Helping Indie Musicians Market Their Tunes

Startups step in to promote and sell songs as the giants disappear

Amanda Palmer: "Major labels as we knew them aren't necessary" Kyle Johnson for Bloomberg Businessweek

By John Tozzi, Nick Leiber and Siobhan Crise

When the first iPods hit store shelves a decade ago, the music industry was dominated by five giant record labels. Most musicians who didn’t have a deal with one of them were doomed to obscurity and day jobs. Apple has since gone on to sell 320 million of the music players, and the once-dominant labels and retailers have been upended by the shift to digital. EMI Group, one of the four remaining big record companies, is being sold off in pieces. “Major labels as we knew them aren’t necessary, the same way the cart and horse became relatively unnecessary but people still need to get around,” says Amanda Palmer of the punk-cabaret duo The Dresden Dolls.

Scores of smaller companies have sprung up to help enterprising artists produce and distribute their tunes. Although nobody has reached Lady Gaga-level stardom without big-label backing, plenty of musicians succeed on a smaller scale on their own. “There was a set way that you got big as an artist or a band or got noticed back in the day,” says Maika Maile, the 22-year-old lead singer of There For Tomorrow. The Orlando pop-punk act has used a YouTube series to give fans a look into band members’ lives. “That old model pertained for decades,” Maile says. “For the first time in a long time, it doesn’t.”

In some ways the music business has never been more concentrated; last year Apple controlled two-thirds of digital music sales. Yet it’s easy to build an online music store, and more than 400 companies have sprung up to distribute songs and help artists get them into iTunes, Amazon, and other big retailers. More established players such as TuneCore, ReverbNation, and CD Baby offer music from thousands of independent acts, while smaller companies serve almost every conceivable niche market. Jamaica’s Reggaeinc is home to the island beat, music fans in Finland have Meteli.net, and My Clubbing Store is calling itself a French dance music hub.

Among the fastest growing of the new online stores is Bandcamp. Hundreds of thousands of artists showcase their songs on the site, and another 25,000 join each month, co-founder Ethan Diamond says. A veteran entrepreneur who sold his last company to Yahoo!, Diamond started Bandcamp in 2008 with a former colleague, Shawn Grunberger. Artists can plug Bandcamp’s player into their websites to stream albums and sell or give away downloads. Some offer a free song in exchange for signing up for a mailing list.

Palmer used Bandcamp to release a set of Radiohead covers played on the ukulele and brought in $15,000 in minutes, she says. Singer Sufjan Stevens’s sales on Bandcamp put him on Billboard’s chart of top-selling albums last year. Artists have sold more than $7.3 million on Bandcamp in the past 12 months, Diamond says, with the company taking 10 percent to 15 percent. “I wanted the entire focus of this to be on helping artists be financially successful,” he says.

The 12-employee startup is competing to inherit Myspace’s mantle as the go-to site for artists aiming to get music directly to fans. Myspace, once home to millions of acts, has seen its audience decamp en masse for Facebook, leaving “a huge vacuum,” says Aram Sinnreich, founder of media consultancy Radar Research. “All those bands needed someplace to go.” Still, he says, Bandcamp may have to find new ways to make money besides taking a cut of download sales as streaming services such as Spotify offer access to millions of songs for free or a small monthly fee. “The decade of download-driven business is coming to an end,” Sinnreich says.