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Is eMusic For Sale Just As Some Labels Grow Restless?

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This morning asked why are Vice Recordings (Bloc Party, The Stills, The Streets) tracks no longer on eMusic?  Are other labels here and in Europe unhappy with recent eMusic payouts?

Our sources now tells us that European digital distributor Vital was actually who pulled Vice’s content from eMusic Europe because of "royalty issues".  In the US  Atlantic helps fund Vice; so it may have been WMG who forced the eMusic take-down here.

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We’re also hearing persistent rumors that even as some labels are growing restless, eMusic is actively up for sale. Google and Amazon are most often mentioned as buyers. Some even claim a deal is close and attached a purchase price around $100 million to the rumor. I haven’t seen any of the private company’s numbers, but the figure seems high given the competition (including Amazon) almost ready to or strongly considering entering the mp3 marketplace.

We’re asking Vice, Vital, eMusic and others for comment and will publish any replies.

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4 Comments

  1. Ugh… Any talk of Emusic being bought makes me nervous. While there’s the possibility of it being positive, there’s also quite a few negatives that could result.
    Right now, the service is just about perfect for me (low cost, no DRM, plenty of music I like), so any new management could decide to mess around with it…

  2. I just checked and Vice Recordings is indeed gone in the US as well. No warning and the tracks I’ve downloaded are now unavailable for re-download upon catastrophic failure.
    This makes me nervous as much as the next subscriber. eMusic has a record of not warning it’s subscribers of upcoming changes. There is no solid News section, although an “unofficial” blog (17dots.com) has been launched by eMusic staffers, it still doesn’t give us industry-strength news.
    I fear for the future of music if eMusic is rolled over by a bigger player such as Google. There is no reason to start alienating the people who are dedicated and functional members at the heart of eMusic itself. We’re used to labels coming and going, but if there is a mass exodus, the future will feel the repercussions.

  3. Regarding valuation: Per David Pakman’s comments (in a recent article in which he also denied rumors of an impending sale), eMusic has an average revenue per customer of $14 per month ($168 per year) and a subscriber base of “well north of 250,000”. This translates into a revenue run rate of over $42 million, so a valuation of almost $100 million would represent only two times current annual revenue. This doesn’t seem that excessive to me. See my blog for more commentary on Amazon/eMusic rumors.

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