Bandcamp, one of the best online distribution tools for musicians, has recently announced they plan on charging 15% of all sales from artists.
I wrote a pretty lengthy comment on their blog, but it never got past comment moderation for whatever reason. Reposting here.
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Dear Bandcamp, my thoughts on your 15% cut:
1) TRANSPARENCY: Please detail exactly how you came up with this percentage, with a breakdown of your costs. Build trust & respect through transparency. People don't mind paying for things that have value, they just don't like feeling bamboozled.
2) CONSISTENCY: You are saying that above a certain total sales amount, you will drop your percentage cut from 15% to 10%. Confusing. Figure out how much you need to charge per sale and just stick to it...or detail how sales volume affects your bottom line and thus your percentage. See #1.
3) DON'T TAKE CUT OF PHYSICAL SALES: You allow artists to sell their own physical goods through your site. But unless you are involved in manufacturing or shipping these items, what costs are you incurring that entitle you to a 15% cut? See #1.
4) KEEP FREE, FREE: Below a certain sales threshold, keep the service free and uncrippled for a trial period. For instance, no percentage taken from first 25 transactions. After this initial trial period, it proves the service works and musicians will most likely stick with it.
5) DON'T TAKE A SALES CUT, BE AN ESSENTIAL SERVICE PROVIDER: By charging a percentage of sales, it makes you look like you are taking money away from artist sales. That's not very attractive to independent musicians. Leave artist's income untouched and instead charge them a monthly fee for your service based on bandwidth and traffic to their page, much like a cloud hosting provider. This creates a clear distinction of cost of services provided by Bandcamp and income generated by having the Bandcamp page. With good tracking tools, it will be easy for an artist to adjust the price that they charge for digital transactions to compensate for the cost of bandwidth, and they won't mind paying it because they see it as an essential cost to do business.
I love Bandcamp - but I hope they think a bit more about this business model, because it feels rushed and a step in the wrong direction. I know charging sales commission is a great way to make a lot of money, but it also is very reminiscent of record label contracts. In my humble opinion Bandcamp would do better to position themselves as a service provider and give musicians 100% of the sales. That way artists see Bandcamp as a service provider that is worth paying for instead of a middleman they need to get around.
