Free Music At eMusic. Who Really Pays?

eMUSIC SERIES PART 5 – Free song giveaways have long been used to attract many to eMusic’s 300,000 subscribers. 

A standard eMusic promotion offers 25 tracks free for just trying the service.  Don’t continue the subscription past the unpaid trial and the 25 tracks are still yours to keep free.  Get friends to sign up and eMusic will give you 50 free tracks.  Other promotions have given away as many as 75 free downloads.

"Like all digital music services (Napster, Rhapsody, etc.), eMusic provides a free trial period during which users get to try our service as an incentive to sign up," states eMusic VP of Corporate
Communications Cathy Halgas Nevins. "We have agreements with all our labels for the use of free goods to encourage users to buy more music. This is a common practice in both the physical and digital music industries."

But how eMusic accounts for these free tracks and who is responsible for paying artist royalties and the
9.1 cents statuatory rate due songwriters remains unclear.

Free goods were standard practice at old school music retail.  But we could not find current promotions at Napster or Rhapsody that gave consumers unrestricted choice of permanent free downloads from either services’ vast catalogs as eMusic does in its offering.  Other download giveaways involve short term free subscriptions with DRM that renders any downloads unplayable after expiration or
select downloads specifically chosen with label consent to support a new release or promotion.

Sources tell Hypebot that eMusic also stopped accounting for these "free goods" sometime last year and our review of eMusic statements showed no mention of free songs giveaways. So how could a label pay the artist or songwriter even if they wanted to or were contractually obligated?

eMusic has according to sources contractually indemnified some labels and content providers in case rights holders, The Harry Fox Agency or others come demanding payment for the unaccounted for giveaways. But other label contracts apparently do not to carry that protection.

BE SURE TO READ –

• PART 1 – eMusic Has Become An Indie Cornerstone
• PART 2 – eMusic Under Attack
• PART 3 – Hypebot Gets A Letter From eMusic
• PART 4 – Does eMusic’s Math Work For The Labels?
   

Next Week: eMusic and Industry Reaction