Bandcampers, and I also feel for Bandcamp’s remaining staff, who were whipsawed with two company sales in 18 months and who lost half their colleagues in the process.
But, encouragingly for indie artists and fans, Bandcamp continues to publish its Bandcamp Daily and they just unveiled a cool new “discover” feature to help music fans find new music in genres and formats they love on the platform. So, let’s hope Bandcamp remains the indie friendly music retail mainstay we’ve all known and loved.
If you performed live music at all, you probably know that when you sell merch at certain larger concert venues, the venue will take a cut of your merch sales, sometimes as much as 25 percent. In comes independent artist Jeff Rosenstock, who this year published a list of Live Nation and AEG venues with the exact percentage cut they take from his merch sales. This article got such traction, it eventually led to Ticketmaster and others to announce they were reducing and, in some cases, pausing completely the fees they take on merch sales, which is pretty cool.
I certainly hope this will continue, but it’s worth knowing that venue merch fees are almost always negotiable, and in many cases, you can actually negotiate them away.
The economic impact of live music
Here’s an interesting side note that’s not really relevant to indie music, but worth mentioning. 2023 saw two mega tours by two mega artists — Taylor Swift and Beyoncé — that actually impacted regional and sometimes national economies. These tours were so popular, each grossed a whopping billion dollars. The fans coming into to the cities and sometimes the countries where performances were held were spending so much money that they measurably drove economic growth. Pretty amazing and a real testament to the ongoing power of music.
Spotify seems to always be on the music industry stories to watch list these days. First off, Spotify laid off almost 25 percent of its staff over three rounds of layoffs in 2023. 600 in January, 200 more in June, and they recently announced 1,500 more.
Are things going badly with Spotify? Not exactly: They’re by far the largest streaming platform, with a 31 percent of global market share — more than twice that of Apple Music, in the number two spot, which has 15 percent. But, Spotify has never been profitable, and they have to get there to survive. As streaming subscriber growth levels off, the main ways to become profitable are to reduce costs or to raise prices, and since Spotify is hesitant to drive big price increases in a competitive streaming market, they are opting to shrink their staff.
Perhaps a bigger Spotify news item, for the indie artist, is the announcement of a number of new policies to combat fraud, including stiff penalties for distributors supplying fraudulent tracks, or driving fraudulent streams. The distributors hate this, because with a penalty of $10 per track, this could cost each of the major distributors millions of dollars per year. While those distributors can certainly crack down on fraudulent tracks, they can’t possibly know which of their legitimate artists might use a streaming farm to boost their stream count.
More disturbing for independent music artists, Spotify is going to “Artist-Centric pricing,” which sounds benevolent but actually means that they’ll stop paying sound recording royalties on tracks that have fewer than 1,000 streams a year and redirect those payments proportionately to all the other artists who have more than a thousand streams.
This Artist-Centric pricing, which is a pretty way to refer to what I call “stealing,” was pushed by the major labels and you get one guess who stands to benefit the most. While the redirected dollars for each individual track may not be big, this will impact close to two-thirds of all the tracks on Spotify, which will now not monetize at all, and the aggregate dollars will be big.
How big? Spotify expects to redirect $1 billion over five years, out of your pocket and into Universal, Warner, and Sony’s already much deeper pockets. Honestly, this just pisses me off.
CD Baby recently shut down its physical distribution center after 25 years of selling independent CDs and vinyl. I get it. Streaming is the name of the game now, that’s where the volume is, but I must say, I was sad to hear it. Physical media is critical for artists to be able to make any money from their music, because streaming pays so little, and CD Baby was pretty much the only outlet that would distribute an indie artist’s CD to retail stores.
What is an artist to do now to sell CDs? You can sell CDs directly to your fans off your website and Bandcamp page, but unfortunately CD distribution to other retail outlets is no longer a viable option for most artists, which is a bummer. That said, we know that most indie artist CDs and vinyl are sold at shows and direct to fans online, and those opportunities really haven’t changed.
For the past decade, production demand for vinyl records greatly outstripped record pressing capacity in the US, which, just a year ago, led to sky-high prices and turn times as long as 26 weeks. However, in the past two years, significant capacity was added to the vinyl industry.
There are now 40 record pressing plants in the US! With all that added capacity, turn times have come way down, to below eight weeks, and prices have come down too. We at Disc Makers dropped our vinyl record prices significantly last year.
Thanks to you, our vinyl program was perhaps our biggest success as a company in 2023, with vinyl orders quadrupling the second half of the year. I’m calling that a positive music industry story from 2023. Whether it’s vinyl or CDs (or both!), when you need physical product, we’re here for you!
Sell your CDs online: Stake a tent at Bandcamp
The movement to end the merch fees charged by venues is growing
Indie Musicians Need to Fight Spotify’s Royalty Theft
Disc Makers is Still Making CDs (and lots of ‘em)
Where Can You Sell CDs?