Some Indies Planning Pullout from eMusic, Citing Low Payouts and Subscriber Number Padding: Report
eMusic, the online music service which sell DRM-free MP3 and focuses on indie music, may be heading into trouble, according to this Billlboard story. It says that at least six eMusic partners—three of whom were listed among eMusic’s top 60 labels this week—plan to either to pull their catalog from the service entirely or to limit content to back-catalog tracks when their current licensing deals expire.
The reason? These labels feel eMusic is trying to pad its subscriber base to make itself a more attractive acquisition target. Unless the service raises prices and, in turn, the compensation provided to labels, they intend to withdraw..some labels receive as little as 12 cents per song in profit, far less than the 60 cents to 65 cents per track received from iTunes, the story says…of course the price point is not 99 cents per song, but much lower. The service counts more than 13K indie labels as partners, and, at the moment, complaints are a small part…
eMusic CEO David Pakman last month said in a Forbes.com interview that the company is not for sale…“I can confirm there are no talks right now with any strategic buyer. The company’s not for sale.” Also, he e-mailed MP3.com on this Billboard story and said that his company found fault with the report and said the majority of the more than 13,000 indie labels working with eMusic are happy with its service.
Meanwhile, in another opinion column, also on Billboard, this is a good argument for eMusic: “Sure they make less per track than iTunes, but they’re making more in aggregate on eMusic than they will on iTunes. There’s some sort of mass hallucination among the music industry that the current prices being paid to license music—be it for a la carte, subscription or streaming radio services—represent a “fair market value” that the industry itself arbitrarily set based on what they wanted to be paid. I’ve said it before and I’ll say it again, fair market value is based on what consumers are willing to pay, not way the sellers want to charge.”
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Comments (2)
May 8, 2007 11:43 AM
I am an avid fan of eMusic and their excellent service, like many of us in the indie music community, I suggest you read what their CEO has posted in response to this, a great read - go check it out now on the eMusic blog at:
http://17dots.com/2007/05/07/its-a-brave-new-world-out-there/
Jul 20, 2007 7:52 AM
Don’t support companies like eMusic. Read the small print! If you do not use your downloads you pay for each month , you loose them. I lost 200 downloads before I happened to discover this. eMusic told me it is like a “gym membership” (where you pay each month regardless of the total amount of usage), the difference being that it is clearly understood at any gym. Unless you can spend endless hours every month downloading music , my advice is to check other companies.