Rebellion in the eMusic ranks
p2pnet.net news:- At least six eMusic partners, three of them listed among eMusic’s top 60 labels this week, “plan either to pull their catalog from the service entirely or to limit content to back-catalog tracks when their current licensing deals expire,” says a Reuters/Billboard story.
Online music store eMusic operates by subscription at “33 cents or less after a free trial”.
Way back, p2pnet asked ceo David Pakman if there were any plans to start selling individual tracks at low, individual prices in unlimited numbers.
No, he said. “We believe that the subscription model allows us to deliver value to customers in many ways, beyond just in the music itself. Reviews, columns, advice, recommendations, liner notes, conversations with other fans, etc. These are all services with value around the music, and a subscription model allows us to reap economic benefit from providing this additional value.”
Today, eMusic says it offers a, “subscription-based service that allows consumers to own, not rent their music”.
But, “Several representatives of these labels, attending the recent NARM (National Association of Recording Merchandisers) annual convention in Chicago, told Billboard they feel eMusic is trying to pad its subscriber base to make itself a more attractive acquisition target,” says the story, and, “Unless the service raises prices and, in turn, the compensation provided to labels, they intend to withdraw their music in protest.”
The Reuters/Billboard post has the undentified head of one of labels saying, “I hope they can make it a better value proposition for the labels. But if they don’t, we are planning on pulling out.”
Pakman, “defends the company’s pricing and compensation structure, pointing out that the average eMusic customer acquires 20 songs a month from the service, and he pays labels an average of $6 a month per subscriber,” says the story. “Compared with the average of 10 songs a year bought on iTunes, Pakman says the lower price ultimately results in more revenue through greater volume.”
“There’s no question that eMusic pays less on a per-track basis than other a la carte digital services,” Pakman is quoted as saying, but “it’s not clear that 99 cents a song is the right price … Music is an elastic good. If you lower the price, you’ll sell more, and if you raise the price, you’ll sell less.”
Also See:
Reuters/Billboard – Indie labels plan to pull out of digital service, May 4, 2007
p2pnet – eMusic returns, September 22, 2004
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May 7th, 2007 at 5:58 pm
” Music is an elastic good. If you lower the price, you’ll sell more, and if you raise the price, you’ll sell less.”
- someone stop this man!! The RIAA must destroy this individual, we can’t have anyone associated with the music industry actually making sense.