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eMusic and Sony: a rocky start, a risky move?

June 2, 2009

bruce

As you may have heard, eMusic inked a contract with Sony to make the label’s back catalog available for download (with a moving wall of two years), including albums by Bruce Springsteen, Modest Mouse and, um, Michael Jackson. I don’t have an MBA from Harvard, and I’m not a self-described ‘Internet (insert buzzword) guru’. But I can’t imagine that any business strategy that starts by alienating your most loyal customers is the way to go, and that’s exactly what eMusic did. Not in the nebulous, ‘the cool kids won’t like it’ way (which they may also have done), but in the real, live ‘hits you in the wallet’ way, as long-term subscribers are losing their grandfathered-in plans at the end of July and getting fewer tracks for the same price; in my own case, dropping from 50 downloads a month to 30. Needless to say, people are unhappy.

So after that fairly shaky start, what’s going to happen? At this point, eMusic is the place to go to easily find obscure indie songs; it’s always my first stop when I hear about a band for the first time. While the pricing structure facilitates this – it’s easy to give new bands a chance – I’ve mostly just been happy that they have ever-increasing amounts of cool stuff (like my most recent find, the Haligonian band Plumtree, who wrote the song that was the inspiration for Scott Pilgrim). But if the idea is to attract a vast new audience by adding Sony’s back catalog, they are differentiating themself not on what they sell, but how much they sell it for; Amazon currently lists over 500 Bruce Springsteen MP3s, for example, which surely includes most of his releases. eMusic only makes economic sense if you are a very consistent downloader. If you are just an occasional purchaser, it makes more sense to just buy MP3s à la carte. This suggests that their shiny new subscriber base would be sensitive to anything that closes the gap between eMusic pricing and ‘regular’ pricing, such as iTunes dropping their prices further. As well, if streaming services continue to improve, casual listeners will have less incentive to download. I guess that’s a risk that eMusic decided was worth taking, and I hope it pays off, especially since they are probably going to start by losing customers.

MP3: Plumtree – Scott Pilgrim [buy]

11 comments

  1. As a longtime eMusic subscriber (since 2006), I’m kind of torn about the whole thing. On the one hand, my downloads are going from 65 to 37. On the other hand, that’s more than I can give my attention to anyway and I am, on some level, grateful that they’re making me take less. Principally, though, it sucks. I am looking forward to having access to some classics that I’ve been too lazy/cheap to buy on iTunes, but I agree that they’re alienating their core indie contingent. I’m interested to see how it plays out.


  2. Sorry to say, I will cancel my eMusic subscription. Now that the prices are getting close to the other outlets, there is no point in having a subscription.

    The real losers here are the lesser known bands for whom eMusic was a good place for discovery by fans.

    [Sophie, how can you be grateful that they make you take less for the same price? If this is really true, then I have some business opportunities you will love!]


    • I guess in my editing of my comment I forgot to mention that 65 downloads is almost always too much new music for me to emotionally process at one time – so THAT’S why on some level I’m grateful to take less. But no, on the surface of it it sucks. But still, at the end of the day, I’m getting songs for .40 cents each. It just doesn’t bother me all that much that they’ve chosen to go this route. It’s like any other change on the internet. A few people will care enough to cancel their subscription and everyone else will just deal with the change after some initial irritation. Their indie offerings aren’t going away, and eMusic has proven to me that they’re good at tailoring recommendations – I don’t expect that I will suddenly have my home page channeled into more mainstream offerings after spending the last 3 three years downloading obscure indie albums.


  3. Yeah, I think the key to eMusic is that you have to actually use your allotment in order to get the cheap download price – for example, if you have a $12 plan, and you are only getting a dozen or so tracks a month, you’d be better off without your subscription. Subscribers who are only in it for the Sony catalog can easily go elsewhere; this isn’t necessarily true of those of us who are looking for the obscure indie bands.


  4. i’m gonna go from 50 to 30 for my $12/mo. but 40cents a song is still pretty cheap. i hope the indie artists get more from this, because sometimes i felt bad about downloading albums for $3 a pop.

    i just hope the majors don’t overwhelm the site, because then it just won’t be “cool” anymore.


    • milowent, that’s a good point about charging more for music. eMusic has said that it wanted to raise prices, but was looking for a ‘catalysing event’ to do it (which is the Sony deal). Here’s hoping that the indie artists get a bigger cut now that the per-track price has gone up.


  5. boo! they’re giving me something i don’t really want from them while taking away 10 of my downloads a month!

    i’m not sure i’m excited enough to cancel my account, but i’m not really thrilled about it, for sure.

    album pricing is kind of nice, at least — albums with > 12 tracks will be counted as 12 tracks, which should make it less opportunity-costly to download sufjan stevens (for example) or compilations.


  6. Lest anyone think that Sony BMG is anything other than an evil corporate piece of dogcrap, remember that Sony BMG, the very company that emusic is getting in bed with (or of which it may become a subsidiary, as some have speculated), started planting a hidden, self-installing and self-hiding spyware-malware virus on their music CDs in 2005. It violated laws in multiple jurisdictions, brought multiple lawsuits, and in the end Sony was forced to remove it from their CDs. The wikipedia page on the Sony BMG rootkit disaster is here:

    http://en.wikipedia.org/wiki/Sony_BMG_CD_copy_protection_scandal

    It self-installed when you inserted a Sony BMG audio CD, just a regular music CD you’d buy at a record store, modified OS files and behavior to cover its tracks, was uninstallable (one of the legal violations in some jurisdictions), and worst of all, LEFT GIGANTIC SECURITY VULNERABILITIES ON YOUR COMPUTER. It was significant enough that the US Department of Homeland Security issued a directive about it (quote from wikipedia, reference URL below the quote):

    “On November 16, 2005, US-CERT, part of the United States Department of Homeland Security, issued an advisory”

    That directive is still in effect, and available here:

    http://www.us-cert.gov/current/archive/2005/11/17/archive.html#xcpdrm

    To me, the words that this sort of intentional malicious criminal behavior conjures up are “cyber terrorism.” If not in intent, certainly in tactic.

    And these are the people that emusic is forcibly raping their customer base on behalf of.

    emusic should BACK THE HELL OUT OF THIS DEAL!


    • I remember the rootkit fiasco, and you raise an excellent point. Just a heads-up though – around here, we think that rape is serious enough that we don’t use it as a metaphor to describe bad customer service on the part of someone selling you MP3s.


  7. […] CEO on the Sony deal. There was a considerable outcry when eMusic raised its rates a few weeks ago, not helped by their terrible corporate communication […]


  8. D-day is approaching rapidly and honestly I am a bit excited. I will play it by ear and see how it goes. but being able to download major artists on a per track basis will be pretty cool. Although I am really bummed that they are raising prices and ultimately cutting down my monthly tracks. I was on the 100 track subscription and sometimes that wasn’t enough. I’ll see how it goes. : / There would never be a shortage of great indie artists out there. Used CDs were a staple of my go to for major artists. when all is said and done the price is about the same, as going the used cd route. which stinks because a cd has resale value, and higher potential audio quality.



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