Monday, May 07, 2007

eMusic threatened by pullout

Indie labels - many of them, anyway - are just like big labels, run to the same demands of vanity, short-sightedness and greed that have made EMI and Sony-BMG what they are today. It's just they usually have slightly smaller headquarters.

Still, they can grumble just as loudly as a major if they feel they've been done wrong, and now several indies are threatening to yank their collections from eMusic. They're unhappy at the new "connoisseur" level membership which, they claim, can see them earn as little as twelve cents a download; they feel the company is trying to boost the number of subscribers its got at their expense, with an eye to selling that list of members on to a new owner.

Only half a dozen of the 13,000 labels are threatening to quit - although even their exit could knock confidence in the service - but even supporters are muttering darkly:

Rian Murphy, head of digital sales for Chicago-based Drag City, [...] says he has no plans to leave the service. "But from the point of view of the label, the profit margin is greatly constricted, and it's a concern to anyone selling records. They would be better off being more equitable, or they will probably lose some labels. Everyone has to live."

eMusic's position is that, while it pays labels about a fifth as much as iTunes per song, it sells many more tracks, which ultimately means more cash for everyone:
"There's no question that eMusic pays less on a per-track basis than other a la carte digital services," [CEO David] Pakman says. But "it's not clear that 99 cents a song is the right price ... Music is an elastic good. If you lower the price, you'll sell more, and if you raise the price, you'll sell less."

Although even that isn't strictly true, either.


1 comment:

jon goldberg said...

I am an avid fan of eMusic and their excellent service, you should 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/

Post a Comment

As a general rule, posts will only be deleted if they reek of spam.