Comments on: eMusic’s New Pricing http://www.avantmusicnews.com/2009/06/02/emusics-new-pricing/ A source for news on music that is challenging, interesting, different, progressive, introspective, or just plain weird Tue, 01 Jun 2010 16:08:29 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Mike http://www.avantmusicnews.com/2009/06/02/emusics-new-pricing/comment-page-1/#comment-69875 Mike Tue, 02 Jun 2009 15:23:56 +0000 http://www.avantmusicnews.com/?p=13054#comment-69875 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. 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.

]]> By: Frank Hecker http://www.avantmusicnews.com/2009/06/02/emusics-new-pricing/comment-page-1/#comment-69874 Frank Hecker Tue, 02 Jun 2009 15:03:28 +0000 http://www.avantmusicnews.com/?p=13054#comment-69874 "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. “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.

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