Hypebot Gets A Letter From eMusic

As I have researched Hypebot’s current eMusic series, I’ve contacted many sources. As many writers do – even a part-time blogger/industry commentator – I’ve shared small advance portions of the piece with others for comment and clarification.  Among those sources has been eMusic’s VP of Corporate Communications Cathy Halgas Nevins who has been quoted in the first two parts of the series.

One of the subjects discussed with Halgas Nevins and others was how some labels are leaving eMusic over the service’s payment structure. I also described my understanding of how eMusic calculates payments based on published reports, my own interviews and a look at  eMusic’s royalty statements. 

The company’s stance could generally have been summed up in this from Halgas Nevins on May 9th. "…I’d really like to help you, but just like any retailer, our agreements with our suppliers – record labels — are confidential."

On the surface, this seems an understandable response from a corporation, but it is not in my opinion in keeping with the current industry reality.  Some labels have their own specific deals with each service, but the general
terms of what each service pays out (for example 60-65 cents per track at iTunes) is common knowledge. After all, every download service issues thousands of quarterly statements to thousands of labels representing tens of thousands of artists and writers of more than two million songs.  Hardly a small enough group to keep anything secret.

Then on Friday this email arrived re-printed in its entirety:

Hi Bruce:

How is the 3rd part of the story going?  For the record, I have to firmly reiterate that your math and assumptions are completely wrong.  This is not how we calculate our label payments.  If you publish this, it will not force us into making these confidential terms public, and we would aggressively make the public aware that the story is not reported based on facts. 

I’m happy to help you out with information whenever I can, but I just wanted to make sure we’re on the record on this.

Thanks, Cathy

(I added the bold. The underline came from Halgas Nevins.)

My public response:

Hi eMusic:

How is business going?  For the record,all I’m doing is seeking the truth. If I’m really wrong please correct me. Don’t threaten me. 

I’m happy to help you out by printing your press releases whenever I can, but I just wanted to make sure we’re on the record on this. 

Thanks, Bruce

PS: Believe it or not I really like your service. I just also believe in transparency.

Today I’ll be circulating an updated version of my understanding of eMusic’s payouts to a variety of sources seeking comment and clarification.  (If any Hypebot readers with direct knowledge of eMusic would like to comment on or off the record please email me privately here.) Public comments and opinions are also always welcome below.

Tomorrow, I’ll print what I’ve learned.

Read Hypebot’s exclusive eMusic series here: Part 1, Part 2