Subvert, the would-be “Mondragon of Music”

I’m a long-time listener to new music, have several years of experience in the open source trenches (mainly on the policy and governance side), and have an interest in new organization forms and business models. Thus I couldn’t help but be interested when I learned of Subvert, a new organization that’s seeking to create a Bandcamp-like service organized as a cooperative venture. It’s a venture you can join as a regular supporter (not just as a musician or label), and I did exactly that, contributing $100 to become supporter #1,000.

Subvert was born out of immediate frustration with Bandcamp’s journey from indie darling to corporate concern, but also out of a long-term vision of how the structure of the music business could change:

Imagine a music marketplace where the community owns the code, controls the decisions, and shares in its success.

Subvert is a Bandcamp successor that is collectively owned, stewarded, and controlled by its community, with 100% of its founding ownership reserved for its artists, community, and workers. We’re building a platform that has artists’ interests, collective ownership, and democratic governance hardwired in its very DNA.¹

In pursuit of that goal the Subvert organizers have produced a 134-page document that lays out a business and governance model for Subvert.². The core idea is to create a two-part organization: a cooperative entity (jointly owned by workers, artists, labels, and supporters) to develop and operate the service and a cooperative-owned corporation to own the intangible properties (trademarks, source code and other copyrights, etc.) and attract investors.³

It’s clear that a lot of thought went into this plan, and it’s well worth reading in full. For those with less time or interest there’s also a general information and FAQ page that hits the high points. I’m not going to rehash those documents, but I did want to add some comments of my own.

First, the Subvert proposal and the broader vision behind it share an unspoken assumption that capitalism in some form or other is here to stay—that it’s as nonsensical to speak of “late capitalism” as it is to speak of “late agriculture.” The task is rather to try to find new ways of organizing businesses that mitigate the worst aspects of present-day capitalism. Doing so requires “applying . . . audacious thinking to the systems at the foundation of our economy” and fighting against “hardened cynicism, a belief that meaningful systemic change is unattainable or that individual interests are irreconcilable with beneficial collective outcomes.”⁴

Why would creating a “collectively owned Bandcamp successor” be a good first step in doing this? As the plan outlines, Bandcamp has a proven business model, a model that should be replicable as the basis for a financially-sustainable cooperative. Bandcamp and similar businesses are also in a favorable spot for “subverting” the existing corporate paradigm: they are not highly capital-intensive or technologically complex, and they have relatively weak network effects.⁵ (For example, since Bandcamp sells music in DRM-free formats, people can easily switch to buying music from another service.)

In the longer term (the next 50 years) Subvert seeks to replicate the success of the Mondragon network of cooperative ventures in Spain.⁶ Just as the Mondragon network started out as a single employee-owned business and later expanded into other ventures, so Subvert could serve as the “pioneer species” for a new ecosystem of cooperatives supporting musicians and the music industry.⁷

The Subvert plan takes note of many of the ills of the present-day music business and capitalism in general, including economic inequality resulting from traditional corporate models: “Ownership confers wealth, and the concentration of ownership creates wealth inequality.”⁸ But one factor it does not mention, and which the plan could help mitigate, is inequality among artists themselves. If the experience of artists on Subvert is anything like that of artists on Patreon, artists’ earnings from the platform will be extremely skewed, with the top artists making multiple orders of magnitude as much as less popular ones.⁹ This skewed distribution is likely something Subvert has no influence over, emerging naturally from the fact that the popularity of an artist is due to the multiplicative interaction of several relatively independent factors.¹⁰

However, the proposed structure of Subvert could help ensure that the most popular artists—those who therefore generate the most revenue for Subvert—do not exercise undue influence over the platform: The “one person, one vote” scheme for electing the Board of Directors and making strategic decisions gives less popular artists more influence, since they will form a larger proportion of Subvert’s user base. Other channels for providing feedback to the Subvert board and management also give less popular artists an opportunity to “punch above their weight” by making compelling arguments in favor of their positions and recruiting others in the Subvert community to support them,

Finally, the Platform Shares scheme could be used to compensate less popular artists somewhat more compared to the most popular ones, since there is no inherent reason why Platform Shares for artists need to be granted in strict proportion to their sales. In effect, Platform Shares could be used as a form of redistribution from the most popular artists to less popular artists, helping to build loyalty to the Subvert platform among the mass of less popular artists and strengthening their position as full members of the Subvert community.

In this and other ways Subvert has great potential to spark a change in the music business, and possibly more changes beyond it. It has a well-thought-out plan, and seems to be making a good start on attracting support. If you’re a musician or other artist, you should definitely check it out. If you’re not, but can afford a Subvert membership, I strongly recommend you consider joining as a supporter.