New Music Business Briefing: EU Clears Universal BMG, Royalty Share Gets Idea, Sprint Streams Pandora & More
UPDATED: Former CEO May Offer Higher Bid For EMI.

eMusic Responds

  • 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?
  • PART 5 - Free Music At eMusic.  Who Really Pays?
  • NEXT - INDUSTRY REACTION

PART 6 - During the preparation for our ongoing series on eMusic we contacted the company for comment and clarification.  In the interest of balance today we'll print some of the responses from Emusic eMusic VP of Corporate Communications Kathy Halgas Nevins.

The portion of the series that received the most attention "Does eMusic's Math Work For Labels" calculated net payments to label which some feels does not leave enough net revenue to properly compensate artists and songwriters. Halgas Nevins responded:  "I can’t comment on this calculation, however, our price per download has grown considerably over the past three years and is now the highest it’s ever been.  (Per track payments from wholesale models such as iTunes don't grow.)

Emusic25free "... eMusic’s subscription plans generate a large volume of sales for our labels. While the average iTunes user buys 7 – 10 songs in one year, the average eMusic subscriber buys 20 songs in one month.  That’s nearly 35 times more music annually than iTunes sells on a per-customer basis.  Another way to think about this trade-off is “wallet share.”  eMusic receives on average more than $13 per subscriber every month.  Compare this with the $7 per year that iTunes receives.  eMusic subscribers commit themselves to spending, on average, $160 per year on independent music.  In other words, we get a larger chunk, or percentage, of a subscriber’s wallet or spending than any other digital download service." (more after the jump)

 

"Again, a big part of that increased volume is a lot of incremental sales of new artists and deep catalogue.  Our customers rely on us to help them find this material and our pricing allows them to take chances on artists they’ve never heard before.  Most labels will agree that we sell deeper parts of their catalogue better than any other digital music service. 

On the exodus of Victory and some other key labels over per track payouts:
"We work closely with all of our labels and are interested in their point of view on how we can better service them.  Our label relations staff is one of the most responsive in the business.  However, labels make decisions every day on how to sell their artists’ music and what is best for their business, and the vast majority of our 13,000 labels are pleased with their business on eMusic. 

We have only lost about 5 labels in the last three years, and of course we were sorry to see Victory go.  We’ll continue to listen to our labels and try to sell as much of their music as we can.  As it stands now, we are often the number #1 or #2 check from all digital retailers to our labels and overwhelmingly they are pleased that we have cultivated a viable digital music stand-alone business that is focused on selling something other than pop and rap.

eMusic  also shared the results of an internal customer survey:

  • 84% say they discover music they would not have found with any other service
  • 91% say the low cost encourages them to try music they had not heard of previously
  • 74% say they are more likely to download complete albums on eMusic than on iTunes
  • 78% say they typically add more than 20 songs to their collection EACH MONTH on average than they did before they signed up

We'd seen almost no new activity on eMusic Live for weeks but the company insists that their still behind it: "eMusic is committed to delivering live music to our customers from many different sources. We do offer live shows from several specific clubs under the “eMusic Live” banner, and we have found many more sources of licensable live material and have been putting more resources into cultivating those sources as well."

What's next for eMusic?  "eMusic has been, thankfully for those of us in the non-mainstream music industry, a great success to date with annual growth of over 100%.  There are few retailers in the world who focus on selling longer-tail music.  And there are very few successful stand-alone digital music retailers left in the market."

"To continue our growth, we will continue to seek out and license music from the most remote regions of the world and bring even more diversity to the sales selection of our customers.  We are looking at additional markets and product lines – there are other areas, such as video, that are interesting to us.  But our overall mission remains building the best digital entertainment company for customers who are interested in material that’s outside the commercial mainstream."

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