May 7th, 2007
Victory Pulls Out Of eMusic
This is kind of old news, as I think it happened a few weeks ago, but Yahoo and others report (via Billboard/Reuters) that Victory and a few other labels have pulled out of the eMusic MP3 subscription service. “at least six eMusic partners — three of whom were listed among eMusic’s top 60 labels this week — that plan either to pull their catalog from the service entirely or to limit content to back-catalog tracks when their current licensing deals expire.”
Gerd Leonhard , noted music industry futurist, comments on his blog: “Bizarre! To the guys at those labels: it’s not eMusic ist’s the USERS who are demanding these prices per song, and therefore impacting how much you are making.”
Here are my thoughts on the matter. EMusic pricing encourages experimentation and allows music fans to make an affordable purchase of music that they might otherwise find too pricey. Fact is, if the music isn’t available on eMusic, they wouldn’t earn anything at all from them. In fact, instead of sending that fan who heard a song on a podcast to iTunes, it may actually send that customer with that impulse intent-to-acquire (vs. intent to purchase) to a file-sharing service.
Due to their overhead and burn rate, Labels like Victory are still married to the “fuck the customer” model, where the music is locked behind a big ticket gateway of a .$99 download or $16.98 Deluxe CD package. With music retail shrinking on a daily basis, and the rumblings about dropping DRM altogether, combined with the oversupply of music in the marketplace they have no choice but to try and strongarm eMusic into compliance. They’re all in revenue freefall and can’t accept that Music 1.0 is coming to a close at a increasingly rapid pace.
The only thing I really don’t like about eMusic as a label, is that they don’t pay for those “free” tracks downloaded with trials, and that could add up, especially for popular titles. But in the grand scheme, i believe their subscribe-to-own model should be embraced and labels should stick with ‘em.
Written by Bill Wilson
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On May 7th, 2007 at 7:41 am
Virgil Dickerson said:
Bill, I agree whole-heartedly with this post. As a label, I do love Emusic as it offers an inexpensive, DRM-free way to get my music. Although the payouts are smaller, I think it is time for indie labels to realize that retail prices must come down in order for music fans to choose to buy music over the many illegal, free options.
I did not know that Emusic did not pay for the free trial tracks. That is a bit of a bummer, but other than that, I love Emusic. I subscribe and I whole-heartedly support them with my label.
On May 9th, 2007 at 11:38 am
Dave Allen said:
I left this comment on eMusic CEO’s post - -
Over here at Pampelmoose.com I have spent the last year documenting the decline of the music biz and it’s been quite the fascinating spectacle. Of most interest has been how everyone points fingers at the music industry as if it could somehow have influenced the outcome. I would posit that it never had a chance. Even taking into account the serious missteps the industry took over Napster we can now see that the writing was on the wall a long time ago.
As you all know Web 2.0 has recently morphed towards radical transparency as a concept, under this rule companies are encouraged to lay bare their process for all to see and it starts with their web sites. I suspect the record industry will never embrace such openess as there’s nothing in it for them and that attitude will once again be their loss. The music industry is wracked with issues and it is finally dying - Warners announced yesterday that they will ‘restructure’ and lay off 400 workers. What does restructure mean exactly? Deconstruction would be a better term and a welcome process. Meanwhile even companies like eMusic need to understand that “feels free” is the best way to get music to customers. Perhaps the buffet-style all you can eat menu is why eMusic is pulling in more sales on average than iTunes?
Dave Allen, Pampelmoose.
On June 13th, 2007 at 7:04 pm
Digital Update #4: Interview with eMusic’s CEO at a quiet revolution said:
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