eMusic Sells Out in July

eMusic, the premeire download site for small-label music, has decided to self-destruct next month.

I first became aware of the site’s policy change in a banner announcement on my eMusic homepage yesterday.  First of all, to me, a loyal customer for years, the change means that my $240/ year now only gets about half the downloads/month that it used to (my tracks go from 90 to 50).  And that’s pretty annoying, given that they’ve promised in writing that they wouldn’t change terms for older customers who have been with the company since its beginnings.

What’s a lot worse is the reason that this price-change is taking place:  an expansion of the eMusic catalog to include music from labels like SONY.  Had this price adjustment been made to expand the indie-label catalog, I really wouldn’t be complaining.  This is a business after all, and the numbers have to work out.  But it is truly insulting to have the CEO write an open letter that pretends this move a win-win for everyone when, in actuality, they are doubly screwing-over their long-time customers who already own Springsteen albums in other formats (and who therefore don’t care about this expansion).

Why would this site, which for years has relied on loyal long-time customers such as myself, make a move like this?  I seriously have no idea.  This has got to be one of the dumbest business decisions I’ve ever witnessed.  There is an all-out revolt going on at the blog site with the open letter (you really should check it out).  Please add your comments to the open letter blog if this means anything to you … I’m sure the agreements with these labels have already been completed, but our words are still the best chance we have at a reversal.

If things move forward, I’ll leave eMusic and take my money with me.  For the same price, I’ll be able to buy two more shiny new vinyl albums directly from the labels every month, and many will come with free digital downloads.

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~ by jazzychaz on June 5, 2009.

7 Responses to “eMusic Sells Out in July”

  1. Yeah, this pretty much blew my mind when I saw it. I broke up with eMusic over it – I enjoyed finding rare indie gems on their site, and the recommendations they made, but I can get my crappy mainstream guilty pleasures like Lady Gaga or Backstreet Boys for free through the Jefferson County Library System. eMusic Fail.

  2. Yeah, this changeover was pretty crappily done. Welcome Sony/BMG, plus a radical increase in price hidden as radical decrease in downloads. Not only that, but in a top-down change with no preparation on EITHER front. Surely two plus two can’t be made (or, I believe, imagined)…heck, I’m sure people would have made the connection even if the two moves were separated by 2-4 months.

    I’m gonna be sticking around for a while. I hope to see more independents add in their stuff and a bunch of people jumping in for the cheap Sony/BMG tracks and discovering real music; if instead Sony/BMG hogs the front pages and independents drop out of eMusic, so shall I (drop out).

  3. Hi. How can you possibly write “This is a business after all, and the numbers have to work out.” with a straight face?

    Emusic pays labels out of a pool of money which subscribers give them. First money is taken out for overhead and then the pool is split 50/50 with the labels on a pro-rata basis in terms of how many tracks from each label were downloaded.

    Emusic is wildly profitable since their costs are covered and every single download is at a profit. Unlike labels they don’t have to share their 50% with anyone.

    Costs for digital downloads would be going down in a competitive situation. What we have though is basically a monopolistic situation with itunes and emusic being about 85% of the market.

    Having a subscription which forces you to buy a certain amount of music is not a good thing — it’s a a liability which needs to be compensated for with much lower per-track costs. Emusic is in trouble.

  4. elefunt, thanks for your comment, although i’m not exactly sure what your issue is with my post. what i was saying was that i don’t actually know how eMusic’s relationship with the labels works, but that i would be okay with a price-hike if it were to fund an expansion of music that i actually gave a shit about. given that i don’t care about Sony’s back-catalog, i’m not happy with the price-hike. that’s how i can say that with a straight face. it may be difficult for you to see my face right now, but trust me, it’s straight.

    while your insight into the profit distribution is appreciated, i completely disagree with your opinion of subscription-based music purchases. it has absolutely been a good thing for me because i want to have the opportunity to listen to as much new music as possible. i used eMusic as a testing ground for finding bands that i enjoyed and i was okay with “wasting” some of my downloads each month on albums i didn’t end up loving–the important part for me was the breadth of exposure to interesting new music. and this sort of approach is not at all uncommon among eMusic users. i would suggest that this is quite different than the majority of iTunes users who are more likely to download specific hit songs only (due to higher per track cost) from more well-known artists. if someone was to try to use iTunes in the way that i have used eMusic, they would end up spending close to a hundred dollars a month, and not actually have any physical albums. for that price, any rational consumer would just buy vinyl or CDs.

    what i’m saying is that eMusic has never really competed with iTunes because their content was geared for completely different types of music consupmtion. i disagree with your statistic that is supposed to show some sort of oligopy that eMusic and iTunes have over the legal digital download market; they actually reign over two separate markets (niche and broad, respectively) based on their content and distribution types. with this Sony move, eMusic is actually trying to compete with iTunes in the broader music market, which is bound to be a failing endeavor.

    why would a successful business change direction like this? eMusic has gotten greedy. that’s the only answer i can come up with, especially if, like you say, eMusic has been so profitable.

  5. I don’t know anything about their business model or how they split the profits, etc., but I want to chime in that I, too, am disappointed about this change, and will likely cancel my account as a result. If I want the mainstream label music there is no shortage of places to get it already. As other posters have said, that is not what I come to eMusic for. eMusic is for discovery of new music that I otherwise would not hear about, and I fear that the addition of Sony music will endanger the model of music discovery. For example, will the collage of indie pics on eMusic’s front page be replaced with ads for a Springsteen album I already have, or a WuTang Clan album I don’t want?

    And I certainly don’t appreciate having my downloads cut in half, especially while they tell me with a straight face that this move is good for me.

  6. The next outlet…Amazon. They carry a pretty broad range of music. Not CURRENTLY that of emusic, to say the least. But, perhaps they will pick up the OLD CUSTOMERS of emusic as they inevitable move to the next source. I hope there is one.

  7. Great post. I have been an emusic member for about 8-9 years now and had many of the same feelings when I saw that banner announcement.

    I haven’t yet decided whether it will be enough to push me away from emusic for good, but it is very true that, for longtime members, the benefits have started to erode, just as the prices have recently increased (at least for me). My subscription amount was increased from 9.99 to 11.99 per month, but I did get a bump up to 50 downloads. Now, however, I will be keeping that higher price while only getting 30 downloads per month! It is still a pretty good deal when compared to the pricing on iTunes or Amazon, but many of the albums I usually download are available first (or only available) on emusic! Grrr!

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