eMusic CEO Blames Indie Labels For Price Increase
When eMusic recently added major label Sony to its previously indie only music subscription service, it also increased prices per download. Still cheaper than iTunes and others, the reaction from many eMusic fans was strong and negative.
Since the initial announcement, the company has been on a bit of a campaign to clarify why the price hikes happened; and in an interview with Wired's Eliot Van Buskirk, eMusic CEO Danny Stein said that it was the independent record labels and not a deal with the big bad Sony that forced the price increases:
"Our existing labels, for the most part, have been asking us to raise prices for a long time. What I told the New York Times is that we were looking for a “catalyzing event” to do it. And really, the catalyzing event is adding catalog, adding more content. We used this as an opportunity to do it, but we didn’t do it because of Sony… …The price change is something that all of our labels have been asking for, for a long time, and it’s really a necessary move for us to maintain a viable business."
While any label wants more revenue, some members of the indie community admitted, a major strength of eMusic was low price music discovery and that equation has changed with the price increases. Another often mentioned complaint is that eMusic's uniqueness as an indie only community has been destroyed with the addition of Sony.
It does seem a little coincidental that a price rise came at the same time as a major label adding their catalogue.
To say they were waiting for a catalyst, and even moreso saying that catalyst was a major (especially on such an indie driven service) seems like a rather massive copout.
Whilst I never used eMusic much, the low price and easy music discovery for indies was a big plus.
I guess they’re on there way to being ticked off the list as yet another place taken over by majors. Particularly as they ‘say’ they consulted with the indie labels, and yet many of them weren’t spoken too.
Have there been any announcements yet from any of the “estranged” indie labels (SubPop et al) about rejoining eMusic in the wake of the price hike?
Thanks for following this as it develops. One suggestion, though: Consider creating an “eMusic” tag for these posts; the “downloads”, “major labels”, “indie labels” tags are a bit nebulous on their own.
“But several indie entrepreneurs that have spoken publicly since the announcement and others who have talked to Hypebot privately paint a very different picture. It does not appear that eMusic consulted many of its indie label “partners” before the Sony announcement and price increase.”
Names? Links? I’ve been following this and haven’t seen anyone speaking publicly about this other than the rare statement from eMusic.
Indie Label Here!!! Branch Records and I call B.S. on that crap!!
Echoing Joshua… Indie label also. I call BS too.
Curious which “indies” they heard from.
When you indie label guys say “crap” – do you mean me/Hypebot or eMusic?
Hypebot, seriously, why all the hate for eMusic? In previous posts you complained they weren’t paying indie labels enough and now you’re complaining that they’re raising prices! What is it going to be? It doesn’t sound like Stein is blaming Indies, but that its a response to what seems to be general consensus (and indie label complaints) that their payouts have been low!
I know Epitaph wanted them to pay more per track.
I’ve been an eMusic subscriber for 3 or 4 years now, and during that time I have been a huge fan of the service. That said, I am also a fan of musicians, and I understand the economics of running a small label are not easy or simple.
This is a big increase in cost per track, and that smarts. But I think people aren’t being entirely fair with eMusic. Expanding their catalog dramatically and adding a lot of popular artists IS adding value to a subscription. Not necessarily enough to offset the decrease in downloads.
It is hard to imagine that most indies would oppose getting more money per track. It’s hard to imagine most bands opposing this. Maybe a couple labels might feel otherwise, but I seriously doubt a majority would. I can imagine a scenario where this will open the doors to more labels that I as a subscriber can download.
Parts of this news are definitely a bummer, but it’s not all bad news, and it’s not realistic to expect struggling artists and labels to exist on 25 cent downloads. 50 cents / song is still pretty fair, and much less than you can find even on the low end of iTunes’ store.
Well, eMusic lost DragCity not too long ago, because of the low royalties (a DragCity manager explicitly said so in an interview). Increasing the fees could certainly help bringing them back to eMusic.
Here is the Drag City quote:
Is $7 an album enough to keep an indie label in the black? Not according to Rian Murphy, sales manager at Drag City Records. Murphy’s label decided to pull its catalog from digital subscription service eMusic because it had to sell three times the amount of songs to make the slim profit iTunes already provided. The service provides plans that can whittle the price of a song down to 27 cents — appetizing to consumers but nauseating for artists.
“Keep your eye on the bottom line, and if it doesn’t make sense, don’t do it,” Murphy said. “Things become known eventually. You don’t really have to force them down people’s throats.”
Murphy says it’s up to independent labels to resist slashing their own prices just to fit someone else’s corporate business model. Drag City albums sell for $9.99 on iTunes and $8.99 on Amazon, though Murphy says Amazon is swallowing the difference.
“There are too many people out there who don’t value their own exposure, who want (their music) to get to the maximum number of people and they don’t care what they have to do,” Murphy said. “This is the reason, as far as I’m concerned, that the industry is in trouble.”
http://seattletimes.nwsource.com/html/musicnightlife/2003983861_webindie.html