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eMusic’s New Pricing

Jun 2, 2009
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There been a minor brouhaha going on in the independent music community over the last two days.

eMusic is the second largest provider of legal Mp3 downloads (iTunes, of course being the first). eMusic has been a boon to fans of independent music, as they support a huge variety of styles, genres, and labels.

You can find most of the music discussed on this site at eMusic. Personally, I am an eMusic subscriber and purchase 200 downloads a month from them.

Sunday, eMusic announced that they would add major label content to their site. Not bad at all. Except that they are dramatically increasing prices on ALL downloads, not just the major label downloads.

The uproar is deafening. I’ve blogged about how I feel, as has Brandon Wu, and others. Check out eMusic’s official blog and the hundreds of negative comments that they have received.

Note that this money is not going (as far as we can tell) to the independent artists or labels. Instead is is either going to the major labels or to line eMusic’s pockets.

This is an opportunity for the independent music community to be heard. If you don’t agree with eMusic’s new plan, let them know loudly and clearly, either on their blog, their forums, or via other means.

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2 Comments

  1. Frank Hecker  •  Jun 2, 2009 @10:03 am

    “Note that this money is not going (as far as we can tell) to the independent artists or labels.” That’s not quite true, I believe. My understanding is that eMusic uses a revenue-sharing model in which a proportion of eMusic’s overall revenue (60%, if I recall correctly) is paid to labels, with each label receiving payments based on the fraction of total downloads corresponding to that label’s tracks.

    So if eMusic’s per-track prices go up, each label’s per-track payments go up as well. If the availability of major label content attracts more eMusic subscribers and the number of total downloads go up, then the total payments to indie labels could go up as well, as long as indie releases constitute a reasonable fraction of all downloads.

    Of course it may be that major label downloads will crowd out indie downloads, and the fraction of indie downloads will go down far enough that indie labels will make less money even though per-track payments are higher. This is a potential problem eMusic can address by continuing to actively promote indie releases alongside major label releases.

    I’d also add that in the past that some indie labels seem to have been focused on per-track payments instead of total payments, since they were concerned with being in a situation where they lost money on every track. The new higher per-track payments will directly address that concern.

  2. Mike  •  Jun 2, 2009 @10:23 am

    If eMusic’s cut is in fact as you say, that’s a different story. But until they disclose how their payment system works, the timing of the price increase is highly suspicious at worst, and poor marketing at best.

    Furthermore, I doubt that eMusic subs would complain much if it were clear that eMusic needed to pay more to indie labels in order to stay in business. At least, I wouldn’t mind a 20%-40% increase in fees, for such a purpose.

    The issue is that eMusic has more than doubled the monthly cost of downloads for quite a few people. That’s weak, and people have a right to be upset and take their business elsewhere.



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