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 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.)
"… 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."
I have to say, guys, that I have less of a problem with eMusic than I do with Napster and Rhapsody … and their ilk. I’m a CDBaby-distributed artist and we do OK out of eMusic (though they pale next to iTunes). But 0.009c per listen? That’s just pathetic – doesn’t even come close to the benefit we get from lower sales in other, higher-priced, stores.
At least eMusic is trying something different and is on the up …
I am a fan of eMusic and their lower cost DRM Free indie alternative. In fact excuse my rambling early morning post but I’ve been trolling their site all night digging in the digital crates.
I am not an artist, and can forgive them many of their shortcomings based on the value of what i receive each month. Last night I scored some amazing early Roger Troutman tracks, as well as music by Bad Brains, Vince Neil, James Chance, The Avett Brothers, Willie Nelson, Angelique Kidjo w/ Joss stone, Blondie, and Howard Tate. All for less than I would’ve spent on a just a few downloads with the backdated options guy in the turtleneck in Cupertino.
Most people in music that I know have never received much in the way of royalties from their record companies regardless of business models, and holding eMusic accountable for not generating tons of dough for indie artists hungry for exposure is a bit hypocritical. Hell peter Noone of Herman’s Hermits just wrote into Bob Lefsetz last week that he’d never seen a label royalty statement in decades making music.
If anything eMusic allows those in control of the masters to track the downloads, make revenue off out of print tracks, and potentially expose millions to tunes that radio and television are never going to.
Basically, I doubt anybody but the Eagles & other superstar acts are making much off their individual songs on sale at Wal Mart, if they are even in Wal Mart.
Personally, I feel like a download is definitely worth less than a dollar, and eMusic’s pricing levels agreee with me. Downloads elsewhere priced $1 or more per song, seem silly to me, since I get no packaging, and many albums I want are often to be had used anyway for as low as $2 – and often new in the $10 range at most stores or online sites if I want them.
I am not going to pay over $10 to download something that could be had in hard copy form for less, or perhaps even accidentally deleted. eMusic kindly offers me the option of re-downloading anything I’ve previously purchased if I do delete…now that’s a good value. At least from a consumer standpoint.
I have to agree with those surveyed that were it not for eMusic, I’d less likely delve into deep catalog or foreign releases, and probably still be downloading the majority of my new music “illicitly” via p2p or what have you.
As for the royalties being low…
Artists are not required to put songs on Emusic, and can remain I-Tunes only if they so choose to make that extra few cents a track.
My only hope for eMusic would be that they are able to provide even better & deeper catalog. When Rykodisc was purchased last year by Warners, it left & hurt the perception of quality in eMusic’s selection big time. eMusic could use some major label “special products” division type stuff, if not the major current “pop” releases.
I just wish EMI would be willing to give eMusic a shot, or at least set up a similar DRM Free environment with flexible pricing considering the vast amount of music that will likely never ever see the light of day due to high cost of reissuing it on CDs.
You make some great points from an consumer point of view – a P.O.V that is too often forgotten. But I still worry that the pennies left over after fees and songwriter royalties is not enough to pay acts properly or to run a label.
I have been a subscriber of Emusic for probably 5 years now. Recently I recieved an email with an offer to upgrade to a “Connoisseur Account”. I took advantage of the offer. Each month I spend $74.99 for 300 downloads. I would guess that I’m an above average user of the service. I think for someone to commit to a $75 a month subscription plan for music at a time when gas is over $3 a gallon says alot about my intentions to support the artists. I guess I do have a little bit of disposable income and for that I guess I am lucky. Music means alot to me and always has and I’d much rather support independent artists then mainstream artists. I’ve been reading up a little bit on the payout from Emusic and it started to make me question whether as a consumer I was doing the right thing by supporting the artists with an account on Emusic. It’s unfortunate that I’m not able to really get a good idea of how the money I pay Emusic for the artists music translates into monetary compensation for the artists themselves. I’d feel much better knowing that my account helps them and so this whole issue has raised a moral dilemna for me. I have to believe that an account on Emusic is better then me stealing it on a file sharing program, I don’t think anyone could argue with that. One things never changed and that is the fact that I’ve always used my purchasing power to support the artists I love. Currently Emusic is just one of the many ways I get music. I buy alot directly from the artists, buy cd’s and vinyl from distros and labels, Ebay, Gemm, Musicstack, Amazon, etc… I made a decision personally to go totally digital about 3 years ago. There were many reasons, but a major one was portability. I have alot of vinyl and you certainly can’t listen to vinyl in your car. I have a 1 Terabyte Lacie Harddrive about half full right now. That’s between my entire cd collection I ripped to MP3 and then sold, the vinyl I’m slowly ripping now, and all of the digital downloads I’ve purchased over the last 5 or so years. In my opinion, Emusic could improve in some areas and I have a few small gripes but overall I’m completely satisfied by their service and have been since the first time I heard about Emusic. I feel a little bit uneasy with the fact that I don’t know how the money I’m spending on the service is affecting the artists I love though. The minute I see Dischord Records pull out, I’ll probably be gone too. I use them as a gauge because they’re probably the label I respect the most above all others. They’ve been hanging in there so far. I’m thinking of writing a few of the labels I love and asking what is the impact of my buying music through Emusic on them. Is it hurting, helping or just staying static? I’ve tried Itunes and sometimes Itunes is ok, but for the most part, Itunes is the one Apple product I’m just not completely head over heels in love with. I’m huge on Apple products and swear by Apple, so that says alot. Sometimes I’ll use Audiolunchbox which is ok I guess. At the end of the day, while not perfect, Emusic has the widest range of stuff I’m looking for and like. I’m a loyal consumer but when it comes to this issue, I know in my mind if I find that the artists I’m trying to support aren’t benefiting from my consumerism, I’ll have a moral obligation to pull out. I’ve never been on the artist side of the coin and sometimes I wish I could be so I could see what’s happening to them in terms of this whole digital thing. I do wonder if other consumers have the same take on the issue that I do. I’m sure lowest cost is probably most consumers deciding factor. On a related note, I started one of those blog thingies (http://mogwaione.blogspot.com/), because I just thought it would be kinda fun to share some memories of bands that are important to me. I have direct links to avenues where the music can be purchased any time they are available. Since I’m linking to both Emusic and Itunes, it makes me that much more curious exactly how this affects the artists I love. Anyway, I just thought I’d add my two cents to this debate.