it’s a brave new world out there
eMusic is simply a retailer, and like any good retailer we do our best to respond to what our customers demand. They tell us DRM is a no-go. Check! They tell us they’re sick of manufactured pop and want music with more passion, grit and heft. Check! And they tell us 99 cents a track is too much. Check again! We’ve done our best to respond to our customers — and potential customers (hello there!) — in an effort to sell more music. And, by pretty much any yardstick we can think of, we feel like we’ve been pretty successful. eMusic’s subscribership has grown by more than 100% a year thanks to you, and through us you’ve purchased more than 125 million tracks in the past three years — more music than every other digital music retailer in the world — except for that iTunes place, of course.
We’re particularly proud of this growth in light of the dramatic decline in the number of people buying music in the US over the past seven years. According to data we analyzed from the RIAA and Ipsos, last year, more than 30% fewer people bought music than did in 2000. This is an enormous decrease. Many have offered theories to explain it — piracy, music quality, you name it — but informed people will tell you that a very big reason is that consumers, inundated with well-priced entertainment choices, think most music is too expensive. DVDs, videogames, cellphone ringtones, cable and internet services — they’re all competing for the same slice of the customer’s wallet, and amid all of that noise, it’s the sweet sounds of music that are losing out.
Being eMusic, after all, we wish this were not so. Emotionally, spiritually, intellectually — however you want to put it — we believe that music’s value is infinite. We love the stuff, as you might have guessed, and we cringe at the thought of some kid opting for a DVD of The Hills Still Have Eyes 19 over, say, the new Arcade Fire album. We want musicians to be fairly compensated for their work (as a struggling drummer myself, I’d really like this to happen), and we wish we could say that the music industry was moving in a direction where it was finally doing that. But it isn’t.
Back in 2000, as CD sales began to decline, the music industry responded by actually raising its prices — to as high as $18 for a single CD! Unfortunately, this hasn’t been a productive strategy and music sales have continued to fall dramatically — by more than 20% this year alone. Think back to that RIAA/Ipsos data about 30% fewer people buying music since 2000… might these two statistics be related?
Most of you know about price elasticity. It’s the basic economic concept that says, for certain goods, when you raise the price, sales will fall disproportionately, and so the increased revenue doesn’t make up for the lack of sales. And if you lower the price, sales will rise disproportionately. Music is an elastic good, and we have now seen that by raising prices, the industry in fact did not make up the revenue, and, in the end, only slowed sales.
The biggest shock to entertainment companies, in the era of Web 2.0, is that the customer sets the value of the music — not the label or the artist. I’m not saying that music is not worth it — again, I wish it were easier to make a living as a musician. But we are now in the era of “you” — just ask Time magazine, MySpace, YouTube, Billboard magazine and tech visionaries like Gerd Leonard. The customer now decides which music is successful and how much they’re willing to pay for it. And, the truth is, our customers tell us that 99 cents a song is not the right price for most music — particularly for music that they haven’t heard of before.
So, eMusic is all about trying to satisfy two concerns that most former music buyers have: a) they aren’t sure what to buy anymore because they don’t hear anything good on the radio, and b) they think music is relatively expensive compared to DVDs, etc. eMusic makes a splendid bargain with our customers: get a better deal on music from us than what you get at iTunes, and we’ll work really hard at helping you discover great music. But in return, you spend more money on music than you normally would. And that’s good for everyone: artists, labels and customers. And here’s the bottom line: the average customer only spends about $12 per year on iTunes; by contrast, the average eMusic customer spends about $168 per year with us. Imagine how different our industry would look if more retailers could serve their customers so fully.
A healthy digital music business needs a variety of business models and a variety of price points, just like the movie biz (think theater, DVD, pay-per-view). What we offer to record labels is the opportunity to sell their product to a customer who’s passionate about music and will buy it in large quantities — if the price is right. eMusic is the “long tail” — we don’t sell many hits, but over two-thirds of our catalogue of 2.5 million tracks sells at least once every quarter. That’s far above and beyond iTunes. eMusic sells music that doesn’t sell anywhere else.
Sure, on occasion, a few labels will come and go. And we wish them well. We love their music and wish they would work with us. Our model may not work for everyone. But one thing is for sure — if the model doesn’t work for customers, it doesn’t matter what the industry thinks. That’s one fewer retailer selling music. And it’s a brave new world out there — one we had better all adapt to, or the music industry decline will just continue. We’re simply trying to do our part to help grow it again.
— David Pakman
CEO, eMusic
Thank you, David. I’m going to make everyone I know read this.
I very much appreciate your post. It’s encouraging – and, unfortunately, rare – to see a CEO speak directly to the customer base and explain corporate policy.
Your post left me with some questions:
• Which labels are leaving?
• Are they going to leave their back catalog, or withdraw entirely?
• Is eMusic trying to replace the departing labels with new labels? If so, which ones are joining eMusic?
I realize that some of these questions probably can’t be answered now, but — just in case the information is not confidential and/or the decisions are not in flux — I thought I’d ask. Also, and please forgive my asking a question based on purely personal interest, but I’ve read recently that the Soul Jazz label will soon make “much of [its] catalogue available to download . . . from most other sources.” [url=http://www.souljazzrecords.co.uk/index.php] Soul Jazz Website[/url]. Do the “other sources” include eMusic?
Somber tone. I hope this message is not coming in light of any unwanted changes in service.
thanks for your post. it’s not often that CEOs try to communicate directly with their customers, especially at eMusic….
Thank you for bringing up the issue of elasticity. I have not bought a CD that was not on sale (US $9.99 or less) in over a decade. Ever since I was in college, I have spent about the same amount of money in music every month, more or less. Now, most of my budget goes to emu. Price (second only to no DRM) is what attracted me to the site. Now I can afford to explore genres and artist I never would have considered before.
But back to economics: The definition of a fair price is willing buyer and willing seller. I am not willing to spend more than certain amount of money for a particular track. And a buyer is someone who is willing and able to purchase the good or service for the asking price. Again, I am able to spend lots more for music, but I am not willing to. There are many entertainment products in the market that I am able to purchase, but I only am willing to do so if I think I am getting a good deal.
Seconding the thoughts I found above, it is great to hear from a CEO, but with 17dots being cleared of all other articles on the front page and this letter prominently displayed, it leaves a subscriber uneasy..
I was ready to buy the latest Modest Mouse album from your site because there was no way I was going to pay money for a DRM track, but when I went to your site, I wasn’t able to search for the album without registering first. This is a dealbreaker for me. I want to know if what I’m interested in will be available before having to sign up for a subscription service. At the end of the day, I ended up buying the album on CD because I wasn’t sure what you had and didn’t have. Why do you not let potential customers see your inventory? It is very frustrating as a consumer to not be able to buy mp3s to begin with, but when the one company that does sell mp3s won’t tell you which artists they have and don’t have, I’m skeptical about signing up before getting to see the merchandise. I think that this is a policy that you should rethink, I know it has cost you at least one potential customer.
Davis,
Go to emusic, click on the login or signup bottun or whatever. It’ll take you to a screen where you’ll see a Search box. You can search until your heart is content without buying in.
The new Modest Mouse isn’t there, by the way.
Justin
From the linked Billboard Article:
“Billboard is running a story this week about several indie labels who have grown disgruntled with the eMusic digital music service and plan to cancel their relationship with the service once their licensing deals expire.”
You can also read the story at Yahoo News:
http://news.yahoo.com/s/nm/20070505/wr_nm/emusic_dc_1
Seems to me this is the reason behind the tone of this excellent post.
Thanks for the link. There was definitely something conciliatory about that fpp.
Interesting counterpoint, and I appreciate seeing it. I don’t, on the other hand, appreciate seing it *here* so much. I wasn’t deluding myself that 17 Dots was unaffiliated with eMusic, but a long, involved corporate response is at least out of place in what’s generally a space reserved for music appreciation. Would I have seen it at the regular site? Good question, particularly since eMusic’s site is best navigated with sextant and compass. If an actual Information Architect ever got ahold of eMusic, what a boon that would be.
David, We appreciate the effort to communicate, a rarity in itself. Labels will always come and go, that shouldn’t be anything to get up about. In the long run it will be their loss. The business models of E-Music and Magnatune (my two faves, where most of my money goes), blaze the trail to how music will be sold in the future. We just hope you can hold the line while the game develops and segments countinue to splinter.
Now that this mini-”label revolt” is receiving media coverage, I think it behooves eMusic to reassure subscribers that it’s taking steps to sign up (and has, in fact, recently signed up a number of) new labels.
I also thought Bill’s point was interesting. Obviously, there’s a connection between 17 Dots and eMusic, so I didn’t mind seeing the CEO’s post here. I read and trust the regular 17 Dots hosts, though, so I’d be interested in their feelings about these impending label defections (and if the regular hosts don’t feel comfortable commenting on it, I’d be interested in hearing that, too).
As someone who just signed up for a year subscription in March, I must admit I’m starting to get nervous about my music investment. As the old adage goes, “You can’t keep a bad idea down,” and I envision other indie labels pulling out simply because they see these labels making this move. While I think this is a short-sighted and ultimately self-defeating move, I could see Emusic taking a hit in the meantime. Wondering what kind of damage control is going on.
Also, I see this less as a “revolt,” and more as a heavy-handed tactic by these labels to make their customers pay premium prices for their titles. They see Justin Timberlake get ten bucks for a packageless product over at Itunes, and they want that too. They don’t seem so different from the Big Four labels that many of them regularly demonize.
my two cents:
i’ve been an emusic subscriber almost 6 years and have come nowhere close to leaving because of bad press, slumps in new releases, label departures, message boards on the fritz, etc.
on the flip side, a bunch of external events have actually made life at emusic exceedingly rewarding - broadband, cheaper disk storage, cheaper memory, media mgmt software advances, etc. none are pressworthy or fear-inducing, but give them their due. those items create a highly manageable infrastructure that will lead you to itunes or emusic. but if the average itunes customer is spending $12 a year (that’s 12 trax) then why have broadband? why have any storage at all? piracy is the only thing i can think of…
scott, if you leave emusic because of bad press what do you gain? stick around, hit the message boards and enjoy the ride. with emusic you have a tremendous community to explore…with itunes you’ve got your 12 hits to play again and again.
68
Water, Shelter, Food … Emusic.
Incidentally, today is my first day on the 2-year, 65 downloads/month plan. So I’m going to be around for a while. And after the 5 years that I’ve been here already, I’m not afraid of a few labels going away. There will always be others and there will always be great music to be found here. I may simply have to start digging a bit deeper again. And that’s fine with me.
I’m not worried either. I’ve been with eMusic for over a year now and have been very happy with it. I’ve seen labels go before, but there’s always new ones that come on board and old ones that I haven’t discovered yet. I’ve even downloaded some cdbaby releases, which arguably isn’t even a label at all.
I do think the industry and in fact many industries are undergoing some serious changes. It’ll be interesting to see where it all goes in a couple of years..
Like 68, I’ve been a subscriber at eMusic for 5 years. We have seen the end of unlimited downloads and acquisition of the company. We have seen the site go through hiccups and almost die, only to come back stronger than ever. We panicked then, but I’m not worried right now. eMusic today has so many more subscribers and so much more music, and the website is so much more stable and powerful than it ever has been. Some labels are leaving. There is still plenty of music to be found if you explore a little, and more labels will be added. This kind of time is precisely when I feel eMusic needs our support. And the labels pulling out do not.
I run a label, and we’re distributed by a whole bunch of online retailers. I’m here to say that the labels who left are smart. I on the other hand cannot leave. My label is small to medium in size and we have to keep the exposure that we gain from being available in as many stores as possible. We get tons of downloads from eMusic every month, but guess what—>we don’t get any money from them. I don’t care if someone eMusic spends 168 bucks because the label and our artists are seeing pennies.
However, the checks we receive from iTunes for fewer sales are FAR better. Why should I stick with eMusic? It cheapens what each record is worth. We make really nice looking, really good sounding records. There are recording costs, publicity (press, retail, and radio) costs, and promotion costs (ads, posters, stickers). Who is going to hear our music if we don’t spend that money? How is that money going to get paid off and turned into profit to make more records if copies of physical (still-reasonably-priced) cd’s aren’t selling as much as they used to. Oh yeah, people download them. So what happens when we make a dollar off of an entire album. Let’s see: not much.
A Label:
The business questions you need to evaluate are (a) how many people choose not to buy your discs elsewhere (e.g., from other online sources or at a record shop) because they’re available on eMusic, and (b) how many people who download your discs on eMusic would seek them out elsewhere if they weren’t available on eMusic.(n.1) I’d guess that, for many small to midsize labels, the downloads they get from eMusic are “unique,” i.e., the people buying them wouldn’t seek out those titles elsewhere if they weren’t available on eMusic. If that’s the case, then — on purely economic grounds – those labels would be foolish to remove their titles from eMusic.
Maybe there’s something to what you say, but frankly, I’m having trouble getting past the hostile tone of your comment. And I don’t have an easy answer to the questions you ask in your second paragraph, but I wonder how many labels have given those questions much meaningful thought. In fact, I’d bet that many labels have deliberately chosen not to adapt to the new market dynamics, preferring instead to try to make the market adapt to them. But adaptation is possible, and can be profitable. There are ample anecdotal examples of success, even on a shoestring budget, by savvy artists using – rather than fighting – technology. The principals behind the Blair Witch Project didn’t have money to promote their movie, but they used a savvy internet and street campaign to create tremendous anticipation for their film. Clap Your Hands Say Yeah didn’t have a label at all, but blog exposure led to such a positive buzz for their disc that it eventually sold more than 500,000 copies. As I said, these are anecdotal examples, but they are examples nonetheless, and they provide lessons for labels willing to adapt and grow.
In any event, I hope your label stays with eMusic.
— Daniel
________________________________
(n.1) In fairness, I suppose the last question you’d have to answer is whether there is some combination of (a) and (b) that makes it economically superior to not be on eMusic. For instance, I discovered the Blood & Fire label on eMusic, and I love it. If they left, there’s no way I’d buy the same amount of B & F discs that I’m able to download on eMusic; it would be cost-prohibitive. But maybe I’d buy a B & F disc every few months. If the revenue B & F generates on that individual sale is more than what it gets from my consistently downloading their titles on eMusic, then I suppose I can see a rational label decide to pull their titles from eMusic. On the other hand, the B & F label is a rare case for me. I consistently download titles from a lot of other labels — e.g., Yazoo, Pressure Sounds — that I would never replace with disc purchases if those labels pulled out of eMusic.
‘A Label’ you need to look at overall revenue and not the amount you are getting per track. You will see more money from eMusic than from iTunes, just don’t worry about dividing by ‘number of tracks’ it’s not relevant. Welcome to the future.
“a label” you are a coward for not revealing what label you actually are. If revenue to your label is so insignificant why not tell us who you truly are? In fact why are you even still on emusic? If you can’t adapt to the new shifting music paradigm created by the online marketplace then you are doomed as a label. Your attitude will guarantee failure and when you go out of business no one will miss you. You are not needed. Your bands will switch to other labels and in all probability will continue to make money through concerts and concert merchandise. Good luck selling your overpriced music to the morons who use itunes or purchase your 15$ Cds
Now that I’m on the eMusic Connoseur 200 plan, I spend more money on music than I have in years. I believe artists deserve to be supported so they can keep making the music we love, but new cds have always been overpriced for music addicts. Labels moan about P2P like they moaned about second hand cds, but they fail to realise that some people are passionate about music in a way that listening to the radio won’t satisfy. David makes a great point about overall revenue going up and if only the record industry would wake up to itself everyone would benefit.
For me, a music consumer, there are two sides to the eMusic story.
First, I buy a lot of music that I otherwise wouldn’t. There’s a lot out there that I want but I also know that I won’t listen to it all that much. What’s that music worth to me? Not $10-$12, that’s for sure. The label/artist is making a *little* off of me, where otherwise they’d get none.
Then there’s a darker side that I’m still struggling with, and it’s purely *my* problem: there is one particular label well represented on eMusic that got A LOT of my music dollars long before I was an eMusic subscriber. I unfailingly purchased their physical discs, and they made an ‘okay’ cut off of each of them, I’m sure. (cue ominous music) How many of their discs have I bought in a store or from an web retailer since joining eMusic? Yeah, I’m ashamed for being so cheap, particularly when I know that I’m ‘biting the hand that feeds me’. Is there anything keeping me from buying the music elsewhere other than eMusic? No. Why don’t I? I’m cheap.
Okay, so time for a novel (as far as I know) idea: Why not on a disc-by-disc basis (or song-by-song, for that matter), can I not choose to pay EXTRA on eMusic for it? If, for instance, I purchased a disc and also said, ‘Please give the label an extra $2 (or $3, whatever)’, why should I not have the option of doing so? How hard would that actually be? I would seriously jump at the opportunity, eMusic would be going ‘the extra mile’ to help the labels it supports, and everybody wins. No?
Thanks,
Mike
There are a lot of questions I’ve always wondered about, but emusic has never been terribly forthcoming about letting people know how the business works. Most important question right now: when a label signs on, does it have to offer its full catalogue, or can it offer selected items, or new items only?
It seems to me that if “A Label” would benefit from a presence on emusic but also finds the revenues minuscule, perhaps providing a limited selection is the way to go. An album or two, not the newest ones, by the top sellers, perhaps. Get us hooked on the product cheap, and if we want more, we pay more. (Just as long as itunes isn’t the only alternative.) Is that feasible?
“A Label”, your complaint is not unlike the chicken joke in “Annie Hall”. You tell us you really wish you could leave eMusic but the next thing you say is “we have to keep the exposure that we gain from being available in as many stores as possible”. So eMusic is filling an important role for you, then? Giving you exposure? You should have told us which label you are, then you would have had some more, eh? While I empathize with the fact that you put an effort into producing an album and it’s a shame to see it sell so cheap, as a businessman/woman I’m sure you’ll appreciate that a product is ultimately only worth what people are prepared to pay for it. On eMusic, people are prepared to pay 25 cents a track. On iTunes, 99 cents, but as you say, there are fewer of them (How fewer? In all this debate I haven’t seen any actual figures from a record label. This sort of information would help settle the matter, or at least clarify a position).
[quote]Okay, so time for a novel (as far as I know) idea: Why not on a disc-by-disc basis (or song-by-song, for that matter), can I not choose to pay EXTRA on eMusic for it? If, for instance, I purchased a disc and also said, ‘Please give the label an extra $2 (or $3, whatever)’, why should I not have the option of doing so? How hard would that actually be? I would seriously jump at the opportunity, eMusic would be going ‘the extra mile’ to help the labels it supports, and everybody wins. No?[/quote]
I don’t think that would work, because you’re asking for a voluntary contribution to a label. But the general idea is worth exploring. For instance, what if there was a higher-priced subscription plan by eMusic that offered special access to a given label’s artists (e.g., online interviews, demos, and so forth), with a predetermined amount — minus hard costs incurred by eMusic — going directly to the label, in exchange for the label agreeing to keep its titles on eMusic? Or, for instance, what if subscribers agreed (contractually) to purchase one or two of a label’s physical discs annually, at full-price, in exchange for the label agreeing to keep its titles on eMusic?
I’m sure there are problems with these ideas, but this situation opens space to explore new ideas. That’s a constructive discussion that I’d welcome.
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.
Another idea suggested on the eMusic forums: Provide links on the eMusic album’s page, linking to services and products related to that album or artist. I.e. link to a place where you can buy tickets to their concerts, link to a place where you can buy band-related merchandise (t-shirts, mugs, calendars, DVDs, and whatnot), and so on.
Very interesting to read everyone’s replies…
I appreciate everyone who offered advice. Please keep in mind that being a small indie label (trying to get bigger) at a time like right now is very difficult, and I definitely feel very conflicted about a lot of what is going on.
I do lots of novel things with my label. We do everything we can to get people interested. Our music is not over-priced. If it were over-priced we would be turning a profit. Which we aren’t right now. I work 60 hour work weeks to put out music for musicians who aren’t just great musicians but great friends. That 60 hours is not spent on the label. There’s another 40-60 once I get home from work.
Grassroots is defintiely the way to go, Daniel…I agree with you. But Clap Your Hands were a complete anomaly based on the Pitchfork zeitgeist. Blair Witch had TONS of money spent on it, but nothing like what Mission Impossible 3 did. It was part of the indie film zeitgeist. I have 20 friends who are indie filmmakers that could follow the exact same formula as Blair Witch, but would never reach anything near that level of attention. These are flawed examples in every sense.
Hype cannot be purchased and it can’t even be earned; sometimes it happens with money and hardwork, but there is no formula. We’ll keep trying to adapt and grow, but I think what music enthusiasts need to understand about price elasticity is that 2 bucks is never going to be an acceptable price. Despite indie’s current high standing out in the world, indie labels do not have deep enough pockets to continue on like they are now forever. We are still a number of years away from digital-only releases ruling the market. As long as we still have to produce physical copies to stay relevant and to garner press attention and to build new artists this conversation is going to be hard. It just has to continue.
As for your idea that subscribers have to purchase one or two physical discs a year, I really doubt it would work. Plus, you could never guarantee that they HAVE to pick from a specific label. The smaller labels probably wouldn’t benefit too much.
How about this idea: if someone downloads an album from eMusic, they get a deeply discounted purchase price on a physical copy direct from the labels. THAT would be great.
Cheers.
“As for your idea that subscribers have to purchase one or two physical discs a year, I really doubt it would work. Plus, you could never guarantee that they HAVE to pick from a specific label. The smaller labels probably wouldn’t benefit too much.
How about this idea: if someone downloads an album from eMusic, they get a deeply discounted purchase price on a physical copy direct from the labels. THAT would be great.”
Yeah, I like that idea. There’s a long discussion somewhere on the eMusic threads where subscribers are asking for liner notes and/or booklets to be made available via eMusic. So I think a market is there (how much of one, I don’t know). I’d happily pay for several of the Blood & Fire discs at a discounted (not necessarily a deep discount, either) to get the booklets, notes and art.
As for my idea, I see the logistical difficulties. Maybe there’s ways around it. For instance, have labels organized into groups (maybe randomly, maybe based on genre), then pool the money from the sale of physical discs within that group that arose from eMusic, and distribute it in some reasonable way (MLB, for instance, has profit sharing in an effort to equalize the big market/small market imbalances). There are other ways to address those problems, too.
I also just read about some other good ideas I haven’t seen proposed elsewhere, e.g., a stock market approach, where price is fueled by demand (with price floors set to ensure that small labels get some fair payment for downloads); a greater emphasis on boutique labels, which consolidate all the business aspects for a band, in exchange for a larger fee. All flawed ideas, in one way or another, but all worth considering and exploring.
@A Label: “How about this idea: if someone downloads an album from eMusic, they get a deeply discounted purchase price on a physical copy direct from the labels. THAT would be great.”
I agree, that would be awesome. Its a little hard to justify full price for the CD when you already own it digital, but there have been several cases where I wanted the CD (and only a few cases where I’ve actually bought it).
Simple math: so eMusic pays about 1/4 as much per song….if people are spending 8 times as much (David’s numbers), that works out to three to five times as much per customer going to the labels. That’s just the dollars that go to the labels. The reason “A Label” is getting so much more from iTunes is probably because eMusic’s customer base is a small fraction of iTunes’.
Advice: don’t listen to people who say ‘Web 2.0′ (no offense
Another long-ish subscriber (4 years? not sure exactly - I started in the “unlimited” days though) and I do hope David and the eMusic crew are reading as well as posting here.
I appreciate the info from David, and also the problems “A Label” brings up. To state what should be obvious, eMusic will have to keep both its customers and its suppliers happy to stay viable.
I think more info from behind the eMusic curtain would help with the former, as we’ve all seen whining in various places (mostly in album reviews) about labels disappearing, or different availability in different regions, etc., and for the most part these details are left unexplained. People may not always like what they hear, but anyone on a monthly plan is free to go at any time, so anyone who’s *that* worried about finding 50/65 songs to download per month has a pretty easy exit. (Plus in my view, some serious curiosity problems.)
I’d also like to think the labels and musicians are getting paid fairly, but probably don’t have enough info or background to make that determination. I doubt I’m telling “A Label” anything new when I say that running a small music label is a bad way to get rich, but no customers here are trying to screw anyone either. Those folks are elsewhere, downloading for free.
However, I do feel safe in predicting that a business model dependent on selling physical CDs or other formats isn’t the way to go. I do still buy CDs, but once they are imported into my computer the disc itself sits on a shelf untouched, mostly. It’s the music, not the media. eMusic and iTunes offer different versions of a similar idea (pay per month/pay per song) that is valuable for its simplicity, which might ultimately be more useful than “fairness.” If I had to decide how much every single different song or album was worth to me on an individual basis, it’d get pretty tedious.
Anyway, sorry for the length but I think the many fans of independent music and eMusic want to help find a way to keep the train on the tracks full steam ahead etc. Thanks -
I’ve been a long term CD buyer over the years as I am old school and have worked enough to be abke spend most of my money on music.
What emusic has done is allow me to discover more new artists and spend money on them than the tired old classic rock or whatever they are calling pop junk they play on the radio. I hear about new music on podcasts and find many of then on Yahoo Music unlimited my new selected Radio station. When I like them I run out and buy the CD.
I buy more CDs than ever and get any extra music on Emusic to keep my iPOD filled with new music to mix up with my extensive CD collection.
I like the Progressive Rock genre and people that follow it know that most of the artists have day jobs and are happy to support them because they know if they don’t the music will die.
I am sad to say I think some people these days just steal all their music.
Isn’t it better to teach them to pay for it maybe at a lower cost if money is the issue for them? They can find plenty of music to pay for and learn the valuable lesson of buying.
porieux - Re: Advice: don’t listen to people who say ‘Web 2.0′ (no offense
I’m listening and I’m applying it in my current discipline. It’s real, it works and transparency is everything so why do you remain anonymous. By the way, I only take offense at a glib comment such as (no offense)……if you mean it, say it.
Dave Allen Pampelmoose
We aren’t trying to get rich, we just wanna stay financially even. All the money goes into the label…not into my new helicopter’s down payment. But you probably knew that.
ok. 2 more cents.
pakman should really read “emusic” because this is a team of folks that have humped the highways and met users, sat down with ryko to ask “why on earth are you leaving???”, transitioned the int’l pay model and weathered the storm, incorporated some credible writing support (yancey peers), and they still keep a light on for jalgebra.
the team’s primary goal has to be to grow the subscriber base.
in tandem with that is to manage the label offerings so that all labels have a decent crack at meeting their revenue needs.
think about that - if emusic doubled the number of labels but kept subscriptions at current levels that would probably hurt “A label”s position because he/she now has to compete against more players for the same pot of money. and discord follows.
we’ve been hearing discord.
IMHO emusic has to grow the subscriber base targeting those folks who, like a good many of us, have abandoned cd purchases. not only does that validate pakman’s claim that emusic has actually helped the music industry, it also benefits the labels in the fold.
to support that, look at the subscribers who have been here 4 years - they usually have dl’d over 400 artists and from over 60 labels. eventually, every label gets to have its day in the sun. unless you have every label under the sun here…
with that said, emusic has to balance its subscriber base and growth to the number and quality of labels it has in the fold. if that gets too far out of whack labels will leave to go to another subscriber island - and THAT is emusic’s worst case scenario moving forward.
A label: i agree with your 2nd post and glad you took a more engaging posture. i don’t believe you have to do anything earth shattering to establish a brand identity. i think you need a partner who’s subscriber base will access your catalog and, in turn, doesn’t spread the revenues over too broad of a label playing field. there is a very real chance that if emusic succeeds, you succeed.
68
OK, So, Tzadik left (John Zorn’s label). Who else?
Emusic keeps me honest. I’m over 50 (how did that happen!?), I listen to KUSF (college radio) at work, read all kinds of media from Pitchfork to Mojo. I download free MP3’s whenever they present themselves and we all know about Hypemachine etc. We also have record/cd stores with “insurance policies” where you get 75% of your money back, no questions asked and you can use start with 1 CD and add the difference as many times as you want. It is like rent. There are so many ways not to pay it is ridiculous. I would never do that to a small band or label. The mainstream hit records iTunes carries are another story. Itunes has brought back buying singles again. What percentage of their customers buy complete albums from iTunes? Without Emusic I don’t think I ever would have downloaded Lustmord and attended the show of a band called “He Poo’s Clouds” or Smog or Black Heart Procession without taking a chance on their catalog without Emusic. I also wouldn’t go to iTunes to buy This Mortal Coil a 3rd time (LP,Cassette,Digital). With the way new bands are touted today, music has become perishable like produce and sometimes seems to get stale pretty quickly. Often I believe, many of them are created by some marketing group( “Ok, I need a blonde lead singer ex model with a tall bass player who sound like Joy Division meets Liberace. See if that sticks”) From what I’ve been told by a friend who tours with a well know punk band, they make all their money from selling mechandise. Not from their recordings. So get out and support the bands you’ve discovered and get the money straight to the real musicians. 4AD has a Blonde Redhead ad on every music website and magazine on the planet. I don’t know how many new fans they aquired per dollar spent but I do know that their 2 shows sold out before the CD was even released. Was this Label money wasted on a band with a long standing following? I used to go to the Gavin Report convention and the labels wasted tons of money on liquor, 1st class hotel rooms, free merch, cd’s, drugs etc. I don’t know if they continue use these tactics at SXSW or CMJ The jerkoff label and radio people didn’t appreciate what any fan would. (BTW Why are there so many journalists on vip/guest lists and I rarely see any reviews of the show?)
I also had a friend who worked at Maximum Rock and Roll. The memory I have of that place is of the walls of thousands of 7″ records by artists who have not and will never be heard (like David Bowie at the end of “The Hunger”).
I guess what all this babbling means (it’s the wine talking, sorry) is these bands have a chance to be heard and the small amount of money they make from Emusic is a gamble and an investment in their future.
Correction He Poo’s Clouds was Final Fantasy
I’ve been a member of emusic for over 2 years now and I can’t believe how much awesome music I’ve been able to discover. I don’t have an iPod and I flat out refuse to use iTunes, except during the Pepsi promotions that give out free song downloads. I stopped listening to the radio in 1989 because I got sick of what I was hearing, but I was still somehow able to find other good music. But as years went by, finding the good music became a lot harder and it came to the point that I had basically given up on the current music scene. I bought maybe 5 albums a year at most. Now, I’m not only listening to much more music than I have in years, but I guarantee you I’m buying much more music than I would be if I hadn’t become a subscriber. And, I’ve bought tickets to see bands perform who I never would have even known had I not found them through emusic. There are labels that want to leave? Fine. But they won’t be getting my business elsewhere — and I’m sure I’m not the only one who feels this way.
Warp Records is gone.
As a professional musician, and member of several bands with tracks on eMusic and several other retail sites I am generally split on the subscription model, I like the exposure we get, but based purely upon the dollars paid out by the services I am discouraged. As a label it seems win-win. As a music fan I think it is great! As an artist it still sucks, but that’s not the fault of the retailers.
Here’s why I think the labels don’t like the subscription model, and eMusic in particular.
As a consumer you pay your subscription fee and the label gets paid out from that fee. Sounds fair, however, that depends upon the amount of money the service collects and the number of songs downloaded. It’s kind of like getting royalties from radio.
Like most subscription services if there are 1,000,000 downloads and $250,000 in subscription revenue the per song rate is 25 cents. If there are 2,000,000 downloads and still $250,000 in subscription revenue the per song rate is about 12 cents. eMusic deducts expenses and pays 60% of what is left to the label. The other subscription services also deduct expenses but pay 40% or less to the label. The other services don’t let the consumer keep the song but offer the option to pay again to keep the song. This pays out similar to iTunes, the label keeps about 65-70% of the sale. (You can find these examples on the CDBaby or TuneCore websites.)
If you look at this you can see why, from a pure dollar perspective, why labels would not want to sell on eMusic. With the other subscription services they can get paid 2 times for one song or album by the same consumer. It sucks for the consumer, but great for the label.
But, what the labels aren’t really taking into consideration is that members of the other services are NOT paying twice to keep a song or album. The majority will not foot the extra 99 cents or 10 bucks when they are already paying monthly. The consumer that does that is the exception. It seems to me that they are jumping ship just for this remote possibility of making the bigger permanent sale. But, is it really worth it for them to do this?
If you look at all this as a signed (major or indie) artist what matters is that the label is depriving the artist of the exposure eMusic offers through the subscription service. Because of the way most record deals are structured the artist doesn’t get paid for a long time, label keeps all the money until after the costs of recording, production, manufacturing, marketing and promotion are recouped from sales.
In the spirit of full disclosure, both the bands that I am in are unsigned and operate as labels on iTunes, eMusic and the others.
I feel very sad for the decision of some labels to leave, because I really love some of their music. The worst part, and something I think they´re not aware of, is that at least in my case (and maybe the rest of Emusic international subscribers) I´m not going to be able to support them anymore. In this moment Emusic is / was their only chance to be know in other countries -Pandora was an option but we know how it ended-, and by the way, iTunes will never be an alternative for a number a reasons, being the fact I don´t have an iPod or want to acquire one as one of them .
Sounds arrogant, but it´s the true: People IS in charge now, even Rupert Murdoch accepted this in an article published in Forbes (www.forbes.com/free_forbes/2007/0507/138.html). Even Indie Labels needs to adapt somehow.
I’ve had a subscription for seven years. And I’ve seen labels and artists come and go. I love e-musik. But I’m annoyed about the new European department of E-music. All the sudden I can’t download artists like Elliott Smith and Arcade Fire anymore. Probably because of different license deals in Europe (I live in Denmark). Another thing is that the shift from dollar to euro made my subscribtion 15 percent more expensive over night! Coupled with less labels for me to buy - I must say - yes it’s a brave new world…but not a better one!
Why did you establish a European e-Music?
I don’t care if Tzadik downloads count as doubles, I need my Tzadik downloads.
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